The removal of four Wells Fargo directors, in connection with
other sanctions imposed on the bank by the Federal Reserve, has far
reaching implications for the corporate governance of large,
sophisticated health care systems and other health industry
companies.
Announced on February 2, the Fed's enforcement action has been widely
interpreted as a powerful regulatory message of governance
accountability for failures of board oversight. The sanctions
prevent the bank from increasing its total assets, thus severely
limiting its ability to grow. They also mandate several corporate
governance and risk management actions, including the required
replacement of board members. The Fed publicly censured the
bank's board, its former CEO and a past lead independent
director. It also identified areas in which the bank failed to
comply with its own published corporate governance guidelines.
Prior board members were criticized for their lack of inquiry and
lack of demand for
