Former Financial Services Authority chairman, Sir Howard Davies, is to meet
with a corporate governance group to explain his role on the audit committee of
Morgan Stanley during the turmoil of the credit crunch.
Sir Howard, also former deputy governor of the Bank of England, is one of
three Morgan Stanley directors who have agreed to meet with pressure groups
demanding an explanation for the massive writedowns.
The bank has written down $10.6bn thus far, and is among those in the
spotlight of corporate governance groups that are stepping up pressure for
directors to account for the massive losses of the last four months,
The two other directors are Charles Noski – former CFO of US defence
technology company Northrop Grumman and US telecoms group AT&T – and former
Securities and Exchange Commission Chief Accountant, Donald Nicolaisen.
The three are also standing for re-election.
CtW Investment Group, which represents nearly six million workers and owns
pension assets in excess of $1.4trillion, has sent letters to the boards of six
banks, demanding answers.
The group said shareholders are entitled to a detailed explanation of what
audit committee members did, individually and collectively to understand Morgan
Stanley’s exposure to risk. This risk included its investments in exotic debit
instruments. Directors should explain, CtW said, what appropriate steps
management took to control the exposure.
‘We have agreed to meet with CtW and take its concerns seriously,’ a Morgan
Stanley spokesman representing the directors said.
The bank is set to kick off AGM season with its meeting on April 8.
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