Tuesday, May 15, 2012


By Richard E. Nicolazzo

There are lots of major league communications challenges on the business landscape today, but it’s hard not to make the case that Bank of America CEO Brian Moynihan has the toughest communications job of them all.

Moynihan, now in his third year at the behemoth bank that everybody seems to love to hate, got another rude reception on May 9 in Charlotte when BoA held its annual shareholders’ meeting.

An estimated 500 investors, activists, and “Occupy Wall Street” protesters marched on the bank’s headquarters from three directions. While there was no serious violence, six were arrested in what could be described as a noticeably angry mob.

Inside, Moynihan was peppered with questions from shareholders who hold the bank responsible for everything from environmental pollution to the mortgage meltdown. One shareholder said, “Listen to what’s around you. This is America. Bank of America, take care of America.”

The CEO’s tepid response: “I listen carefully.”

According to news reports, instead of trying to show a more warm, “human touch”, Moynihan gave terse responses to most shareholder comments, which in some cases fueled more criticism. 

Here’s a sampling:

On foreclosures: “We continue to do everything we can.”  On modifying underwater mortgages: “We have looked at this a lot. If we’re not getting it right, we’re happy to take your feedback.” On trying to break away from Countrywide: “To divest something, you have to have a buyer.” On whether he cares about customers and communities: “I love my neighbor as myself.”

After saying he would stay all day to answer questions if necessary, the meeting apparently got a bit too heated and was adjourned before everyone had a chance to speak. As attendees filed out, a report in the Charlotte Observer said a group began chanting, “Bank of America, bad for America.”

Like it or not, in today’s business environment a chief executive officer like Moynihan also serves as the chief spokesperson on major matters affecting the bank, investors, customers and various constituent communities.   Bank of America’s image and reputation have been severely tarnished in recent years, with repeated attacks on its anti-consumer policies and practices.  Despite increasingly negative media coverage, highly-publicized public protests, movements to boycott the bank, and numerous lawsuits, Bank of America has done little to solve its longstanding and questionable procedures in its mortgage lending business.

Help for Homeowners

At times, Moynihan must be wondering if he’s living in a parallel universe.

Despite the outcry, shareholders elected all 12 of the company’s board of directors and 92% voted in favor of Moynihan’s $7 million pay package. Just two days before the meeting, BoA announced it started sending letters to some 200,000 homeowners in the U.S., offering to forgive a portion of the principal balance on their mortgages by an average of $150,000.

And less than a month earlier, first quarter financial results showed net income (profit) of $653 million, a strengthened balance sheet, an increase in commercial loans, 3% sequential growth from the last quarter, and near-record profits from the Merrill Lynch unit.

So what gives? Why is BoA one of the most disliked banks in America?  Why is Brian Moynihan viewed with such doubt and skepticism?  What can be done to change things?

Three theories: First, with 57 million consumer and small business accounts, 17,250 ATMs and 30 million active users, the bank is just too big, particularly in an unsteady economy. It follows that the bigger the bank, the more chance for disgruntled customers.  Complex internal policies and processes are necessary to manage an enterprise this large, which in some cases can have an adverse impact on communications strategies designed to address these issues.

Just last week, Sen. Sherrod Brown (D-Ohio) introduced the Safe, Accountable, Fair and Efficient Banking Act. His proposition is simple: Too-big-to-fail banks should be made smaller, and it has to be done without causing global panic. This idea has gained support since 2008 when the so-called Brown-Kaufman amendment got the backing of 33 senators but failed on the floor.

Second: The January 2008 acquisition of Countrywide Financial, which made BoA the nation’s biggest mortgage lender and loan servicer. At the time, Countrywide had $408 billion in mortgage originations and a servicing portfolio of about $1.5 trillion with 9 million loans.

The mortgage documentation mess at Countrywide, made worse by BoA’s questionable foreclosure practices, has created a hangover of discontent that has permeated the nation. With millions of mortgage customers impacted, it’s become impossible for BoA to fix every situation. It’s no secret that the bank’s mortgage servicing process is broken, with long delays and other obstacles facing homeowners.

Having joined four other large mortgage servicers in February to reach terms of a global settlement resolving federal and state investigations into certain origination and foreclosure practices, BoA could see some improvement in the months to come. It’s committed $18 billion in borrower assistance. This will, however, not be a quick fix on the PR front.

Even BoA’s Global Strategy and Marketing Officer, Anne M. Finucane, who is at the helm of hundreds of millions of dollars in advertisement and PR budgets, acknowledges the mortgage quagmire. In a lengthy New York Times piece in January 2012, Ms. Finucane said, “It’s vital to resolve the foreclosure crisis, an issue that angers millions of Americans.”

Third: For all his bona fides in the banking industry, Moynihan just may be unable to connect with people. A CEO’s connection to a company’s audiences, large and small, is fragile and often elusive. Clearly chief executives like the late Steve Jobs had it. So do Google’s Eric Schmidt, Southwest Airlines’ Gary Kelly and JPMorgan Chase’s James Dimon.

Although some circumstances may be beyond their control, CEOs also typically get blamed for poor stock performance. Since Moynihan took over at BoA, the stock has taken a beating, falling 58% in 2011 before bouncing back a bit this year. Analysts have been dissecting the stock issue for years, but a common theme seems to be there are questions about long-term survival and the bank’s ability to finally extricate itself from the mortgage morass.

A shareholder activist at the recent annual meeting may have put it best when he stood up and said the bank wouldn’t be there without the taxpayers who bailed it out after the 2008 financial crisis. “I want you to think about what it’s been like to hold this stock for 15 years,” said John Moore, the activist.

These factors and Americans’ deepening mistrust of financial institutions have created a toxic mix. In many ways, Finucane’s tag line “Bank of Opportunity” has fallen on deaf ears, despite slick TV ads permeating the airwaves.

On May 4, BoA announced it had picked WPP of Dublin, which operates in 107 countries, as its main advertising agency, handling overall branding, as well as advertising for its consumer banking, global banking and markets, and global commercial banking divisions.

The challenge is enormous. It will be interesting to see what new slogan appears in the weeks and months ahead. Despite some fresh blood in the creative process, I’m not convinced BoA’s PR will improve anytime soon unless all the operational problems are addressed and solved. At the end of the day “image and reality must be consistent.”

Until these policies and processes are fully addressed, BoA will likely continue to be viewed as “too big to fail…and too big to succeed.”

# # #

Richard E. Nicolazzo is Managing Partner of Nicolazzo & Associates, a strategic communications and crisis management firm headquartered in Boston, Mass.

Joe M. Grillo, Partner, and Linda Harvey, Client Services Director at Nicolazzo & Associates, contributed to this blog.



Anonymous said...

Howdy! This is my first visit to your blog! We are a collection of volunteers and starting
a new project in a community in the same niche. Your blog provided us valuable information to work on.
You have done a outstanding job!

Feel free to surf to my blog :: 7th grade math projects
my webpage > 7th grade math textbook

Anonymous said...

Hi there would you mind letting me know which web host you're working with? I've loaded your blog in 3 completely different web browsers and I must say
this blog loads a lot quicker then most. Can you suggest a
good internet hosting provider at a reasonable price?
Thanks, I appreciate it!

Here is my web blog: vera wang silver shoes

Anonymous said...

Hi there! Quick question that's completely off topic. Do you know how to make your site mobile friendly? My website looks weird when viewing from my iphone 4. I'm trying to
find a template or plugin that might be able to correct this issue.
If you have any suggestions, please share. Thanks!

Check out my webpage: cargo pants

Anonymous said...

The other day, while I was at work, my sister stole my apple
ipad and tested to see if it can survive a 40 foot drop, just so she can be
a youtube sensation. My apple ipad is now broken
and she has 83 views. I know this is entirely off topic but I had to share it with someone!

Also visit my web blog; Garnier Dark Spot Corrector

Anonymous said...

It's a shame you don't have a donate button! I'd most certainly donate to this brilliant blog! I suppose for now i'll settle for bookmarking and adding your RSS feed to my
Google account. I look forward to fresh updates and will talk about
this blog with my Facebook group. Chat soon!

Here is my site :: Methadone Clinics Near

Ethan Smith said...

Buy & sell new and used iPhones.
Wide selection of new and used iPhones for sale.
More at iphone 3g price used

oakleyses said...

nike free run, ugg boots, longchamp outlet, ray ban sunglasses, prada handbags, prada outlet, nike air max, polo ralph lauren, christian louboutin outlet, cheap oakley sunglasses, nike free, louis vuitton outlet, oakley sunglasses, louis vuitton outlet, nike air max, polo ralph lauren outlet online, gucci handbags, polo outlet, longchamp outlet, replica watches, ugg boots, louboutin pas cher, uggs on sale, burberry pas cher, louis vuitton, oakley sunglasses wholesale, longchamp outlet, sac longchamp pas cher, replica watches, chanel handbags, christian louboutin uk, nike roshe, air max, kate spade outlet, longchamp pas cher, nike outlet, christian louboutin shoes, oakley sunglasses, jordan shoes, louis vuitton, christian louboutin, tiffany and co, michael kors pas cher, louis vuitton outlet, oakley sunglasses, tiffany jewelry, tory burch outlet, ray ban sunglasses

oakleyses said...

polo lacoste, michael kors outlet online, nike air max uk, replica handbags, nike roshe run uk, uggs outlet, coach outlet, michael kors outlet online, sac vanessa bruno, oakley pas cher, ray ban pas cher, nike air max uk, lululemon canada, new balance, nike free uk, north face, nike air force, hogan outlet, kate spade, burberry outlet, mulberry uk, coach purses, true religion jeans, michael kors outlet online, abercrombie and fitch uk, michael kors outlet, hollister uk, converse pas cher, nike blazer pas cher, timberland pas cher, nike tn, true religion outlet, ralph lauren uk, michael kors, guess pas cher, sac hermes, michael kors outlet, ray ban uk, uggs outlet, michael kors outlet online, true religion outlet, coach outlet store online, michael kors, vans pas cher, true religion outlet, hollister pas cher, nike air max, michael kors outlet, north face uk

oakleyses said...

converse outlet, chi flat iron, ray ban, insanity workout, ferragamo shoes, mac cosmetics, herve leger, soccer jerseys, converse, louboutin, north face outlet, asics running shoes, jimmy choo outlet, gucci, ralph lauren, mont blanc pens, soccer shoes, celine handbags, nike trainers uk, beats by dre, vans, bottega veneta, babyliss, nike roshe run, hollister, ghd hair, wedding dresses, giuseppe zanotti outlet, abercrombie and fitch, hermes belt, nike air max, hollister clothing, iphone cases, north face outlet, vans outlet, nfl jerseys, hollister, mcm handbags, valentino shoes, p90x workout, new balance shoes, nike huaraches, timberland boots, instyler, lululemon, nike air max, longchamp uk, baseball bats, reebok outlet, oakley

oakleyses said...

canada goose outlet, canada goose jackets, pandora charms, moncler uk, moncler, barbour uk, moncler outlet, pandora uk, moncler, louis vuitton, juicy couture outlet, canada goose, canada goose, juicy couture outlet, pandora jewelry, canada goose outlet, louis vuitton, links of london, supra shoes, canada goose uk, moncler, ugg, toms shoes, ugg,ugg australia,ugg italia, canada goose, canada goose outlet, coach outlet, swarovski crystal, wedding dresses, pandora jewelry, barbour, louis vuitton, moncler, lancel, doudoune moncler, ugg pas cher, ugg,uggs,uggs canada, karen millen uk, marc jacobs, louis vuitton, ugg uk, louis vuitton, moncler outlet, replica watches, swarovski, hollister, thomas sabo, montre pas cher

dalia alaa said...


omar ali said...

Good write-up