The consent order requires several changes to board

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The Consent Order requires several changes to board governance, including: separating the roles of chairman and CEO and amending the company’s by-laws to require an independent chair; electing six new independent directors in 2017 as five directors retired, and planned refreshment of an additional four directors in 2018; enhancing the overall capabilities and experience represented on the board, including financial services, risk management, cyber, technology, regulatory, human capital management, finance, accounting, and consumer and social responsibility; reviewing the board’s committee structure and leadership, amending committee charters to enhance risk oversight, and refreshing the chairs of certain key committees, including the Risk Committee and Governance and Nominating Committee; and conducting a board self-evaluation in 2017. Risk management measures include: centralizing critical control functions (including Human Resources, Finance, and Technology) to improve enterprise visibility, consistency and control; centralizing all risk management functions to accelerate the design and implementation of an integrated operating model for risk management; developing and executing comprehensive plans that addressed compliance and operational risk management programs, organizations, processes, technology and controls; hiring external talent for critical risk management leadership roles, such as a chief operational risk officer, chief compliance officer and head of regulatory relations; and forming new centralized enterprise functions dedicated to key risk control areas. Wells has been trying to put the issue behind it now for about 18 months. At its 2017 Investor Day on May 11, management provided an update on its efforts to restore customer trust in the wake of fraudulent sales practices. These efforts include better communications with customers, regulators and industry groups; stronger internal controls; and a new employee compensation structure. At the same time, management noted that the company was seeing a reduction in branch interactions and new account openings as well as diminished customer loyalty. The company has terminated more than 5,000 employees connected with the fraudulent practices. In addition, it has made amends to customers that experienced late charges or other penalties connected with the fake accounts, and paid $185 million in settlement charges to the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency, and the county and city of Los Angeles. It has also eliminated product sales goals within the retail franchise, and hired an outside firm to analyze deposit and credit card accounts opened between 2011 and 2015. In response to reduced branch activity and customer losses, the company is targeting $2 billion in expense savings by the end of 2018, mainly in marketing, finance, human resources and operations/technology, as well as reductions in consulting and third-party expenses. At the 2017 Investor Day, management also announced an additional $2 billion in savings that it expects to achieve by the end of 2019, driven by operational consolidation, improved processes, and the outsourcing of certain functions.
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