WaMu - another union investor activism success?

I missed this earlier in the week, but Washington Mutual has agreed to appoint an independent chair after presuure from shareholders. The shareholder campaign at WaMu was led by the Change To Win Investment Group, the investor activist wing of one of the US labour federations. The announcement follows the earlier ousting of one of WaMu's directors after pressure from CTW.

The release below is available here (PDF).

Washington DC: The CtW Investment Group responded to Washington Mutual’s (NYSE:WM) announcement today that the board of directors has decided to accede to the will of the majority of shareholders and name an independent Chairman. “It’s the right response to a strong shareholder vote,” said CtW Investment Group Research Director Richard Clayton, “and it’s the right approach to governance. Too much power concentrated in Kerry Killinger’s hands has not served Washington Mutual shareholders well, and it’s clear that more boards are now getting the message that stronger checks and balances are necessary.”

CtW Investment Group also noted, however, that Washington Mutual continues to resist shareholders’ demand that only directors who received a majority of votes cast by actual shareholders should continue to serve on the board: “It’s distressing that this board continues to apply a double standard to shareholder votes. The vote to name an independent Chairman excluded uninstructed broker votes, but the disputed re-election of directors James H. Stever and Charles Lillis may have resulted from the inclusion of these phantom votes. The board needs to disclose whether Stever and Lillis received a majority of votes cast by shareholders and to request the resignation of any director who did not.”

The CtW Investment Group works with pension funds sponsored by unions affiliated with Change to Win, a federation of unions representing nearly 6 million members. These funds hold an estimated 4.6 million shares of Washington Mutual common stock. Citing extensive failures in overseeing risk management, earlier this year CtW Investment Group recommended that Washington Mutual shareholders withhold support from former director and prior Finance Committee Chair Mary E. Pugh and current Human Resources Committee Chair James H. Stever.