B of A Founder’s Daughter Resigns : Quits Honorary Board Post, Raps Management
The daughter of Bank of America founder A. P. Giannini resigned her honorary seat on the bank’s board of directors Thursday with a blistering attack on current management.
Claire Giannini Hoffman, 80, said the immediate reason for her resignation was the “appalling, truly unpardonable” decision to sell the bank’s San Francisco headquarters to bolster its cash position.
But in a lengthy statement, she called the move “the latest item in a sad chronology of corporate myopia and thoughtlessness” and said it was evidence of a 15-year pattern of “corporate self-interest, insincerity and insensitivity.”
Hoffman’s angry resignation adds to the bank’s image problems, which stem from weak earnings and that have been compounded in recent months by huge losses in an alleged mortgage-securities fraud. The bank last week fired five employees and demoted a sixth, accusing them of “gross negligence” in the mortgage paper deal, which cost the bank $95 million and severely reduced its 1984 earnings.
Hoffman was named to the board in 1949, assuming the seat left vacant by the death of her father, the son of Italian immigrants who opened the bank in 1904 as the tiny Bank of Italy. She was appointed honorary director of Bank of America in 1975 and of the parent firm, BankAmerica Corp., in 1981.
BankAmerica is the nation’s second-largest bank holding company with assets of $120 billion.
Samuel H. Armacost, bank president and chief executive, said in a prepared statement: “We’re very sorry that Mrs. Hoffman has felt it necessary to take this step. We value her counsel and her companionship, but we have an honest difference of opinion about how the assets of the corporation can best be employed.”
He said no buyer has yet been found for the 52-story granite headquarters building in the heart of San Francisco’s financial district. The sale-leaseback of the 16-year-old building could bring Bank of America as much as $500 million, funds badly needed to meet new rules on minimum bank capital imposed late last year by the U.S. Comptroller of the Currency.
“In the opinion of the senior management of the bank, the assets represented by the building might be better used in helping to grow and expand the products and services the bank offers its customers rather than remaining tied up in real estate,” said Armacost.
Bank officers had no further comment on the matter.
In her 16-paragraph statement, transmitted nationwide, Hoffman said:
“For the past 15 years or so, I have watched three successive administrations stray further and further from the policies and practices that were such a vital part of my father’s leadership: Clear thinking, a willingness to place the human needs of ordinary people above private ambition and a realization that the bank was less a place of work for its thousands of employees than an extended family of fellow workers, each intimately involved with the other in the creation of a corporate trustee of great public purpose.
“During these years, too, I have watched the growth of the absurd fiction that the ‘new realities’ of our time are incompatible with the old-fashioned moral convictions of the past; that advanced technology has eliminated the personal relationship between the bank and its customers; that people as demographic abstractions rather than as individuals with private needs and expectations should be at the center of corporate policy.
“The result is that, behind the facade of responsible financial leadership, never in the long and remarkable history of the bank has the concept of the public welfare meant less. Never has corporate self-interest, insincerity and insensitivity been more conspicuous.
“Apparently, the guiding principle of the bank’s present leadership is that banking is no longer a people’s business, but a private area for the power plays of the few who are more and more reluctant to be held accountable for their actions. This is a depressing thought. But the facts must be faced.”
In a telephone interview, Hoffman said she was “shocked” last November to learn of plans to sell the building, named the A. P. Giannini Plaza, from newspaper accounts rather than from bank officials.
She said references in the statement to “private ambition” and “power plays” were not meant as attacks on individuals but on a corporate culture putting money before people.
“Most of my complaint is sentimental, especially about the building. We’re getting very mechanical and computer-minded. Today, the dollar is all-important. This bank used to be renowned for its human touch. Perhaps today it’s not possible to be human in business.
“I guess these changes had to come, but I feel for the employees very much. I’ve always been close to them,” she said.
She added that her decision to resign was irrevocable, even if plans to sell the building were scrapped.
“I don’t think they’d want me back. And I know they’re not going to change their minds.”
Hoffman’s prepared statement and later comments reflected a deep personal hurt over developments at the bank. Branch closings, work-force reductions and increasing automation have combined to make the bank more impersonal and violate her father’s vision of the bank as an extended family providing lifetime employment to loyal workers. California employment at Bank of America has been reduced by nearly 10,000 persons as about 150 branches have been closed in the past 18 months.
For the founder’s daughter, the decision to sell A. P. Giannini Plaza was the last straw.