By Rebecca Ungarino

A small activist shareholder group with a stake in Wells Fargo is calling on the bank to restore a policy that required an independent board chair, reviving a long-running corporate governance debate about the practice of a company's chief executive officer also serving as chair of the board.

The Accountability Board, a non-profit group founded in 2022 by three executives who previously worked in animal-rights advocacy, said in a proposal filed with the bank on Tuesday that Wells' decision to remove the requirement from its bylaws this year was short-sighted.

"Having an independent chair fosters greater accountability and allows the chair to focus on the critical issues of governance and risk oversight while the CEO focuses on the day-to-day business," said the proposal, a copy of which was viewed by Barron's.

Wells didn't immediately respond to a comment request on Tuesday.

In July, the bank announced it intended to name Chief Executive Officer Charlie Scharf as chairman and award him $30 million in a payment structured to retain him for six more years. At the same time, the board updated its corporate governance guidelines to require a lead independent director when the board's chair isn't independent.

Those changes came one month after regulators lifted the unprecedented growth limitation the bank had operated under since 2018, a punishment that stemmed from its fake-accounts scandal. The scandal's fallout and pressure from investors prompted Wells to amend its bylaws in late 2016 and separate the roles.

The Accountability Board says that requirement should stay in place. In the S&P 500, 60% of boards divide the CEO and chair roles, up from 47% in 2014, according to executive search firm Spencer Stuart.

"Independent board chairs are kind of like seatbelts," said Matt Prescott, president and chief operating officer of the Accountability Board. "It's easy to think you might not need one, but you're sure glad it's there when the road gets bumpy."

The activist group also holds positions in Bank of America, Synchrony Financial, Raymond James, Bank of Nova Scotia, and Ally Financial.

Prescott said the Wells proposal is its first at a financial services firm, and it intends to file proposals at the other companies in its portfolio for the 2026 or 2027 proxy seasons. This month his team has filed proposals tied to corporate governance at Target and UnitedHealth Group.

Prescott declined to specify the size of the Accountability Board's position in Wells to Barron's but said the group has owned a minimum of $25,000 worth of the company's stock for at least one year. That position is part of requirements set by the Securities and Exchange Commission to regulate who is eligible to file shareholder proposals.

The activist group was founded three years ago by Prescott, Josh Balk, and Matt Penzer after receiving funding including a grant of $10 million from Open Philanthropy. Balk, the CEO, is a former executive at Humane World for Animals -- the non-profit formerly known as the Humane Society -- and the cofounder of plant-based food maker Eat Just.

Prescott, who previously worked in shareholder advocacy at the Human World for Animals, said the Accountability Board met with leaders from Wells last month to discuss their concerns over corporate governance.

"While we don't share details of our private discussions, I can say that we did not end up aligned on the question of an independent chair," he said.

Scharf has overseen a period of regulatory remediation at Wells, the fourth-largest U.S. bank by assets, since he joined as CEO in late 2019. Wells awarded Scharf the $30 million retention award in part because he has led the bank to resolve 13 consent orders during his tenure, and the board praised the executive leadership team he has formed.

Write to Rebecca Ungarino at rebecca.ungarino@barrons.com

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October 07, 2025 09:24 ET (13:24 GMT)

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