When U.S. agencies in October laid out TD’s anti-money laundering failures and announced a $3.09 billion settlement with the bank, it marked the “darkest day” for the Canadian lender, TD board Chair Alan MacGibbon said Thursday.
“The settlements were extraordinarily painful,” MacGibbon said, according to The Globe and Mail. “The Oct. 10 public consent agreements was the darkest day that we could have imagined it to be, and I apologize to all investors for how difficult this was and the consequences of the actions.”
MacGibbon’s comments came in response to a shareholder’s question at TD’s annual general meeting Thursday – the first opportunity for investors, on a grand scale, to talk to the bank’s brass in the six months since the settlement, which included a $434 billion cap on the lender’s U.S. retail assets.
Ray Chun, in his first annual general meeting as TD’s CEO, said the bank is redesigning its training programs at all levels, including for front-line employees who interact directly with customers.
Senior leaders are learning more about encouraging accountability and effectively flagging issues to senior staff, MacGibbon said.
“It is about changing our culture,” Chun said. “A culture of accountability and a culture of curiosity within our front lines and our second lines to ask why and be more curious to all these issues.”
The meeting heralded several changes to the board, too. Five directors – Amy Brinkley, Colleen Goggins, Karen Maidment, Claude Mongeau and Brian Ferguson – chose not to stand for reelection Thursday. Three of them – Brinkley, Maidment and Goggins – sat on the bank’s risk committee. Ferguson sat on TD’s audit board.
Meanwhile, shareholders voted four new directors in, including two with banking experience. Paul Wirth, who served as Morgan Stanley’s deputy CFO for 10 years, is joining. So is Ana Arsov, a longtime Moody’s executive who earlier worked at UBS, Morgan Stanley and Lehman Brothers.
A third former banker – Frank Pearn, who once served as JPMorgan Chase’s chief compliance officer – is set to join in August.
Elio Luongo, the former CEO of KPMG Canada, and Nathalie Palladitcheff, former CEO of the investment group Ivanhoé Cambridge, also joined.
Of TD’s remaining board members, MacGibbon received the narrowest reelection, as 57.7% of shareholders voted in his favor. MacGibbon announced in January he would step down by the end of the year.
Investors voted against every shareholder proposal raised at the annual meeting, such as those urging the bank to adopt an artificial-intelligence code of conduct and disclose its energy supply ratio.
Given the changes to the board, the shareholder group Investors for Paris Compliance withdrew a proposal seeking outside review of board governance and the bank’s criteria for choosing directors.
An individual shareholder submitted proposals calling on TD to dismiss former CEO Bharat Masrani as a special adviser. Masrani is set to leave that role July 31, anyway.
Masrani’s successor, Chun, said Thursday that TD is conducting a strategic review to identify new opportunities to expand its business. With limits placed on U.S. growth, the bank is expected to turn to its home country. A plan focusing on the Canadian unit, from which TD derives more than 75% of its profit, is set to be unveiled later this year.
Additionally, TD has launched an online service to ease the mortgage application process and has hired specialists to help customers with home buying and retirement investments.
“Those businesses have tremendous momentum,” Chun said. “The entire strategic review − a large portion of that is what we’re going to do to accelerate that momentum.”
As for the bank’s anti-money laundering failures, Chun deemed them “unacceptable.”
“We are making consistent progress every day, with more work ahead,” the CEO said, according to Bloomberg.
