Today’s report in the Wall Street Journal that Washington Mutual solicited $5 billion from private equity firm TPG demonstrates the severity of the company's risk management failures and underscores the need for new, independent leadership on its board of directors, according to the CtW Investment Group.

"That Washington Mutual finds itself requiring such a large capital investment only goes to show that incumbent directors have failed to properly oversee risk management," said Bill Patterson, Executive Director of the CtW Investment Group. "This possible infusion - which is equal to nearly 20% of shareholders' equity at the end of 2007 - should be a clear signal that shareholders need new, independent leadership on this board to protect their investment going forward."

In a March 27 letter to Washington Mutual shareholders, CtW argued that as chairs of the committees charged with risk management oversight and compensation, respectively, nominees Mary E. Pugh and James H. Stever bear responsibility for Washington Mutual’s failure to recognize and act in a timely manner on the risks to shareholder value presented by the housing bubble, and for attempting to insulate executive bonuses from the consequences of this risk management failure.

Posted by Anna Mumford on April 7, 2008 1:10 PM