Faculty Fireside with Scott Meadow and Walter Massey

– Hello, I’m Scott Meadow There will be two people speaking You will hear my voice, and our guest Everyone else will be muted If you have trouble with audio, shut down programs running in the background, or dial in by phone Our presentation will last 60 minutes Walter and I will speak, and then we will take questions that you submitted The webinar is being recorded for your convenience I would like to thank the following people, Morgan Tomaso, Sharon Porta, Kara Kendall, Craig Schultz, Kathleen Quebbemann, Jane Rodriguez for making this event possible Before we start, I wanna take a moment to mention the passing of Professor Marvin Zonis, a friend, colleague, and neighbor of both Walter and myself Marvin was a distinguished scholar and educator, and trusted member and confidant to thousands of Booth students and faculty, and is an irreplaceable member of our community Back to happier topics, on behalf of Chicago Booth, thank you all for joining us We know you have unusual demands on your time and attention right now, and we appreciate your interest I’m honored and pleased to introduce my friend and neighbor Walter Massey PhD, Senior Advisor to the President, University of Chicago Walter is President Emeritus of the School of the Art Institute of Chicago and at Morehouse College, and as you know, the retired chairman of Bank of America A prominent physicist, Walter has served as director of the Argonne National Laboratory, vice president for research, and professor of physics at the University of Chicago He also served as director of the National Science Foundation from 1991 to 1993 He has been provost and senior vice president for academic affairs of the University of California system, where he was responsible for academic and research planning and policy budget planning, and programmatic oversight of three Department of Energy national laboratories In the corporate sector, Walter has served as a director and chairman of Bank of America and a director of the First National Bank of Chicago, Delta Air Lines, McDonald’s, Amoco, and British Petroleum, and Motorola, among others He’s the (mumbles), he’s the recipient, excuse me, of multiple honorary degrees Additionally, throughout his academic career, Walter has been an advocate for issues surrounding minority students and education Walter’s recently published memoir, “In the Eye of the Storm: My Time as Chairman “of Bank of America During the World’s “Worst Financial Crisis,” is the behind-the-scenes story of the nation’s greatest financial crisis in decades Thank you for joining us this evening to discuss Walter’s memoir I’m sure you’ll enjoy it as much as I, when you purchase the book His time with Bank of America, and his varied and esteemed professional career and breadth of personal accomplishments will make for a very interesting next hour Walter, in the prologue, you write that “Eye of the Storm” is just the first of many books you plan to write Was there anything besides the anniversary of the financial crisis that prompted you to focus your first book on your time as chairman of Bank of America? How did you feel about revisiting that era, when it was a source of so much stress and worry in your life? (both laugh) – Thank you, Scott, and thank you to everyone for tuning in tonight, and all of you who have put this together I had been working on a memoir, oh, for a number of years, almost a decade, and I’d actually “finished,” quote, the memoirs, finished a version

I have a thick, thick stack, a book that thick almost But what I had written was kind of a chronology of my life It wasn’t a memoir in the sense that I mentioned When I showed it to publishers, the reaction was, well, there’s just so much in here First of all, we need a theme that goes through it, and secondly, what you have said is sort of, you know, I did this, I was born, I did this, I did this, that you’re not telling the reader how you felt at the time, or really painting a picture of what it was like That’s, if you’re not a writer, I believe that’s not as easy as it might sound So I did engage someone to help me do that And then it was the 10th anniversary, and we had the idea of why not just start with one facet of my career as sort of a through line, you might say, and that would be a clothesline on which you can hang other stories And so, the Bank of America story became that story, and it was, that it was the 10th anniversary also made it more relevant, because there was so many articles being written about that crisis An interesting thing with the title, almost as soon as we had the title and was advertising it, of course we had the COVID crisis, and we thought, “Oh, my goodness,” this 19, 2009 is not the greatest financial crisis anymore I think the title is still accurate, because it is, says financial crisis, doesn’t say economic crisis And this was, you know, it spread beyond the financial industry, but the locus of it was financial So I’m comfortable with the title I, there were frustrations, but there were also, there was also a great deal of satisfaction from having gone through this, which I tried to capture in the book And so, writing it was not taking me back to the most frustrating times It allowed me to go back and revisit that time through other lenses of things that have happened since then I started reading a memoir by a very accomplished author over the last couple of weeks, and she said, you know, writing a memoir is like rediscovering yourself And in some ways, that’s true, because you’re trying to say how you felt when you were 15, or 10, or even 30, (mumbles) maybe at 40, through the eyes of someone who’s in their 80s And of course, you can never go back and really feel how you felt at that time But it was, it was a joy doing it, and I’m very pleased I’ve been getting very good reactions from people who have read it So I’m glad I did it (Walter laughs) – No, you, yeah, I’m glad you did it, too I’ve enjoyed it But Walter, you’re a physicist without a banking background, yet you spent many years on Bank of America’s Board of Directors prior to being named chairman Aside from gaining your fellow board members’ confidence, how did those years of participation on the board help in this particular time of crisis? – Well, they were very- – (mumbles) you – I was the longest serving member of the Bank of America board at that time I had joined the, what we called the legacy Bank of America company in San Francisco in 1990, what was it, 1994, ’94 So I was the longest serving director, and then Bank of America San Francisco merged with Nation’s Back and we became Bank of America So that was very helpful Also, I was not a complete novice to banking, and I had all those years on Bank of America board, but I’d also served on the old First National Bank of Chicago board here in Chicago And at that time, First Chicago was one of the 10 largest banks in the country That was before we had all the mega-mergers And interestingly enough, as I also point out in the book, when I was on the old First Chicago board, we had an episode with the Office of the Comptroller of the Currency that was very reminiscent in many ways of what our encounter with the Fed when I was on the bank of, chairman of Bank of America So I knew things I was familiar with the regulatory scene I was familiar with issues that banks face, and how bank boards operate You know, it’s a regulated industry, and that’s quite different from, say, a McDonald’s, or a Motorola I learned, I did learn how to work with my colleagues very well

based on experience that I’d had, not just on other corporate boards, but on not-for-profits I was a trustee of the University of Chicago for a number of years, for example, and of Brown, and boards I’ve found in many ways are very similar, whether they are not-for-profit, or for-profit, or foundations, or charitable organizations, in the kind of dynamics one wants to achieve on a good, well-functioning board – That’s very helpful Walter, almost immediately after accepting the chairman position, you were called into a very serious meeting with the Feds After that, a series of crises followed, criticism regarding the purchase of Merrill Lynch, selecting a new board, raising the 34 billion with a B required by the stress test, the CEO’s resignation What was the most difficult challenge through all those different varied events? – Oh, so it’s hard to say which one was the most difficult For those who haven’t read the book, I should mention how I became chairman This was not a well-planned succession on the part of the bank At that time, we had a CEO and chairman in one individual, as all the major corporations, most major corporations in America have And when we purchased Merrill Lynch, it caused such, I guess, a backlash among our shareholders for a number of reasons They thought we paid too much, thought we had not been open with the shareholders about the problems that Merrill had, and other things, which I go into detail in the book, and we have the shareholders meeting, and the shareholders voted to recommend to the company that they separate the positions of chairman and CEO Ken Lewis was chairman and CEO, and on the, just after that shareholders meeting, when we were on our way back to the board meeting, which we were going to have afterwards, Ken Lewis, then the CEO and chairman, pulled me aside and said the board wanted me to become the chairman And I’m not gonna use the word on the air that I said in the book (Walter laughs) It was an expletive, and it was a total shock to me And in fact, I argued that this was not the right decision, that I wasn’t a banker, and so forth And he said the board really thought I could do it, I was respected, et cetera, the things they knew working with me, and I was well-known in Washington from other things, and so forth And I thought, well, okay, I can do it It’s actually an honor, and I’d been on boards where they had non-executive chairman, so I knew what a non-exec chairman did You convene the meetings You presided over board meetings You work with management You’re in charge of the agenda for board meetings You were spokesperson when called upon About two days a week, you could do it, and that was in, I could go from Chicago to Charlotte A day after this happened, I got a call from the Federal Reserve in Washington telling me to go to Charlotte, to meet with the head of the Federal Reserve in Charlotte, in Richmond, which is the headquarters of the Fed branch that oversees us And there, I learned that it wasn’t going to be a part-time job, that the bank, they thought the bank had a number of issues that had to be resolved, and the president of the bank, Richard Lacker, looked across the table at me, and said, “And Dr. Massey, the financial community “and we are going to be watching to see “that you can get this done.” It’s tough, so the day afterwards, and then it became a full-time job As you said, we had to reconstitute the board We had to put in a management succession plan We had to revise all our risk operations and a number of other things, and they said you have, in addition to raising the money for the stress test and raising the money to pay back the TARP funds that the government had loaned them So it was, I can’t say any one thing stood out The thing that I most personally had, that fell upon me, I had four other colleagues working with me on a special committee, and we’d parsed out the responsibility, but I had to speak with our existing board members and tell some of them I would like their resignation And these are people I’d worked with for years, colleagues, but I also asked them, please, don’t resign now Don’t resign en masse, because that really

would I think have been very bad news in the financial community So dealing with them personally, and they all were mostly very cooperative, not all, that was the most difficult, and I think very emotional aspect of all of this for me – Hmm, thank you So throughout the book, Walter, you reference several boards you’ve served on, you know, both public and private And while you detail some of the perks that we all think about, in particular, I’m fond of getting the president’s suite for US Tennis Open games I know that was a particularly tantalizing tidbit for you But why do you feel generally board service is an important part of a professional’s portfolio? – Well, I think there’s a number of reasons One, I think boards are very important, because for corporate America, boards, publicly traded companies, boards are required, and you have a board consisting independent directors, those who are not working employees of the company, or management, to represent the shareholders, so, legal fiduciary, but also boards are there not just as the legal fiduciary, but also to work with management, to advise management on their strategic planning, their long-range objectives, and a number of other things, and someone has to do that So it’s important that people do it I also think boards for universities, you know, trustees of boards, very similar concerns and responsibilities, but you’re actually, you are serving, and even for small not-for-profits, you know, boards are necessary Now, of course, for corporate boards, you do get paid, and sometimes quite generously So that is a income from that service Now, for me, I’ve just learned so much, and I like to learn new things Being on boards, I’ve learned a lot about management and leadership that I carried back to entities where I was a CEO, or a senior officer at the time And I’ve found that some of the issues of sort of that entities have are very much independent of size I would go to a meeting of British Petroleum in London, you know, one of the world’s largest corporations, and come back for my senior staff meetings at Morehouse College, a budget a little over $100 million, and I would tell them what we’re discussing, and we’d have some of the same issues It’s just a lot to do with people A lot of the things have to do with people’s siloing in organizations, communications, leadership styles, also budget planning and management But in addition to that kind of learning, if you’re on a multinational board, everything, a global board, everything that happens in the world can affect the company So you just read, you read everything There’s, something’s up, gonna happen in Kazakhstan It’s gonna affect BP If something’s gonna happen in China, it affects Bank of America So you, I found myself in a situation, where in the morning, you know, I’d read, back when we had newspapers, (Walter laughs) three or four newspapers, “The Financial Times,” “Wall Street Journal,” “The Times,” and so forth, and you’d listen to the news So I was constantly learning I just felt very engaged in the world So that was a growing and learning experience for me I think there’s important things you learn if you’re in the business community, that many of you who are listening, you’re making wonderful connections, of course, at every level And if you’re on a major board of, a board of a major, as I said, global corporation, you make these kind of connections globally, which is rewarding personally, and it can be very rewarding professionally – As a sort of solitary individual, who loved theoretical physics, and loved focusing just in a solitary manner on that discipline as really one of the things, one of the defining aspects of your young life, what kind of skills did you pick up from that that you found surprisingly useful when you were on some of these major business boards that you were part of it?

– Well, I’ve found I, that some of those skills were useful, even before I became very involved in the business community My first experience in management was at Brown University when I became dean of the college there Had maybe about 100 or so people reporting to me, and up to that time, I’d have run research programs, and a program I had at Brown to sort of educate students with science, to be science teachers at an inner-city school So I had, I had to learn how to deal a lot with people, and that was, I shouldn’t say it was difficult, but something that grew, because as you noted from reading my book, others won’t know, one of the reasons I went into theoretical physics, not even experimental physics, because it’s something you could do by yourself And I just really liked the solitary time of getting deeply involved in a problem and working through it late at night, when Shirley and the kids, Shirley, my wife, had gone to bed Shirley was very, very helpful in having me develop into a person who became a more people person, because she’s very outgoing, and as a couple, (laughs) as you would know, would know that So, but at Brown, you know, I became more, I found I’d enjoyed working with people and I found that people really enjoyed working with me, and that people enjoyed working for me And looking back now, I can see that was something I think maybe that the personality trait I developed, but also I began to analyze it, and began to see what is it that I was doing that allowed me to gather good people around me who liked working for me, and to create the team Now, on the physics side, I think I say somewhere in the book, when you’re attacking, attacking a physics problem, a very complex, complicated problem, you can’t see to the end I mean, you may have some idea, but you have to kind of trust that you have to get started, and you know where to start, and you know the rules of the game, and you begin to do it sort of step-by-step with the kind of essentially faith, believing that if you do this step right, that next step right, you just keep doing, and you stay within the parameters that you are going to finally come out at an answer, and that’d be the one you’re looking for with (mumbles) So I’ve found like the Bank of America, when we came out of the meeting with the Fed, and people who will read the book, it was, my team and I, we were very shocked what we were, at what we were told by the Fed, and what they expected us to do And we had no grand plan (laughs) to do all that But as I say, my first thought, “Well, we just have to get organized.” We have to get organized We got to the first Let’s just figure out out what we have to do first Let’s do that, and then, so that’s, I think that was part of my physics training I’m sure people, other people do that same thing because of other reasons But I think I’ve learned that through physics Also physics, like many subjects, it’s not an easy topic It’s not an easy science So I gained a lot of confidence in myself and my ability to learn from having mastered such a difficult subject – Well, you faced a lot of challenges as a very, as a young person I think if my memory recalls, you went off to college on scholarship as a teenager, right? And these activities that you described at Brown, that happened in your early 30s, if I’m not mistaken So you know, remarkable exposure for a young man How did you rise up to those various challenges at that age with not a lot of preparation? – I also, I point out in my introduction to the book that it could’ve been called a life of serendipity, because many things that happened to me were very unplanned Well, becoming chairman of Bank of America was not planned, or at least on my part My going off to Morehouse College, I’d just turned 16, out of the 10th grade, was not planned That was a program the Ford Foundation sponsored nationally to look around the country to identify young people who might be able to go to college early The program had as its thesis that the last two years of college were really not that useful for certain people

University of Chicago under Hutchins had the same theory So I took an exam, and this is, it was a national exam, and I was chosen for this Ford Foundation scholarship to Morehouse And that’s how I went to college So I was 16, and I finished at 20, right? And I was a full professor in my early 30s at Brown So some of these things happened You know, I had to work I don’t mean they just fell out of the sky, but that was a good start Morehouse College really was the basis for practically everything that happened to me afterwards I really got a fantastic liberal education coming from Hattiesburg, Mississippi, a small town, totally segregated in the ’50s It just opened up a new world to me I had a wonderful physics teacher, Sabinas Hobard-Christiansen, so this white, Danish guy from Harvard Like many whites in those days, he wanted to do something, and go back and help others less fortunate So they would go to these small black colleges in the South and teach The, I was really concerned when I got to Morehouse, because all the other people who were Ford Scholars in my cohort, there were about 15 of us, most of them are from big cities, New York, Chicago, Dallas, New Orleans, Atlanta, and stuff, and some had gone to private schools, one went to Andover I mean, it was another world I was so afraid, I called my mother, and said, “I wanna come home.” She said, “Well, you can’t do that “They wouldn’t have given you the scholarship “if you couldn’t make it.” But I was still so afraid But in those days they had placement exams that the entire freshman class had to take to see which courses you should be placed in based on your aptitude and what you knew And they put the results of the exam on the door of the freshman dorm, and listed the, ranked people who scored highest to lowest in numerical rank by name Now, you would never do that today You wouldn’t embarrass people like that So it was sort of like one to 120, and I went over and looked at it, and then I remember the number one, Phillip Thomson, William Churchill, and number five, it said Walter Massey I was dumbfounded, I was shocked I just didn’t believe it And that was the first time in my life that I realized I might be smart And- – Yeah – After that, I really gained the confidence that, well, maybe I should be here, and maybe I should, you know, I’m where I belong, I can do it And with that attitude, you know, I went into the courses, and succeeded – Well, let’s talk a little bit more about that launching pad The book details some of the prejudice you faced while growing up, and your desire to leave the, quote, “crushing racial atmosphere in the South.” How do you think things have changed after all these years in Hattiesburg, Mississippi? – Changed a great deal I went back for a high school reunion, and three years ago, three years ago, but I had gone back and periodically over the years I even was given a key to the city when I was director of Argonne, which was a big deal for me, as you can imagine – Sure – Come back to the place where I had to drink out of colored water fountains, and go in the back doors of most stores, and take a fire escape to the back of, the top of the, to the balcony to go in movie theaters So that was something But then we had a black mayor, Hattiesburg, for number of years since I had left, and things have changed a great, a great deal There’s still major problems But when I see people, you know, younger people say, “Well, nothing has changed,” it’s just, oh, it’s not true at all I mean, things, we have major issues now, but things have changed a great deal in Hattiesburg, and throughout the South, well, throughout the country, I should say, right? – Yes Well, here’s one example, Walter When a policeman killed your grandmother’s dog because she wouldn’t sell it to him, you discovered, quote, “that there were evil white people, “whose power to commit atrocities “was pretty much unlimited,” unquote What are your thoughts on how little that has changed throughout the decades, as evidenced by the Black Lives Matter movement? – Well, that is something that is so interesting, right, that parallel They kill our dog,

and for the readers, it was my grandmother’s dog, but it was the dog, the name was Lady, and I’m told that she, they would, when they left me alone in my crib, that the dog would stay there The dog was sort of my protector, and I don’t remember a lot of the detail, but I do remember seeing her lying there in maggots, shot But this notion that there are certain people who seem to have unlimited power could kill a dog, and now, could just kill a human being, I mean, the parallels are eerie, as a matter of fact, and that’s something that doesn’t seem to have changed, or clearly it hasn’t – Right, right Well, as a professor at the University of Illinois, you became the Black Student Association faculty advisor, and were instantly involved in racial issues, and you also gave up your job at the University of California Now, I wanna make sure everybody understands that, you know, you were over the entire California system, to take over as president of your beloved Morehouse College to help young black men What were some of the programs that you put in place along the way, and why is it important that black leaders like you make personal sacrifices for the racial justice movement? – Well, I think not just black leaders, I think leaders of every ethnic and racial group should take it upon themselves to be a force in trying to provide for racial equity, racial equity and social justice, especially, especially now Of course, if you’re a black leader, or a minority leader, period, then maybe there’s a bigger burden, but I would hope everyone would see the necessity of that And sometimes, people who are not African-American can make a big difference As I said, my mentor, physics mentor was white One of my most important mentors in my life is Hanna Gray, one of our other neighbors, former president of the University of Chicago, who was responsible for bringing me from Brown to, back to Chicago, to be director of Argonne So I think leaders and mentors are needed from all backgrounds Now, for me and Morehouse, I, as you pointed out, that I was provost, which is a second command provost and senior vice president for the system, and I had been recruited by the president, then Jack Peltason, some who had said he was going to retire in a couple of years, and he, you know, no one can promise you you will succeed, but that would be a likely outcome, assuming I was successful, and by all indications, I had a very good chance and probably others have told me, even now recently, that I probably would have been chosen if I had stayed there But when Morehouse wanted me to come back, and that’s detailed in the book about why they wanted a new president in me, we talked it over in the family with my sons and Shirley, and just, and other friends that we knew around the country and the feeling was that I could do, make a bigger difference in the world by going back to Morehouse Morehouse College, for people who don’t know, it’s the alma mater of Martin Luther King, Jr Small college, only about 25, 2,600, all males, still, one of the few all-male, and has graduated some of the major leading figures in the nation, not just in the African American community So I thought, and we all thought, going back there, I could, if I could do something to improve, it was a good school, if I could improve that, then the outcome would, for the good of society, would be better, that other people could probably do the University of California job, but that might be a special place for me And it was the best decision we ever made I mean, we graduated about over 5,000 African-American males, you know, who most have gone on to important leadership or scientific positions in the country – I have, I have never met a Morehouse graduate, friend, business colleague, lawyer, doctor that does not say, “Do you know Walter Massey?” Right, so, (laughs) I know you had a powerful impact

on those young men In the book, you encourage everyone to be courageous when considering a new barrier-breaking path in life Is that advice still applicable during the pandemic, or is now the time to sort of stay put, and if you’re staying put, what can you do to improve your life while you’re staying put? You’ve held many prestigious positions throughout your lifetime, president of Morehouse College, director of the National Science Foundation, director of Argonne National Laboratories, and provost of the University of California state system, as we were just discussing, yet, you also enjoyed your family, played tennis, exercised, and traveled extensively How do you maintain a good work balance, a good marriage, and what is the secret of your success outside of the boardroom? – Well, I talk about it in the book I don’t think I can, luck is one, I think, meeting my wife, Shirley This year, or last month was our 51st anniversary I’ve been very fortunate in that regard And I learned that I cannot really do the kind of work that I’d been doing as soon as I stopped doing that solitary theoretical physics, unless I have other things It, dealing with people, running an organization really requires a kind of focus, and use of energy, I think, that you really need to renew, if, because your attitude and how you behave in an organization, especially if you’re in a leadership position, is really something that other people look to You may not realize it, and I didn’t either until later on when I was in a leadership position of how little things that you do and the way you behave, or you carry yourself, and so forth, is so important So to keep that balance, one, for me, I suffer from high blood pressure and high cholesterol The exercise, and those other things are just so important in that regard But having a balanced life also allows you then to translate, I think, translate that back into your behavior on the job I have to tell you the story I just thought of, which was when it first came to me that what you do, the little things are so important When I first came back to Chicago be director of Argonne, (mumbles) came back because my first job as a scientist was at Argonne And then I went off to Brown, other places I, they had an event, a little dinner, and they had dessert, and I said, “Oh, do you have cheesecake?” And at that time, I can’t eat cheese now, I love cheesecake I said, “Oh, I’d love the cheesecake “I’ll have the cheesecake.” We had the dinner a week or so later, and they served cheesecake Every lunch and dinner, they had cheesecake And finally, I asked Maria, I remember, who was my assistant, I said, “Why do they serve cheesecake all the time?” She said, “Don’t you know?” I said, “What?” She said, “Because you said you liked cheesecake that time!” I said, “I didn’t mean to serve it all the time!” (both laugh) I’ve had other instances, and you may have too, you have to be careful what you do, what you say, ’cause people are watching you That’s a trivial example, but it’s, I think, a very informative one – Okay, so everybody write down, truer words were never spoken, people are watching you I think with that, Walter, let’s switch over, and we have several questions from our colleagues that are listening in, and let me ask you some of these, ’cause they’re very thoughtful questions Jeremy Overfeld asked the following questions “Walter, with your experience “in higher education leadership, “what’s your take on the future of for-profit education “in higher education, both large online university, “and smaller vocational colleges, “and what role will they play in society?” – Not sure, interesting question I think a great deal is gonna depend on the government regulations and government response to (mumbles)

If you ask that, you might know that under the past administration of Obama they were beginning to really put in stricter regulations and guidance and rules for for-profit organizations, and this administration, under Secretary DeVos, began to loosen some of those, and that’s been good You see, the stock has gone up in some of those companies You know, the basic model, and this not everyone, but it is mostly, for for-profits is they recruit, heavily market to (mumbles) to students, can be young or old, their programs The clientele are almost overwhelmingly individuals who rely on government loans, or Pell grants, or government grants And so, that money goes directly to the institution It just passes through the student, so to speak And to the, so the government can put in regulations to affect whether or not that model is going to be profitable Now, the University of Phoenix, for example, is, from everything I can find, seems to have found a sweet spot in this not-for-profit, in this for-profit world It was a huge organization The new president and CEO of the Museum of Science and Industry graduated from the University of Phoenix and went on to get graduate degrees, and I know other people who have So it can be done I think going through the experience we are all going through, as an example, what we’re doing tonight, learning how to use technology for remote teaching could possibly be a boon to these institutions because many of them already heavily use online teaching – Yeah, that’s very thoughtful That’s exactly right We got a question from Walter Roberts, which I think is interesting “Walter, what can business leaders do “to inform the public of the need for equality “and social justice in daily business activities?” What are the sort of appropriate programs that you think make the most sense? There’s a lot floating around there now – Well, I think the first thing they have to do is demonstrate through their own actions and in their organization that they have a concern for equality and social justice, and not just through philanthropic programs, which is very important, investing, and as many organizations are doing investing in minority businesses or in activities outside of their operation But I also mean having programs inside their companies that serve as examples, and also speaking about them And two people I have been very impressed with is Tom Wilson, the CEO of Allstate, and what he speaks about that he’s trying to do inside the company, and Brian Moynihan at Bank of America, also you could read some of Brian’s letters And Brian was chairman of the Business Roundtable, and so was Tom, I think, before him And they have really been writing and speaking about how we, there’s a need to reconsider capitalism at a time when for-profit organizations have to move beyond just the return to shareholder model, and be more cognizant of their responsibility to the community and to their associates I haven’t, I don’t know where this would go, and you know, whether (mumbles), hope this is not a blip, but I recall back when I first went on the Motorola board in the early 1980s, Bob Galvin, who became one of my, a role model to me, his family founded Motorola – Right – And he was, and they were the largest shareholders then, but he would always stress when he was chairman that the company had a responsibility to its stakeholders, not just the shareholder, the community in which they resided, the employees, as well as the shareholder And you will know, Scott, and maybe the others who, I don’t know, maybe you aren’t that old, (laughs) but you’ve studied it, that that was not uncommon in many corporations You know, whether they lived up to it or not, one can argue, but at least that was the philosophy And then we went through, are still in to a large extent, an era where shareholder return top everything, trump everything, you know, and I think, you know, the private equity

and hedge funds who are able to control companies, I won’t go into all of that, but I think it’s changed I’ve been interested to see the letters that Laurence Fink, you know, CEO of BlackRock, has been writing companies in which they invest about how they’re going to be very serious about holding companies to task for how they consider the environment, sustainability, and equity in the operation So things may be changing to the, I think, to the best, to the better – Right, well, yes, me too So we had an interesting question from Vikram Subgramanian “Going by the election results, Walter, “the country seems to be pretty divided right now “What would you advise the incoming president “to do to bridge the divide?” – Well, I think President-elect Biden is really doing exactly the right thing now You know, he’s really, his first speech is all about healing and bringing the country together And so, I think the rhetoric he’s using is exactly the kind of rhetoric He worked with Congress for a number of years, as we know, and was well-known for working across the aisle Of course, many people were in the, quote, “old days,” but he still has friends and colleagues in the Republican Party, including the Republican Party leader So maybe one can have some hope that he’ll be able to at least bridge this gap in some small manner But I think style matters You know, we talked some of the aspects of that earlier, you know, just about being a leader in any organization Leaders matter, I believe, and what they say, and what they do, and their character, and their words, and their rhetoric matter And I’m very pleased that he’s, I think, off to a good start, as I said, at least in terms of things he was saying, he is saying – Yeah, yeah, that’s very thoughtful So we had another one from Warren Walker, and Warren asked, “Walter, do you think “in a capitalist system it’s appropriate “for the federal government to provide assistance “to save companies slash industries that “without that assistance would fail “due to their own actions or perceived actions?” – That’s a (laughs), well, that’s an interesting question- – Particularly, given the person who I’m interviewing – Now, I’ll put it like this I don’t think there’s anything in the definition or theory, economic theory of capitalism that would forbid, not allow the federal government or the government period to intervene, in a time when there’s a major national crisis And this doesn’t mean that that should be a ongoing or continuous form of government-business interaction And you always had that slippery slope, you know, fear, but it’s like when in a time of national security, you don’t go to war all the time You wouldn’t want that But of course, the government has the right, and has to do that The question is is it a matter of such national importance that it overrides, you know, some theory about how capitalism works, and do you have the people who have the right judgment, and that’s why you, hopefully, you do, who have the right judgment, and prudence in making that decision So I don’t think that should be a sort of a staple of a government course, but I think for one who was really inside of this crisis in the last decade that the country would be much worse off, much, if there hadn’t been those interventions by Hank Paulson, Tim Geithner, and others at the top Now, some dispute that, but most of the, even the histories and analysis that I’ve read, I think with the people who were inside, and even with those that weren’t, economists would agree Some disagree with that, but I feel very strongly about it There, you asked, you didn’t ask, you said, what was the most, some of the most difficult things

I had to do at that time You didn’t ask what are the things that I feared the most, and I know others who I’ve spoken with feared most that we’d have a collapse of the financial system, not just Bank of America, but of the national financial system And who knows what that would have led to As I say, some people don’t believe that Some think we should have just let the banks collapse as we did Lehman Brothers By the way, I should say also that people who haven’t been following, you know, all of the funds that the federal government put in to bail out the financial institutions were all paid back with interest and the government made a profit – Right, right Well, federalism was built to take care of crises, first and foremost And so, I’m not at all surprised by your answer Here’s an important one, and an interesting question by Lee Blackwell He wonders, “Walter, how do you see investment “in environmental impact investing occurring, “and should profit be important in that sector?” – Well, I’m not giving investment advice, (Walter laughs) that’s for sure – Oh, no, no, we’re not asking for any investment advice here I try to avoid when people ask me for investment advice either I’m just thinking about, you know, the notion that the environment is taking on greater and greater importance, and how can, how can we go about, I think, the process of supporting initiatives in the environment and investing in that sector? – Oh, I see First, I really, you can, I think, would recommend that people interested in that read some of Larry Fink’s letters to companies he invested in And you can go online and just look up the letters on sustainability And he, of course, made BlackRock They’re, it’s not a not-for-profit operation So he points out the sort of financial incentives for companies to be concerned with environmental issues and environmental impact So, and I think people at the top of the financial industry see that, and we can see, I think, in other areas, Ford Motor Company announced today, maybe they’ve done it before, that they will phase all of their vehicles from cars to trucks and everything will be electric by 2035 I mean, they are just saying that this is the end of the fossil, the gas driven automobile, motor vehicle So they obviously see a profit in that regard And, you know, clearly there are companies that see very well that being able to be concerned about environment and make a profit is something that’s doable, maybe not in the short-term, but certainly for those entities and industries, companies that are looking for the long-term, that seems to be settling in as their thought now that 10 years ago, I think you really had much more arguments about – Right, yeah, self-interest rightly understood, I think de Tocqueville said about that, and that that’s very interesting that Ford’s taking on that initiative Jeanette Wong, Walter, asks the following question “How did the board help you “and management in thinking through the crisis?” In other words, was there a kitchen cabinet that you convened that was particularly helpful, and were your go-to people? “Were there missing skill gaps amongst “those board members that you had to “relieve of their responsibilities, “and how did you choose new ones?” – My kitchen cabinet was something we called the special committee, and that’s with myself, which I chaired, and the four other directors who went to Richmond with me at that first meeting with the Fed And there’s too much to go into now, but I detail, you know, speak about in detail how that came about So yes, that was this kitchen cabinet

The, we were told by the Fed that we needed more banking and financial expertise on the board And we had a very solid board, a good board, but we had people like myself who was not a banker We had an admiral, a four-star general, head of public broadcasting, you know, good people who had business and other leadership experience, but not really in-depth banking experience So part of what we did was to bring more people on the board with, would had had real banking They’d either been in the banking sector, run banks, or been, like we brought on Don Powell, who was the former head of the OCC, knew the regulatory environment So that was some of the reasons, the ways, the motivation for restructuring the board – I see, I see My goodness, we are sort of at the end of our program here I just wanna hold this up right here I want you to know that I couldn’t sleep a couple nights and this didn’t help, because I started reading this at one o’clock in the morning and finished at 7:00 a.m So I would encourage everybody to go out and buy Walter’s book, “In the Eye of the Storm: “My Time as Chairman of Bank of America “During the Country’s Worst Financial Crisis.” Please join me in thanking Walter Massey, who’s a wonderful guy for sharing his remarkable story with us, and warm wishes to all of you for a very happy holiday season Thank you so much – Thanks for having me, Scott – Thank you, Walter I’ll see you soon, I hope – I do, too – Thank you, my friend – In-person – Give my best to Shirley – I will, thank you – Thank you