Bank of America and WP Brand Studio - Washington Post's in-house creative agency - are partnering on a series focused on responsible growth, what it means to be a responsible company today and how that leads to both long-term corporate success and sustainable economic growth. The content will feature commentary from Brain Moynihan and other senior leaders and will address how and why responsible growth is emerging as a core business strategy for a broad array of companies.
By: Brian Moynihan
Recently, I had the opportunity to be one of the co-chairs of the World Economic Forum Annual Meeting. One of the reasons I was pleased to do so is because of the theme of this year’s meetings: Responsive and Responsible Leadership. As the CEO of a U.S. public company that operates across the country and around the world, I view responsive leadership as being curious, listening to people, and understanding their differing perspectives and backgrounds as we make decisions in the best interests of our employees, our customers and clients, shareholders, and the communities we serve across the U.S. and overseas.
The theme also struck me because it is similar to the way we run our company. As we emerged from the clean-up of the financial crisis, we simplified and strengthened our company, and we focused on serving our customers and clients to help them live their financial lives. We needed a way to talk about what we do. We call it “responsible growth.”
Responsible growth has several tenets: First, we have to grow. But our focus on “responsible growth” means we have we have to grow by doing more for our customers and clients. Not every dollar is a good dollar, if it comes from an activity that doesn’t tie back to a customer need.
And we are growing in that way. Lending to businesses of all sizes is up 12 percent year over year. To pick just one of the nearly 90 domestic markets we serve, in Grand Rapids, Michigan, we provided 18 percent more small business loans versus last year, and we are expanding our branch system and adding small business lenders. Alongside direct lending to consumers and businesses, we also are the nation’s largest investor in Community Development Financial Institutions, with more than $1 billion invested with 240 community partners around the nation. Lending by CDFIs creates access to capital for women and minority-owned small businesses by creating a bridge between ourselves and individuals or small businesses that might otherwise have a hard time getting access to capital.
We also have to grow within a clear risk framework so that we can maintain a balanced, stable, and financially strong platform. That’s happening, too. In the last quarter of 2016, we saw the lowest level of bad loan charge offs perhaps ever in our company’s history.
Finally, our growth has to be sustainable. Long-term, sustainable growth has many components. It’s how we invest in our team; as of this month, we’ve increased our minimum wage so that all Bank of America employees make more than $15 an hour. We will keep adjusting that, as we have regularly for several years now. In 2016, we increased our parental leave to 16 weeks of paid leave for all new parents. We’ve also kept our healthcare premiums flat for the last five years for those employees who make less than $50,000 a year.
Sustainability also comes from maintaining and building upon best practices in corporate governance, including a strong, independent board and other measures. We also view the more than 2 million volunteer hours our teammates commit to their communities and our $125 billion new energy initiative as critical to creating the conditions for long-term, sustainable growth.
Because of the way Bank of America looks at responsible growth, it appealed to me that the ideas behind it are similar to what the business, government, and non-profit leaders were talking about at the World Economic Forum.
Countries, too, have to grow; economies have to grow. Economic growth is the engine of prosperity. The financial services industry at home and abroad has a responsibility to help drive real economic growth. But it has to be the right way. Leaders have to focus growth on all participants in the economy. Inequalities arise; there is fallout from the ups and downs of market-based forces. Leaders from every sector have to come together to focus on all the participants in the economy to address those left behind by those forces.
Economic growth also has to avoid excessive risks, such as we saw during the economic and financial crisis from a decade ago. And, finally, economic growth should be sustainable. We have to invest in the future, in changes in technology and also in the social safety nets to ensure no one is left behind.
My teammates and I at Bank of America have a responsibility to help the economy grow, and we have a role to play in partnering with leaders from other sectors in government at every level, non-profit agencies, and elsewhere, to help ensure growth comes in lasting and sustainable ways. We will continue investing in our business, our people, and our communities because we understand that when our communities and employees succeed, we succeed.
Brian Moynihan is CEO of Bank of America.
Read more from the responsible growth series by visiting the Washington Post Brand Studio.