Morgan Stanley’s board in yesterday’s meeting removed a bylaw that called for a 75 percent vote to oust chief executive, and revealed plans to name a lead outside director to improve governance at the firm. The board, while making it easier to remove Philip Purcell whose leadership raises questions in the company, also voiced strong support for his leadership.

"We have said consistently that management enjoys the confidence of the board and we reiterate that commitment today," the statement of the board says.

"We have thoroughly examined all of the issues surrounding leadership, structure and strategy and conclude that it is in the best interest of shareholders that we support management and not split up the company," the statement added.

The board also said that no other spin-offs are intended except the Discover Card business. The eight dissident former Morgan Stanley executives who are waging a war against Purcell, have suggested on April 22 the creation of two separate companies ,where one would service institutional clients, including pensions and mutual funds, and the other would concentrate on individual investors.