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Banking

Goldman stands by its governance

In September, as part of their succession plan for Morgan Stanley, the board of directors announced a decision to split the roles of chairman and chief executive. From January, John Mack who now combines both positions, will continue only as chairman while James Gorman will step up to be chief executive.

Bank of America Merrill Lynch had split the roles before that, appointing long-serving board member Walter Massey as chairman before the resignation of Ken Lewis as chief executive, who had combined the roles in 2001.

It is strange then that, amid all the vilification heaped on Goldman Sachs, so little criticism from regulators or investors seems to attach to Lloyd Blankfein’s double role. "It doesn’t really come up," he shrugs, looking slightly puzzled that Euromoney should even mention it. "If anything it feels like less of a big deal than it once did. Since Sarbanes-Oxley, independent directors have such strong authority that even as chairman I am often excluded from their discussions."

Notional authority is one thing, competence another. And perhaps it just looked a little unfortunate for Blankfein to troop into the Fed accompanied by the chairman of the board’s compensation committee who happens to be a former chairman and chief executive of Fannie Mae, a failed company with which Goldman was attempting to do a nifty deal to reduce its own tax liabilities.

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