Who could be chairman of Goldman Sachs?

By Felix Salmon
May 5, 2010
makes sense at Goldman Sachs, which is reportedly considering it, but if it were to happen, the decision would be a fraught one.

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Splitting the roles of chairman and CEO at a public company is nearly always a good idea. It makes sense at Goldman Sachs, which is reportedly considering it, but if it were to happen, the decision would be a fraught one.

For one thing, it would look panicked and defensive, rather than a long-term strategic move. But the main reason not to do this, from Goldman’s view, is simpler: it’s incredibly difficult to find a suitable candidate. Just think of all the qualifications which are needed:

  • The ability to set the strategic direction for what is still the world’s foremost investment bank and broker-dealer. How big should Goldman be? What kind of balance between banking and trading should it have? How much should it pay?
  • The ability to be the risk manager of last resort, keeping an eye on the balance sheet and making sure that nothing is getting out of hand. With David Viniar as CFO, this part of the job is maybe less important right now. But it’s still hugely important.
  • The ability to communicate effectively with shareholders, regulators, and politicians — in a way that Lloyd Blankfein is not so great at.
  • The ability to represent Goldman’s shareholders, who are to a large degree its partners.
  • The ability to restore the credibility of the rest of the board, which has been something of an embarrassment of late.

Is there anybody who can do all this? The WSJ article barely even brings up the names of Hank Paulson and Arthur Levitt before throwing cold water on them. My feeling is that if the job is going to be real, and not a figurehead, it really needs to be a Goldman person of some description doing it: maybe Bob Hormats or Byron Trott? Or bring back Jon Corzine? I wonder whether he’d take the job, since it comes with so much downside and so little obvious upside.

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