What Happened to Goldman Sachs: An Insider's Story of Organizational Drift and Its Unintended Consequences by Steven G. Mandis

Author:Steven G. Mandis [Mandis, Steven G.]
Language: eng
Format: epub, mobi
ISBN: 9781422194195
Publisher: Harvard Business Review Press

Management Committee Composition

The changes in the membership of Goldman Sachs’ management committee corroborate the idea of a shifting emphasis toward the legal standard of compliance and away from the original interpretation of the first principle, as well as reflecting the increasing complexity of Goldman’s business. In 1999 the firm had twenty-two management committee members, two of whom were in legal functions (around 9 percent). In 2009, the management committee had grown to twenty-nine members. There are two members related to legal functions plus one individual who is known for political connections, one individual responsible for compliance, and one person responsible for conflicts (representing 17 percent of the committee). At the IPO, banking and trading/PIA members represented around one-third of the members each. In 2009, banking was around 20 percent and trading/PIA/markets-oriented backgrounds represent close to half the committee.28 So there has been a shift at the management committee level as illustrated by an increase in legal and in trading/PIA/markets-oriented people. Remember, Sidney Weinberg had sought balance with a trader running the firm and banking having a large presence on the committee.

The balance of composition between banking and trading in leadership has been an important organizational element (as was the balance between newer and older partners). Sidney Weinberg sought this balance when he selected Gus Levy, a trader, to become senior partner, but he created the management committee with a majority of banking partners to instill some balance. There’s been a shift in the management committee composition as well as at the very top, with the top two having trading backgrounds.

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