John Thain wants to know why his new colleagues at Merrill Lynch can’t just
Mr Thain, whose tenure as Merrill chief executive begins on Monday, said
in an interview that he believed there was insufficient co-operation between
senior Merrill executives, a problem that could have contributed to the bank’s
disastrous $8bn mortgage-related writedown.
“Merrill has a strong culture but they don’t have the same teamwork
at the senior level,” Mr Thain said in the interview last week. “It
needs a more co-operative team approach.”
Goldman, which has been relatively untouched by the subprime mortgage crisis,
has long operated on a consensus basis, a style that dates back to its history
as a private partnership. Mr Thain spent most of his Wall Street career in
the Goldman system, rising to become co-president before leaving in 2003 to
take over the NYSE, which was then mired in the worst crisis in its 215-year
This is a great idea, in theory. But Goldman is the only major US
investment bank run with a "co-operative team approach". Smaller,
private shops, like Rothschild, might have it, but at the big public investment
banks a dog-eat-dog culture has seeped into the corporate bloodstream for years
now and it’s not the kind of thing which can be easily excised.
If Thain does manage to change Merrill’s culture in this manner, then he will
surely have earned his pay
package. But I’m not holding my breath.