Can Thain Make Merrill More Collegial?

John Thain wants to know why his new colleagues at Merrill Lynch can’t just

get along:

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.

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