Goldman Sachs chairman and chief executive Lloyd Blankfein seems to have fended off a bid to split his role in two, a move that would probably have weakened his power at the under-fire investment banking giant.
Reports from the US say that internal talks about breaking up Blankfein’s responsibilities have been held for the first time. It’s a move long sought by external groups such as pension funds who believe that the current structure vests too much influence in the hands of one man.
In the UK having a, usually non-executive, chairman to oversee the work of the chief executive is enshrined in corporate governance rules.
But in America the top role at very large companies is usually combined, a symbol of how powerful are the very top executives in corporate America.
One proposal was that president Gary Cohn would take the chief executive officer role and vice chairman J Michael Evans would be elevated to president, leaving Blankfein with only the chairman role.
Responding to pressure, Goldman now seems poised to appoint a “lead director” who will be charged with evaluating Blankfein’s performance.
The pension fund of a large labour union now says it had withdrawn a shareholder proposal to split the chairman and CEO jobs after Goldman agreed to alter its board structure.
The American Federati on of State, County and Municipal Employees said it withdrew its split proposal
last month after Goldman agreed to appoint an independent lead director.
Putting in place a lead director “certainly doesn’t go as far as we wanted”, said Lisa Lindsley, director of capital strategies for AFSCME’s pension plan, but is “a step in the right direction”. The lead director is likely to be John H Bryan, who has served on Goldman Sachs’ board since November 1999, say reports.
A Goldman spokesman said: “We appreciated the constructive talks we had with AFSCME.”
Speculation about who will replace Blankfein — he has held the job since 2006 — has been rising as criticism of the bank grows.
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