What Happened to Goldman Sachs: An Insider's Story of Organizational Drift and Its Unintended Consequences by Steven G. Mandis Page B
Authors: Steven G. Mandis
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accounts and from market making and places limits on how much banks can invest in hedge funds and private equity funds. Within weeks of its approval, Goldman decides to shut down the principal strategies group, which managed about $11 billion. As of this writing, Goldman and other firms are lobbying to delay implementation of the Volcker Rule pending further revision. A Delaware judge rules in a suit brought by the shareholders of El Paso Energy Corporation contesting Kinder Morgan’s purchase of the company and sharply criticizes Goldman for conflict of interest in advising El Paso, because Goldman owned 19 percent of Kinder Morgan and controlled two seats on Kinder Morgan’s board (R). El Paso was aware that there was a conflict of interest but asked Goldman’s advice anyway when Kinder Morgan launched its take-over attempt. A Goldman banker on the deal allegedly owned shares in one of the companies and did not disclose it. In response, Goldman launches a review of conflict management, and many competitors and law firms do the same. Goldman agrees to pay $22 million to settle civil charges arising from company procedures that created the risk that select clients would receive market-sensitive information, such as changes to Goldman’s recommendation lists and its ratings of stocks (R). The SEC says that the settlement includes violations of the same law that was at issue in the 2003 Treasury bond settlement. Blackrock, the world’s largest money manager, announces that it is setting up an electronic bond-trading platform that will allow it to make transactions directly with other investors and bypass investment banks (C). In August, the Justice Department announces that its investigation is closed and that it will not seek criminal charges against Goldman. Goldman eliminates most two-year contracts programs for most analysts hired out of college (C). CFO David Viniar announces that he will retire in January 2013. Goldman named 70 employees to its partnership, which are down from 110 in 2010 and 94 in 2008 (C, O). Around 14 percent of the new partners in 2012 are women (the highest percentage since at least 2006), and 59 percent are based in the Americas. The total partners represent 1.7 percent of the total employees.
Appendix H
Goldman’s Culture and Governance Structure
Acknowledgments
I would like to thank the faculty, graduate students, and administrators at the Department of Sociology at Columbia University, and in particular Professor David Stark, my thesis adviser and mentor, and Professor Josh Whitford, the director of graduate studies, for their training, support, and advice. In addition, I would like to thank the faculty and administrators, as well as my MBA and Executive MBA students, at Columbia Business School for their encouragement.
I want to thank my agent, Susan Rabiner, who, together with my editor at Harvard Business Review Press, Tim Sullivan, saw my PhD dissertation for what it was—a book not just about Goldman Sachs, but a book that brings business and finance together with sociology to improve the study of management, sociology, and public policy. They understood my vision and helped make it a reality.
Thank you to those I interviewed. I would love to recognize your contributions, patience, and time on an individual basis, but I want to respect your privacy.
Many professionals, professors, students, classmates, research assistants, and friends helped with my training and/or the book. Many thanks to Gary Ashwill, Red Ayme, Peter Bearman, Erin Brown, Soman Chainani, Manu Chander, Sidney Dekker, Helena Ding, Yige Ding, Erin Dolias, Nate Emge, Gil Eyal, Michelle Fan, Stephani Finks, Joe Gannon, Jie Gao, Kyle Gazis, Katrin Giziotis, Angel Gonzalez, Angelito Gonzalez, Simon Gonzalez, Ryan Hagen, Kathryn Harrigan, Charles Harrison, Simon Head, Jon Hill, Gailen Hite, Karen Ho, Paul Ingram, Jane Jacobi, Sam Johnson, El Kamada, Ko Kuwabara, Nan Liu, Emily Loose, Yao Lu, Evangelos Lyras, Donald
Appendix H
Goldman’s Culture and Governance Structure
Acknowledgments
I would like to thank the faculty, graduate students, and administrators at the Department of Sociology at Columbia University, and in particular Professor David Stark, my thesis adviser and mentor, and Professor Josh Whitford, the director of graduate studies, for their training, support, and advice. In addition, I would like to thank the faculty and administrators, as well as my MBA and Executive MBA students, at Columbia Business School for their encouragement.
I want to thank my agent, Susan Rabiner, who, together with my editor at Harvard Business Review Press, Tim Sullivan, saw my PhD dissertation for what it was—a book not just about Goldman Sachs, but a book that brings business and finance together with sociology to improve the study of management, sociology, and public policy. They understood my vision and helped make it a reality.
Thank you to those I interviewed. I would love to recognize your contributions, patience, and time on an individual basis, but I want to respect your privacy.
Many professionals, professors, students, classmates, research assistants, and friends helped with my training and/or the book. Many thanks to Gary Ashwill, Red Ayme, Peter Bearman, Erin Brown, Soman Chainani, Manu Chander, Sidney Dekker, Helena Ding, Yige Ding, Erin Dolias, Nate Emge, Gil Eyal, Michelle Fan, Stephani Finks, Joe Gannon, Jie Gao, Kyle Gazis, Katrin Giziotis, Angel Gonzalez, Angelito Gonzalez, Simon Gonzalez, Ryan Hagen, Kathryn Harrigan, Charles Harrison, Simon Head, Jon Hill, Gailen Hite, Karen Ho, Paul Ingram, Jane Jacobi, Sam Johnson, El Kamada, Ko Kuwabara, Nan Liu, Emily Loose, Yao Lu, Evangelos Lyras, Donald
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