Earlier in the week, Goldman Sachs Group, Inc. (NASDAQ:GS) announced that James J. Schiro will be the new Lead Director and Chair of the Corporate Governance and Nominating Committee for its Board of Directors.
Schiro has served as a Goldman director since May 2009.
Prior to focusing on his corporate boards, he had a favorite form of communication to speak with employees and rally the troops. During his tenure as Chief Executive Officer of Zurich Financial Services, Schiro had a fondness for Google Inc (NASDAQ:GOOG) YouTube.
Known for his bluntness and “public introspection,” while at the helm of Zurich, Schiro turned the company around after a near collapse in 2002; he left the firm in December 2009 but in his final year using his straightforward communication skills, he taped numerous YouTube videos for employees, reported The Wall Street Journal.
In a March 2009 YouTube video, the former CEO said,”Welcome YouTube. I know there’s some concern about using an open platform like this, but I think special times require special means of getting our message out. I know this is a public means, but there’s nothing I’m going to say that I wouldn’t say to a customer, employee, or shareholder.”
From his four YouTube videos, they haven’t exactly set the Internet on fire: they have been watched 5,491 times. Perhaps it is Schiro’s presence on the videos (blankly starting into the camera) or the content (financial crisis), but there’s definitely room for improvement and more hits.
Get Ready for Greater Transparency?
People who know Schiro well thinks he may be an advocate for greater communication and a different tone for Goldman. There has been no comment him regarding his new role but Goldman said in a statement, “The decision to elect Mr. Schiro was made by our independent directors in an executive session with no management present. We are confident that he will serve all of our shareholders well.”
The naming of a lead director comes after Goldman reached a compromise with a union pension fund that had wanted the firm to divide the current role held by Lloyd Blankein of chairman and chief executive.
Before the proposal had been withdrawn, promoting Gary D. Cohn, Goldman’s current No 2., to CEO was an option if Goldman lost the shareholder vote, reported The Wall Street Journal, while Blankfein kept his chairman post.
As a compromise, Goldman said it would name a “lead” director as a means to have the fund drop the shareholder proposal to get rid of Blankfein and replace him with an independent chairman.
In his new role, Schiro will take over the Goldman’s 10-member board’s governance committee and oversee the board’s 10 independent directors’ meetings. He will also be responsible for evaluating Blankfein’s performance.
While he may be welcomed by his board peers, he does come with some naysayers and some who don’t see Schiro changing a lot at Goldman.
Not Everyone is Excited About Schiro
The American Federation of State, County and Municipal Employees (Afscme), which reached the compromise to name a lead director at Goldman, did not support Schiro as the choice because he is also Pepsico’s lead director. The union pension fund’s has been a critic of the company’s corporate governance and has said they will keep a close eye on Goldman and its shareholder proposals in the future.
Other raised eyebrows come from the fact that Schiro was PricewaterhouseCoopers LLP’s CEO. You guessed it, the firm has been Goldman’s auditor for many years.
And while it hasn’t been said in print, Goldman has a new PR guru in place. Should Schiro start using YouTube as Goldman’s lead director, will this conflict with the company’s message? Will there be a new battle between Schiro and Richard Siewert Jr.?