Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, named James J. Schiro to succeed John H. Bryan as lead independent director, tapping an executive with accounting and insurance experience.
Bryan, the second-longest serving director, won’t run for re-election at the annual meeting after reaching the board’s retirement age of 75, the company said yesterday in a statement. Lois D. Juliber, 64, who joined the board in March 2004, also is stepping down at the annual meeting, leaving the firm with 10 directors.
Goldman Sachs, led by Chairman and Chief Executive Officer Lloyd C. Blankfein, in February staved off a shareholder proposal to split his roles by agreeing to appoint an independent board member as “lead director.” Brooklyn-born Schiro, who joined the board in 2009, is the former CEO of Zurich Financial Services AG (ZURN), Switzerland’s biggest insurer, and PricewaterhouseCoopers LLP.
“That background is helpful,” said Eleanor Bloxham, CEO of Value Alliance Co., a board advisory firm in Westerville, Ohio. “One of the things they really need to think about for this board is the level of expertise in the financial industry.”
PwC, one of the world’s four biggest accounting firms, has been Goldman Sachs’s auditor since before the firm went public in 1999, according to David Wells, a bank spokesman in New York.
Schiro, 66, spent 31 years at PwC before resigning in 2001. The St. John’s University graduate joined Zurich Financial in 2002 as chief operating officer for group finance and within months was promoted to be the company’s first non-Swiss CEO.
Bryan, a former chairman and CEO of Sara Lee Corp. (SLE), joined the Goldman Sachs board in November 1999, six months after the company went public. James A. Johnson, the former chairman and CEO of Fannie Mae (FNMA), is the only Goldman Sachs board member who has served longer, having joined in May of that year.
Schiro, who will succeed Bryan as chairman of the board’s corporate governance and nominating committee, also serves on the boards of San Diego-based Reva Medical Inc. and Amsterdam- based Royal Philips Electronics NV. (PHIA) At PepsiCo Inc. (PEP), the world’s largest snack-food maker, Schiro was named in May 2010 to a three-year term as the presiding independent director.
“Schiro is on four major boards, and it would have been preferable of Goldman Sachs to pick someone who had less going on,” Bloxham said.
Wells declined to comment on Bloxham’s criticism.
M. Michele Burns, the former chairman and CEO of Marsh & McLennan Cos.’ Mercer unit and the board’s newest member, will replace Schiro in leading the audit committee, the bank said.
Last year Goldman Sachs added Burns and Barnard College President Debora L. Spar to its board. Their appointments followed the departures of former Wal-Mart Stores Inc. (WMT) CEO H. Lee Scott in May after one year and Brown University President Ruth Simmons in May 2010 after 10 years.
Goldman Sachs announced the changes after the directors finished a meeting in India over the weekend, the board’s first in that country.
Greg Smith, a former Goldman Sachs derivatives salesman, wrote an opinion piece in the New York Times on March 14 in which he called on the board to “weed out the morally bankrupt people” at the firm and to “make the client the focal point of your business again.” He said he was quitting the firm after almost 12 years and blamed Blankfein and President Gary D. Cohn, both board members, for losing hold of the firm’s culture.
Blankfein, 57, and Cohn, 51, responded with a memo to employees that said Smith’s assertions “do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.”
The executives wrote that management will carefully examine the assertions, which included a statement that Smith had seen managing directors of the firm refer to their own clients, sometimes in e-mail, as “muppets.”
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