This is an audio transcript of the Behind the Money podcast episode: Is Goldman Sachs too big to change?
Michela Tindera
In January of 2020, David Solomon, the new CEO of Goldman Sachs, stepped on stage to address investors for a public presentation.
David Solomon
Good morning, everyone, and welcome to Goldman Sachs. I am really, really excited to have you all here today, and super excited . . .
Michela Tindera
David was just a couple of years into the job as CEO of the massive bank and the FT’s US banking editor Josh Franklin says, at this time, Goldman had a pretty established game plan for how it made its money.
Joshua Franklin
They’re really at the intersection of what makes global finance tick. They helped provide a lot of the liquidity and plumbing around the, around financial markets to do a lot of market-making activity. Their trading operations are really important to how global markets function. They also advise some of the biggest companies and private equity firms in the world on their dealmaking and corporate finance needs.
Michela Tindera
What was unusual about David’s presentation was that it was the very first time that the 150-year-old bank had ever done something like this.
David Solomon
We’re gonna ask you to hold your questions till the end of the day. That said, you should feel free to break into open applause any time it suits you.
Joshua Franklin
He invited all of their biggest investors, biggest analysts to Goldman Sachs’s headquarters at 200 West in Manhattan in Tribeca, gave them all a multi-hour presentation about Goldman Sachs’s strategy, Goldman Sachs’s business model, where it was looking to expand.
David Solomon
Today is about our path forward. Our goal is to clearly communicate our strategic direction, our plans for execution, our financial objectives, and our paths to achieving these goals, business by business.
Michela Tindera
Dressed in a black suit and a silver tie, David lays out his vision for Goldman in front of a big blue screen that says things like “an era of transformation and opportunity”.
Joshua Franklin
His big mantra is that Goldman needs to operate as the Fortune 50 company when it comes to having how the bank operates. More of a kind of public company mindset, so less freewheeling, more process-oriented.
Michela Tindera
Basically, David is saying he wants to run Goldman Sachs like it’s an Amazon or a Walmart. And that means putting more of a focus on things like delivering returns for their shareholders.
Joshua Franklin
And this really was symbolic of the new faces and the new type of Goldman Sachs that David was trying to present to shareholders, to be more shareholder-friendly, to be less of a black box company and be more communicative with investors. Michela Tindera When it comes to making these sorts of changes, there is a lot at stake here. Goldman Sachs is a bank with assets under supervision so big that they rivalled the entire GDP of a country like Italy. But not everyone has been on board with these new changes. Joshua Franklin With that comes more bureaucracy, which some people who’ve been at Goldman for a long time feels like takes some of the fun out of the place. Maybe it dilutes the special sauce that makes Goldman what it is. And so that’s kind of the tension that he faces, of kind of modernising it and making it more shareholder-friendly, people feel like this isn’t the Goldman that I grew up in. Michela Tindera So now it’s been more than two years since that Investor Day at the Goldman Sachs headquarters. Has David Solomon been able to realise the vision he described back then and cement his legacy as the leader who changed Goldman? Or is this old bank just unable to change from the ways it’s always done things?[MUSIC PLAYING] Michela Tindera I’m Michela Tindera from the Financial Times. On today’s episode of Behind the Money, is Goldman Sachs too stuck in its ways to change?[MUSIC PLAYING] Michela Tindera Hi, Josh, thanks for coming on the show today. Joshua Franklin Thanks very much. Michela Tindera So Goldman Sachs has a really long history on Wall Street, more than 150 years, actually. And, you know, we probably don’t need to go back that far for this episode. But let’s take […]
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