Goldman Sachs Practices, Whatever They Are, Are Great

Whenever a firm (or person) has a period of success, characteristics (real or just claimed) of that firm attract compliments as if they caused the success. John Plender of the FT writes that "the culture of partnership...still survives [at] ... Goldman.... That is clear from remarks...by...Goldman's...chief executive".

Goldman Sachs has many more successful, high quality hedge fund alumni than any other firm, created over many eyars. These alumni couldn't be explained by the culture of partnership since they left the partnership. Perhaps they are explained by Goldman's having a deeper trading culture than other firms. In that case, perhaps that explains the firms recent successs, instead of the stories told by the CEO.

Also, it was once thought that splitting the CEO and Chairman's jobs and having a board dominated by outsiders was a better way to govern. Now apparently, as the FT observes, it's good to have a board with lots of management on it since they understand the business (as if management's insights on risk wouldn't be available to a board were they not members) and the combination of CEO and Chairman in one person at Goldmans doesn't appear to disallow their governance's being so good that it's a model for others. (we can discuss whether the effect of 4 out of 12 on the board being current or former Goldmans executives creates an unbalanced board in another note).