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April 07, 2012
Shareowner Advocates Disappointed by Goldman's Choice for Lead Independent Director
    by Robert Kropp

The American Federation of State, County & Municipal Employees withdraws resolution calling for separation of Chair and CEO at Goldman Sachs, then expresses disappointment at the firm's choice for lead independent director.

Arguing that "the lack of an independent board chair contributed to Goldman's current problems," the American Federation of State, County & Municipal Employees (AFSCME) filed a shareowner resolution with Goldman Sachs last September, calling for the separation of the positions of Board Chair and CEO.

Lloyd Blankfein has held both positions since 2006. The 646-page report issued last April by the Senate's Permanent Subcommittee on Investigations urged regulators "to identify any violations of law" in the activities of the firm leading up to the financial crisis. The report asserted that conflicts of interest led Goldman to "place its financial interests before those of its clients."

Last month, AFSCME withdrew its resolution at Goldman Sachs after the firm agreed to appoint a lead independent director. The lead independent director, according to, is appointed "to serve in a lead capacity to coordinate the activities of the other Independent Directors." Under the terms of the withdrawal, Blankfein gets to keep both positions; effectively, he continues to be his own boss.

Announcing the withdrawal of the resolution, AFSCME President Gerald McEntee stated, "Today's move is a step in the right direction to make sure Wall Street CEOs are held accountable to their shareholders and that taxpayers are not on the hook for their risky bets. The appointment of a lead director will provide a much needed and vital check on the company's practices and conflicts of interest."

But then the independent directors voted to appoint James Schiro, the former CEO of Goldman's auditor PriceWaterhouseCoopers (PwC) and a member of Goldman's board since 2009, to the position. News sources have reported that AFSCME indicated to Goldman that the appointment of Schiro would be unsatisfactory, because of concerns that he would be insufficiently independent.

"We are a little bit disappointed," Lisa Lindsley, director of capital strategies for AFSCME, said. "It would be hard for him to be an independent advocate for shareholders."


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