Ivey Publishing

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The Ivey Interview: Winthrop H. Smith, Jr.
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8 pages
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Ivey Business Journal
The Ivey Interview: Winthrop H. Smith, Jr. The rise and fall of Merrill Lynch is symbolic of the management problems facing today’s global financial sector. Winthrop H. Smith, Sr. famously partnered with Charlie Merrill in the 1940s to create a caring, collaborative corporate culture and introduce stock-market investing to the masses. His son, Winthrop H. Smith, Jr., who retired from Merrill Lynch in 2001 after concluding that the profit motive was hurting the firm’s culture, speaks to the Ivey Business Journal about the history of Merrill Lynch, the financial-services industry, and corporate culture. He describes Merrill Lynch’s five-part code of ethics based on the primacy of clients’ interests, respect for all (including employees), team effort, community involvement, and integrity. He relates how in 2001 the Merrill Lynch board decided that change was needed, despite the firm’s record earnings. Many long-standing businesses were eliminated and the firm engaged with risky products like subprime mortgages in the pursuit of quick profits. Smith argues that the most important role of boards is the selection of the CEO and quips that, “Bubbles always make some good people say the most dangerous words in investing, which are: ‘This time it is different.’”
General Management/Strategy
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