So Much Is Not Enough

James D. Wolfensohn, A Global Life (Macmillan, 2010). 

Jim Wolfensohn started life in a modest Jewish home in Sydney and rose to become an international celebrity. A list of his accomplishments could fill a page. He was a member of the 1956 Australian Olympic fencing team, became an officer in the Royal Australian Air Force, a partner of the leading stockbroking firm Ord Minnett and, at the age of thirty-one, a joint managing director of the prestigious merchant bank Darlings. Spreading his wings overseas, he became president of Schroders Inc, running the American office of the London-based merchant bank Schroders, then chairman of Salomon International, before spending a decade as president of the World Bank. He is, or has been, a fellow of the American Academy of Arts and Sciences, a fellow of the American Philosophical Society, trustee of the Kennedy Family Trust, chairman of the Carnegie Hall board and adviser to US Presidents. He is a millionaire several times over and his list of friends and acquaintances includes world figures ranging from Yasser Arafat to Bill Clinton.

For decades, Wolfensohn enjoyed star status in Australian financial circles and media. He was the wonder boy who had conquered the heights of international finance. But that’s not how his autobiography reads. A Global Life is in essence an autobiography of frustration because, with the exception of his wife Elaine and their three children, Wolfensohn never seems to have got quite what he wanted.

He wanted the chairmanship of Schroders, and he missed. At Salomon he was leader of the corporate finance department, but felt he had let down his colleagues by spending most of his time on the rescue of Chrysler—which brought large fees to the firm but meant he had not been able to spend as much time building a broader business base for Salomon. At the World Bank he embarked on a crusade to reduce Third World poverty, which of course was still there by the time he left the bank in 2005. One of his final roles was to become, at the request of President George W. Bush, the American envoy to the quartet which was trying to find a peaceful settlement between the Palestinians and Israelis. He eventually resigned in protest because the then Secretary of State, Condoleezza Rice, was conducting her own negotiations with the Israelis and leaving him out of the loop. And, as the whole world knows, the Israelis and Palestinians still don’t have an enduring peace settlement.

The probable key to Wolfensohn’s failure (an exceedingly high-level one) is on page 174 of the book, where he candidly repeats an assessment by a former colleague named Leslie Murphy. At the time, Wolfensohn was running the American operations of Schroders and believed he had been promised the chairmanship. But when the incumbent, Sir Gordon Richardson, left to take up the chair at the Bank of England, Wolfensohn was upset to discover the board was split on whether he should be the successor. In a memo to Bruno Schroder, Murphy wrote: 

The one thing that Jim wanted above all else was to be loved. He wanted people to love him, and he wanted prestige. If you appoint him as chairman, as you clearly can do, what will happen to the staff? What will happen to the senior people? A number of them will leave; no doubt about that. You can’t run the place, and it is going to be very difficult for Jim against the hostility of the staff. You’ve got to go along with what the majority of the board wants. As much as I love Jim, I don’t think it a good idea to appoint someone as chairman whom the rest of the board cannot deal with. My advice is to appoint David Airlie, even though I am not sure how well he can do the job.

This memo is quoted in a chapter titled “The Outsider”. Wolfensohn was a Jew in a Jewish bank, but he was an outsider because he was an Australian in an English bank and had spent much of his time at Schroders in New York instead of London. When the vote on the chairmanship came to the board, Wolfensohn got seven out of thirteen. But the chairman, Lord Franks, said a majority of one or even two votes was not enough. More than half of those opposed to Wolfensohn were people who ran the business. Wolfensohn’s support was from family shareholders and non-executives.  

Franks was probably right in assessing that a chairman of a successful bank had to be supported by the senior executives. (If the bank is unsuccessful, maybe a new chairman is needed to straighten out some of the senior staff or even sack them.) Murphy was also probably right. In business—as in most other fields of worthwhile endeavour—a desire to be loved above all else is rarely the best trait for a team leader. Respect and fear are usually more important.

Wolfensohn—who thought he had the chairmanship in the bag—was “totally deflated” and left soon afterwards to join Salomon. His many admirers in Australia may also be a little deflated by this book, because it leaves a little clay on the feet of their hero.

Of course, Wolfensohn is being harsh on himself in several respects. He almost takes personal responsibility for failing to eliminate world poverty and settle Middle East peace—tasks which anyone short of God would find hopeless. And while he may not have achieved everything he wanted, he became the greatest international banker in Australia’s history. 

Take it easy, Jim. You’ve played well and done good. 

Trevor Sykes’s most recent book, Six Months of Panic, was published by Allen & Unwin last year.