Morgan Stanley’s Chairman John Mack Discusses Leadership through a Financial Crisis
Speaking to a full auditorium of students and members of the Raleigh area business community, Mack chronicled events in 2008, as they related to Morgan Stanley at the start of the financial crisis, and steps taken to stabilize not only that firm but the nation’s financial system.
Through the course of phone calls, meetings and negotiations, a number of proposals and options came up, were analyzed and rejected or acted upon. Included were transactions with financial institutions in China and Japan. Mack slowed down in his delivery to draw attention to how those transactions transpired.
“I have never dealt, in my 40-plus years of business, with anyone more ethical and honest than Mitsubishi,” Mack said as he shared some of the details of negotiations with the Bank of Tokyo-Mitsubishi.
“They had put a price on the table that they wanted to pay,” Mack said. “Our stock continued to go down, and they said they wanted to readjust the price, not a huge readjustment. We looked at it and came back with a proposal that over the life of the security would have probably cost them $300 million. They were putting $9 billion into our company. Their answer was that, ‘out of respect for you, we will do whatever you want’,” Mack said.
“I don’t know people like that and what I try to say to my bankers and employees at Morgan Stanley is, let that be a lesson. We’re not here to take the last penny. We’re here to do business in a forthright, straightforward way and not take advantage,” he said.
“I think one of the problems we’ve had on Wall Street – we take advantage. And what this business has to do is re-establish trust and honesty back to where it used to be, that when you gave your word that’s all you have to do. That’s what’s been lost in this business. Bankers are not respected and I can give you a lot of reasons why but I think it’s broader than just bankers. It’s going to take a long time for this industry to earn the respect of the American people or the people in the Europe. The U.K. is more on the war path than we are here in U.S.,” he said.
Following are a few key points on leadership lessons Mack’s presentation.
- Communicate as much as you can.
- Be seen as much as you can.
- Take care of your clients.
- Take care of your employees.
- You have to be honest.
- You have to have a sense of humor.
- You have to make tough decisions with no time; you cannot dither.
- At the end of the day, you have to go with your gut.
The full lecture is available on NC State University’s iTunes channel. Click here to go directly to the audio file, including an introduction summarizing John Mack’s resume.
