Corporate Governance at Merril Lynch
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Case Code: CGOX007 Case Length: 12 Pages Period: 2003 Pub Date: 2003 Teaching Note: Not Available |
Price: Rs.300 Organization: Merrill Lynch Industry: Investment Banking Countries: USA Themes: - |
Abstract Case Intro 1 Excerpts
More than reacting to a changing world, we are committed to leading change – setting new standards for the industry, creating a more disciplined, agile and accountable culture, and generating sustained, meaningful value for clients, shareholders and employees, now and in the future.
-E. Stanley O'Neal, Chief Executive Officer, Merrill Lynch and Co., Inc.
Introduction
In December 2002, Merrill Lynch (Merrill), one of the leading investment banks in the world, reported net revenues of $18.6, billion, 15% lower than that of 2001, and post-tax earnings of $2.5 billion, (76% higher than that of 2001), the third best in Merrill's history. The stock prices jumped 47%4 during the same period. In 2003, Merrill was ranked #24 in Forbes 5005. In 1914, Charles E. Merrill and Edmund C. Lynch (room partners in a boardinghouse of New York) founded Merrill. The company had gradually strengthened its position over the years to emerge as one of the leading investment banks in the world.
It offered a wide range of products and services to its clients in Europe, Middle-East, Africa, Japan, Asia Pacific, Canada and Latin America. Merrill had organized its operations into three business groups, namely Private Client Group (PCG), Global Markets and Investment Banking Group (GMI) and Merrill Lynch Investment Managers (MLIM). PCG provided retail brokerage, trust services, mutual funds, and life insurance and annuities. GMI offered investment banking, brokerage, and clearing services to corporate and government clients. MLIM provided asset management services. With a network of 670 offices worldwide, Merrill was the market leader in multiple lines of business. The company was the world's largest underwriter. In the early 2000s, Merrill had started restructuring itself to enhance operational efficiency and cut costs. The company had retrenched 22,0008 employees (31% of workforce) and replaced 6,600 brokers with 460 call centre agents to cut costs...
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