Decision looming on share debut

YOU don't have to look hard in London or New York to find current and past employees of Goldman Sachs who regret the decision by that firm to abandon its partnership and go public.

It was not only the sometimes unappealing change in behaviour of individuals who suddenly had a windfall of stupendous wealth, but also the sometimes unappealing nature of changes in the firm itself.

The public markets demand earnings growth. Meeting that demand can lead a firm into areas of business, and cause changes in the way it treats clients, that as a partnership it might have avoided.

There is a second issue. Investment banks have been described as the ultimate communist organisations. There is a mix of labour and capital in the business but by far the greater proportion of the rewards go to labour - the staff, not the owners.

This is notwithstanding the fact that the people could not do the job they do without the firm's balance sheet and reputation backing their activities.

Anyone tempted to buy shares in an investment bank should reflect that not only do the firm's assets go down in the lift every night, but they take the money with them when they go.

It should therefore be with mixed feelings that partners of Lazard assemble this week to hear the latest plans for their public flotation next year. Even those who have not been at the firm very long are to some extent custodians of the business, benefiting from what they have inherited.

Previous generations sought to improve on their inheritance and pass it on to the next generation. This one seeks to cash in and make itself shedloads of money.

Whether this proves to be good for the firm, good for the investment banking business, good for the clients and good for those who don't have an equity stake, will no doubt be fully debated. But given that it will certainly be good for the shareholders, there is no doubt which way the decision will go.

Francis legacy

MARY Francis, who announced today that she will be leaving her post as director-general of the Association of British Insurers next March, is something rather special in the world of City trade associations. She has made a difference and she will be missed.

In Allan Leighton's famous phrase, Francis plans to go plural - to concentrate on her non-executive career.

This, it must be said, is already quite impressive because she sits on the board of Centrica, on the court of the Bank of England, on the Press Complaints Commission (so this piece will be suitably flattering) and is a trustee of the Almeida theatre. But given the demand for qualified female non-executives she will no doubt be sought after by several more FTSE 100 companies.

The real story, though, is the legacy she leaves.

When she came to the office five years ago after a lifetime at the Treasury and a later stint as economic and domestic affairs adviser in Downing Street to the then Prime Minister John Major, the prevailing attitude in City boardrooms was to have nothing to do with either politicians or regulators.

Her achievement has been to refocus the ABI so that it now plays a real part in public policy making in everything from the debate on pensions to assessing how much the nation needs to spend on flood defences.

More parochially, she also shaped the response to Government pressure for more shareholder activism by devoting considerable ABI resources to the issue and having it operate in a way that worked for her membership but which has also served to change the corporate governance landscape.

As a result there are few City chief executives or trade associations who think that what happens in Whitehall or the Financial Services Authority is no concern of theirs. And some are even beginning to pay attention to what happens in Brussels.

In five years, that's not a bad legacy. If she gets bored in Leighton Land, perhaps she could set her hand to turning around businesses.