Interviewer: Hello everyone. Um, and hello James. I haven't seen you in a while. Um, I'm retired. That's why.

James Gorman: Yes. Yes. Uh, so looking back at um culture, I came across all sorts of statements that I then discovered were actually called gorminisms. And so I thought that I would throw at you a few of your gormanisms and...

Interviewer: >> this could be dangerous but anyway

James Gorman: >> well only one of them I think I think the rest are fine. Uh so and then you can you can talk to us about it.

Interviewer: >> Yeah.

James Gorman: >> The first one strategy earns you the right to talk about culture.

Interviewer: >> Mhm.

James Gorman: >> Tell us about that one. Yeah. Um it's very hard to talk about culture if the business isn't

Interviewer: >> isn't working you know

James Gorman: >> which is what happened when you were when when you came into more

Interviewer: >> you can go I mean how this came up the board of directors came to me when uh Barclay's bank um had a new chairman new co and they did a global tour which was a culture tour and they said to me kind of why aren't you doing that I said

James Gorman: because firstly we're still figuring out what we're going to be when we grow up. I don't know what Back Lace is going to be when they grow up. What do you do if you go around the world, you tell people, "This is our culture. This is what it means. These are our core values." A week later, you come back and say, "Unfortunately, you're fired." But it's still a great culture. So, you've got to have a strategy which is viable, uh, which gives people an opportunity and promise for the future, and then build the cultural values around it. And those values is what let you change your strategy over time because it gives you the confidence it's coming from the right place. So strong companies I think of it as it's it's like you know different cabins on a a a train. You've got the strategy then the culture then the strategy then the culture then the strategy and that's how companies stay around for decades you know centuries is they're prepared to reinvent. They reinvent with the strong bones that come from confidence in their culture. But you've al you've also said that nothing drives culture more than winning. So winning people have to feel that they're winning before you can forge a real culture.

Interviewer: >> Well, that's something I think I agree with with was it Michael today? Although I'd have to say I just want to say and I'm not saying this to pander to you. I flew in on SAS this morning. It was a fabulous flight. The food was great. The people were nice. They didn't charge me for my bags. everything. It arrived 50 minutes early. 50. I was the first person through customs. I loved it. So, I'm sure Ryan Air is good.

James Gorman: >> I just haven't been on it. Um,

Interviewer: >> where the toilet's free?

James Gorman: >> It's Yeah, toilets for free. It was good. Um,

James Gorman: you know, I I think if again people will people will support a a non-winning culture, but you'll get a certain type of people who support that. If you want real goers, people who are prepared to put themselves, you know, on the line of fire, run to where the drama is, then they need to know that they're part of a winning organization. Charisma works great once you tell people to, you know, charge up the hill and they get all shot out and they say, "Well, that's not a really good idea." You say, "It didn't work so well, but charge again." And they say, "Have you got another way of getting there?" You know, it's like, so people need to be part of something. And if it's winning, it's infectious. And if it's infectious, they truly do exceptional things. So yeah, your job as a leader is to figure out a winning strategy that puts everybody in a position where they can thrive. Employees should stop feeling like tenants looking for their next bonus and start feeling like landlords. It's it's quite difficult to tell bankers not to be thinking about their next bonus.

Interviewer: >> Well, I say it in the nicest possible way. Um, you know, at the end of the day, uh, you've got to decide. This was another thing I had a discussion with the board. I said if I have a dream which is to get a really smart you know neuroscientist and really smart software developer and a computer scientist and put them in a room together and say come up with a camera and the camera has to take a picture of the inside of people's heads. So when they go to work in the morning, they stand in front of the gates site, you know, the floppy gates, whatever they are. You don't pull out your card to get in. The gate opens if it takes a picture of your head and you've passed the test. And the test is half of you has to be coming in for yourself because to deal with adversity, to drive forward, you've got to have ego, confidence, whatever. But half of you has to be coming in for the institution. So the the the rallying cry to the to the to the bankers or the traders or anybody was, you know, it only works if we all make it work. And if it's just about you getting your piece, 98% is you. If everybody does that, that's a war of attrition that won't end well. And by the way, you're paid in the stock and the stock is going to go up if it goes well. So why wouldn't you want this all to work? And that means putting a little bit of yourself aside to do what's right in the institutions. And happily, our investment bankers did. They were fantastic about it. But but blunt language and expressing it as you you know I don't come in for James Gorman Securities. I came in for Morgan Stanley and I respected its history. I respected the people who'd led it before me and I respect the people after it. Your job is to take the ship from one port to another, not to take over the ship only for yourself.

James Gorman: Was it was it much harder particularly during the the um uh the COVID pandemic and with younger you often hear today that younger people want experiences. They're not necessarily looking for a career in in one uh in one uh institution. Um, and you know, you've had a few controversial comments like, uh, if you're not, if you're so unhappy, just leave- which is reasonable.

Interviewer: >> Sort of thing my dad would say to me. You know, it's like it's the truth.

James Gorman: >> But you've also said that if you're in career land, you're building a professional life and that requires being around other human beings to pick up soft cues. Young people are nuts if they're not in the office. That's where mentoring happens.

Interviewer: >> Yeah. I you know I felt very strongly as CO was going on and and I was criticized by a lot of people for what I said and partly was I'd had CO very early and got through it. So their attitude was it's easy for you to say what I said was I don't know if it's on your list. Um if you can go to a restaurant you can go to the office.

James Gorman: >> There's one on the Hampton.

Interviewer: >> And what happened was I was at I was at a restaurant in New York picking up my food. I've been to the gym. I was picking up my food. It's a little Japanese restaurant called Bond Street ST. And a big dude walks up to me, puts his arm around me. He says, "Great to see you." I said, "Who are you?" He said, "I work in the organization, blah blah blah." And he said, "It's fantastic and crowded restaurant." And and he said, "Can we get a selfie with this table? We all do a selfie together. Everybody's high-fiving each other." And I said, "Hey, finding being back at the office." Oh, I couldn't go in the office. Not safe. Like, what? What about all the kids? He's the senior management director. What about the young kids who are coming back to an apartment with three other kids in them? There's no privacy. There's a dog barking. You know, the neighbors are yelling and they're supposed to be doing work and they want to go in the office and their bosses aren't there. I said, "It doesn't work that way." We got the opportunity. We were mentored. We were developed because other senior people were around. Even as simple as would you, when I was a young lawyer, one of the senior partners one day said, "Would you walk with me?" It was like four blocks to the court for a trial he had. I wasn't involved in the trial, but he was smart enough to realize that just being together for four blocks would change my day, change my month, I think.

James Gorman: One of the most important um uh things that you've done uh at Morgan Stanley was to manage the succession and you've become a bit of an expert in managing uh success succession smoothly and you've been charged with do doing that more recently at Disney. Um, what does it really take? And isn't it just throwing money at the other candidates, which you also did?

Interviewer: >> Well, we um I don't know that we we certainly we gave sign on bon bonuses to couple of people at Morgan Sunny. We did none of that at Disney. So, there's not like one model. Um I mean this could be a very long conversation but the the cliffnotes are um transparency. Yes, we're having a process. These people of the succession committee the board will decide. There will be a start date. There will be a transition date and there will be a finish date. And after the finish date, the C old CEO will be gone. They won't be like hanging around the hoop. They're gone. the new CEO will be put in place and they'll either have a non-executive chairman or an executive chairman for periods of time. So transparency of process, total respect, tell people the great news is you've been considered.

James Gorman: >> If you're really ticked off about the twoing and throwing, there's an option here. Take yourself out of consideration. Nobody did that, right? So you're considered. I want to give you absolute respect, but our job is to find the best candidate for this company for the next 10 years. And that means we're going to be rigorous. We're going to ask you questions. We're going to make you I had the Morgan Sandy people write strategy papers. Um I only gave them two weeks. I said, "Come to my office. Send it to me in advance. I'll read it. I don't want any paper. I'm just going to ask you questions." So that way if somebody wrote it for you, it's not going to be good, right? It's got to be real. It's what you think. We did health checks. We did all sorts of stuff. So

Interviewer: Uh when the when the the king the king has to be dead for the new king to succeed. So the king has to leave. And that's and I I left. I said to the board, they said stay, you know, you could stay a little longer. I said we can, but is it the right thing for the company, for the institution? You need somebody to do it 10 years. The fact I can eek out another couple doesn't work. So all of those are the elements but it really starts with with clarity,

James Gorman: transparency um and intentionality. There will be a result. You know Disney had messed up succession. It had had problems I should say for some years going back many decades. And we were absolutely convicted as a board it was going to be clean and Bob Iger to his credit did a great job through the transition. We have a terrific new CEO Josh Tamara

Interviewer: >> but he was his choice. What's that?

James Gorman: >> He was Bob Iger's choice, wasn't he? >> No, it's the board's choice. No, that's

Interviewer: >> but he was happy with it.

James Gorman: >> Yes. Very. Um, the job of a

Interviewer: >> think he won't he will he won't come back anymore.

James Gorman: >> Absolutely not. The job of a CEO is to present viable candidates fit for purpose. The job of the board with the succession committee doing a lot of the leg work is to ensure inside and outside the company you've considered all options. and then properly test and arrive a decision and it requires a board vote. We looked at I I mean I had so many people giving me names of people they thought could run Disney. It was a joke. I said do you even know who the internal people are? No, I don't know them. But my guy is the right person, right? So I said fine, I'll look at I'll look at anything. I went on looked at podcasts. I looked at TV interviews they did. I looked at speeches. I did reference checking on a whole bunch of outside people. We decided the best person was inside and they beat all comers and that's the right answer. But it's a

Interviewer: >> you managed you managed to also keep another internal candidate who wouldn't get

James Gorman: >> we kept we kept three internal candidates at at Disney and we kept the two other alternatives at Morgan Stanley. All of them were kept and everybody said it wouldn't happen. I said we'll see.

Interviewer: >> Um is

James Gorman: >> treat people with respect. It makes a real difference. Is it true that you reach out to all to new CEOs in the US and share your advice? What do you do when you hear somebody's a new CEO? Call them up and you say what?

Interviewer: >> Yeah, I called it didn't do it in the early years, been late years. I called every Fortune 500 CEO within a month or so of getting their job and many of the international CEOs really European more than Asian to be honest. Um, it was just say congratulations. Uh, I'm not here to sell you anything. I just want to introduce myself. If you ever got issues you want to talk about, and they immediately start talking about their chairman won't leave, they've got an activist, a dysfunctional member on the board, their kids are unhappy about them doing the job, they're going through a divorce. I mean, suddenly it was like, whoa, I didn't mean that. I was just saying hi. And you get into a long therapy discussion. Um, there was only one guy who turned me down, a French guy. I forget who he was. Um, and he said, "I don't talk to bankers." I said, "Well, that's good because I'm not a banker, but anyway, there you go."

James Gorman: >> Uh, so we've got exactly 16 seconds. Uh, no. Yeah, 16 seconds actually left. Uh, last night the president and the first lady both demanded that ABC get rid of Jimmy Kim. Uh the journalist in you now is sneaking out right at the end.

Interviewer: >> Yeah. Yeah.

James Gorman: >> What are you going to do? >> What am I going to do about what? About their demand.

Interviewer: >> Yeah. I there I have I have 12 seconds.

James Gorman: >> The the role of directors on any issue um of consequence is to advise not to do. And the reason for that is the people who make the decisions live with the consequences. What would your advice be?

Interviewer: >> I'm not going to share my advice. That's that's obviously between the board and and the CEO, but but these these are not these kinds of issues happen at time to time in large companies and um it's the job of the CEO with their team to figure out the right answer and they'll be guided you know by the board but it's like anything if you throw 10 15 people together they might have different views but I'm highly we have a terrific new CEO Josh um he's world class so I'm sure he'll rise to the occasion and do what the right thing is

James Gorman: >> okay. You wiggled out of it. Thank you, J.