Author(s): Patricia Beard

Current Affairs

In March 2005, Morgan Stanley, the most prestigious and, until recently, the most successful investment bank on Wall Street exploded when a group of eight retired executives ignited a revolt. This 'Group of Eight' - an Ivy League cohort that included a former chairman and president - called for the removal of CEO Philip Purcell, a Midwesterner who had come to power following Morgan Stanley's 1997 merger with Dean Witter Discover, where Purcell had been the chief executive.In the next four years, Purcell presided over a 50 per cent stock decline and a series of high-profile government and shareholder suits that Morgan Stanley has lost and, it seems, will continue to lose. But the revolt of the Group of Eight was about more than business performance; it signaled a clash of cultures and a battle for the soul of America's pre-eminent financial institution. Since its founding Morgan Stanley has been an aristocratic enterprise, guided by the motto 'A First-Class Business in a First-Class Way'.