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Lunch at The Four Seasons with: Richard Goldstein

Published by The New York Sun on 2006-03-22

Richard Goldstein of Massachusetts says he's in the business of sex and hunger.

"We serve primal needs," the chairman and CEO of International Flavors & Fragrances said yesterday. "You could say that we're in the business of taste and smell."

He wasn't being flippant.

"If you invite me to your home, I could show you that almost every product that you use in your living room, bedroom, kitchen and bathroom contains some element that our company supplies," Mr. Goldstein said. "That means toothpaste, detergents, deodorants, candles, soaps, food products, beverages, dairy, shampoos, candies, perfumes and colognes, among other things."

His company, which reported revenues of $2 billion - and net earnings of $193.1 million - last year, operates in 62 facilities in 31 countries around the world, supplying products to the best known purveyors of consumer goods. IFF and its predecessor companies have been in business for 173 years, and Mr. Goldstein has been CEO for 6 of those years.

His stewardship of the Fortune 500 company ends in May, when the 64-year-old Mr. Goldstein will retire.

"Whoever my successor is will find one of the best performing companies in the world," Mr. Goldstein said. "Its record is a tribute to the 5,000 people who work for IFF around the world, and their team spirit."

IFF's record - especially at a time of tough market conditions when prices of raw materials such as vanilla and rose oil fluctuate significantly - is also a tribute to Mr. Goldstein's management skills. He streamlined the company and also undertook major mergers and acquisitions that brought IFF 12% of the global market share of $17 billion.

"My style is simple - when you're in charge, you must take command," Mr. Goldstein said. "And whenever you're in doubt, do the right thing. You cannot compromise with truth. Nothing's of more value to a CEO than integrity."

The subject of integrity surfaces often during a conversation with Mr. Goldstein. While he's critical of the well-documented flamboyant behavior of some corporate executives, Mr. Goldstein said he believes that the overwhelming number of American business leaders hew to ethical practices.

His career prior to arriving at IFF in 2000 bears testimony to such adherence. Mr. Goldstein spent 25 years at Unilever, where his positions included that of president and CEO of Unilever United States, Inc., Unilever's holding company in America. Before that, he practiced law at Arnold and Porter in Washington, and at Choate, Hall & Stewart in Boston.

While that experience was enriching, Mr. Goldstein said that it was his three-year stint as special assistant to George Romney, secretary of housing and urban development during the Nixon presidency, that truly shaped him.

"George Romney played a defining role in my life," Mr. Goldstein said.
There were many instances when the unflinching morality of the Mormon from Michigan offered Mr. Goldstein trenchant instruction about resisting political corruption. But one incident stands out.

"I'd been entrusted to deal with monitoring the allocation of funds for Congressional districts just before the 1972 election," Mr. Goldstein recalled. "I was called to the White House and ordered by an aide to H. R. Haldeman, President Nixon's chief of staff, to channel funds to certain favored Congressmen."

"I was young and foolish enough to say to that official, 'The last time I checked, it's only the HUD secretary who can give such instructions,'" Mr. Goldstein said.

As he tells it, the White House official became grim.

"You better get this done - or Romney is going to hear from the White House and from the president," the official said to Mr. Goldstein.

Mr. Goldstein returned to his office somewhat shaken. He approached Richard Van Dusen, Romney's under secretary and close friend from Michigan, and Van Dusen took the young man to see the boss.

"I remember the scene well - Mr. Romney was wearing his usual blue cardigan," Mr. Goldstein said. "It was one of those big offices, with a large desk. I told him what had happened in the White House. Mr. Romney got up, came around from behind his desk, and stood right next to me.
"And this is what he said to me: 'You do the right thing. I will take the heat.'"

In the event, Mr. Goldstein proceeded to allocate funds according to Secretary Romney's instructions, and not those of the White House.

But he paid a steep political price for demonstrating his integrity.

Some months later, Mr. Goldstein's name had been suggested for the post of assistant under secretary. He did not get the job.

"Years later, I came across an internal White House memo about that appointment," Mr. Goldstein said. "There was a handwritten notation that said, 'Candidate uncooperative.' It was signed by Mr. Haldeman."

That episode threw into sharp relief for Mr. Goldstein the tough ways of Washington's political establishment. But there were also other episodes that brought home to him how much of a city of caricatures the capital was.

"Some years later, while at Unilever, I was often called to testify before Congressional committees," Mr. Goldstein said. "Here were these down-home Southern senators and representatives, and they were often piqued at who this young man before them was. So I would speak in my Boston-Kennedy accent."

Mr. Goldstein proceeded to re-enact some of his testimonies. It wasn't only his accent that was exaggerated - so was his fulsome praise of the legislators. The fact that they lapped up his words - however intentionally theatrical they were - suggested to Mr. Goldstein that political egos could never be overestimated.

Becoming a lawyer hadn't exactly been on Mr. Goldstein's mind as he was growing up in the Boston suburb of Newton, where he was one of four sons of Harold and Effie Goldstein. His father was a traveling salesman of women's housecoats, and his mother sold gift items out of the family's three-story Victorian house.

"I had no idea what I was going to do when I was growing up," Mr. Goldstein said. "I began working at a men's clothing store, and there I learned all about dealing with people and how to creatively sell to them."

He continued working while attending the University of Massachusetts at Amherst, where he majored in accounting. A fraternity friend from Tau Epsilon Phi and Mr. Goldstein joined forces and ran a laundry service for students. The income was enough for him to buy a used 1956 Ford Fairlane, and also pay his annual tuition fees and living expenses - a magnificent $100.

Mr. Goldstein then obtained a bachelor of law degree from Boston University School of Law, and a master of law degree from Harvard Law School.

"What I really learned at law school was to think analytically," he said.

It was during this period that he met Linda Freedman on a blind date: they have been married for 40 years, and have two children, David, 37, and Laura, 35 (who has a 2-year-old daughter, Rachel).

"As I prepare to retire, the single most important lesson I can draw from my career is how important it is to have a strong family life," Mr. Goldstein said. "I've been blessed."

Retire? Does that mean leaving the business world?

"You never know when the phone will ring, with what offer," Mr. Goldstein said, with a smile and, of course, an exaggerated Bostonian twang.

Pranay Gupte,
Senior Writer and Global-Affairs Columnist


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