By Eleanor Bloxham
September 25, 2012

FORTUNE — When Goldman Sachs announced that it was changing CFOs last week, it also announced that it would be adding yet another insider to its board, soon-to-be-former CFO David Viniar.

Including another management member on Goldman’s (GS) board, bringing the total to three, is unusual for the board of a large public company. Today, most large public companies have only one manager on their board, the CEO, and the rest of the directors are at least deemed to be independent of management.

A chorus of three management voices on the Goldman board is a red flag. With three management votes, will oversight ratchet down even further at a board that’s already viewed as weak?

But no matter. Board concerns were absent from the conference call announcing Harvey Schwartz’s ascension to the CFO position. No analysts offered scrutiny of the board’s heavily weighted management representation, nor did analysts ask about the further changes Goldman says it intends to make to its board.

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In fact, mild, complimentary and (almost) obsequious was the general tenor of the analyst Q and A. True, CSLA analyst Mike Mayo mentioned the low stock price and asked about Schwartz’s sales background and ability to focus on risk – and Sandler O’Neill analyst Jeff Harte’s questioned Schwarz’s lack of traditional CFO skills. But those comments aside, analysts exhibited a coziness that suggested their own lack of independence.  Normura’s Glenn Schorr kicked off the analyst comments, thanking Viniar for “everything you taught us.”

Despite the analysts’ silence on the future of the board, earlier this year, the board’s independence came under fire in a public way over the separation of the chair and CEO positions.  From the analyst call, it remains unclear how much the board was even involved in Schwartz’s selection as CFO and how much due diligence they undertook. Goldman Sachs did not respond to a call and emails seeking comment for this story. No one from the board, including CEO Lloyd Blankfein, was available for questions on the analyst call.

Arthur Levitt, former chair of the Securities and Exchange Commission and an advisor to Goldman Sachs, says he knows the new CFO, having worked with Schwartz on the committee putting together Goldman’s business standards. He found Schwartz “stood almost invariably on the right side of transparency and doing things the right way.” I have a “high degree of respect for him…Harvey is a good presenter and good on his feet, not pompous or officious,” Levitt told me. Levitt believes it shows well for Goldman and other companies, like Bloomberg (with whom Levitt is also associated), when they create career opportunities for individuals outside their domains of expertise. (The New York Times reported that next month Why I Left Goldman Sachs, a book by former Goldman employee Greg Smith will spell out Smith’s less flattering views of the culture of the firm.)

Separately, the New York Times noted that two women were passed over for the CFO spot Schwartz ultimately received, “the treasurer, Elizabeth Beshel Robinson, and the chief accounting officer, Sarah Smith.”  That’s too bad because the firm has a decidedly mixed record on advancing women. The bank won an award from the nonprofit Catalyst in 2007 for its efforts to expand opportunities for women. But in 2010, the firm was sued by three women alleging “pay and job bias” as well as specific charges of harassment. And today, less than 10% of its current executive officers are women, according to Goldman’s own website.

It would seem the women in the running were qualified. Regarding Smith, Levitt said, “She’s terrific and could have done the job as well as anyone in the firm.”

It’s unclear whether Goldman’s board considered Schwartz’s role at the bank related to accusations that it misled its investors in the run up to the financial crisis. According to documents collected by the Senate’s Permanent Subcommittee on Investigation, on March 8, 2007, Schwartz wrote in an email, “one of our biggest issues is how we communicate our views of the market — consistently with what the desk wants to execute.” Related to the Timberwolf CDO — which was the subject of a $1 billion client lawsuit — Goldman executive Donald Mullen wrote in an email on May 11, 2007 to Schwartz, “I think we need to sort these things out before we make sales,” referring to the way the bank was presenting the investments to clients. Schwartz agreed communications with clients mattered but replied, “Don’t think we should slow or delay… However we need to huddle quickly before hitting bids I think. Is that not an option?”

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It remains to be seen whether Schwartz, who has a sales background, has learned lessons from the financial crisis scrutiny — and whether he has the judgment and caution required to gain the trust required in his new role.

Related to the future of the board, “the firm expects to appoint additional independent directors to its board in the near term,” Goldman’s recent CFO-related press release stated. But with the addition of Viniar, the board will already be at 11 members. The rule of thumb is that 12 is plenty; more would make the board unwieldy and less effective.

Going forward, it will be important to watch who may also be leaving the Goldman board. Three management insiders are too many. Beyond exits for them, James Johnson, Bill George, and Claes Dahlbäck are all long-tenured members with over 13, nearly 10, and over 9 years on the board, respectively. By most standards, they are — or will be — considered insiders soon. James Schiro, the lead director, sits on five major pubic company boards. (To use the common lingo, he’s over-boarded.) Stephen Friedman turns 75 in December. And according to the New York Post, Michele Burns, who was recently named head of Goldman’s audit committee, served on Wal-Mart’s audit committee “in 2005 and 2006, when the retail giant was secretly grappling with charges that its executives bribed officials.” She no longer sits on the Wal-Mart audit committee, and a spokesperson for Wal-Mart says that the current investigation by the board’s audit committee, which began in November 2011, is ongoing.

It seems that, for now, Goldman will be feeding analysts, investors, and the public small doses of change. But with governance issues out of the spotlight, will it get better or worse at the bank?

Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (, a board advisory firm.

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