Who is a power broker?
Power brokers are individuals who wield considerable influence over decisions of other parties. Power brokers lobby for a particular decision through their personal or professional connections.
A power broker definition suggests it can also be a firm that acts like an intermediary between two parties. In the financial world, a power broker is typically someone with deep industry knowledge and connections. A power broker is able to influence decision-making and can be critical to deals such as mergers and acquisitions or investments.
What does a power broker do?
Power broking is done by an industry insider who is typically sought after by companies to gather support for their objectives, plans and issues. Power brokers usually demand high fees or future favours as compensation for their work.
Most power brokers will have deep knowledge of the field they are operating in and can identify key contacts in building their case. Media personnel and public lobbyists are often considered power brokers.
How do you become a power broker?
Power brokers are influential personalities who can steer outcomes and sway decisions, often via social connections. Having an expansive social network is critical to becoming a power broker, and an acknowledged social status is an added bonus.
Former top management executives of corporations or investors holding significant shareholding in companies are ideally positioned to become power broker examples in their respective industries. Individuals active in political circles are also sought after to broker deals for clients. Bankers and lawyers are also generally considered able to act as power brokers.
Power brokers are particularly important in the world of politics, Individuals holding high-ranking positions in Congress are often considered ideal candidates for the job.
In the business world, power brokers often facilitate closing merger and acquisition deals. Their names may not be publicly acknowledged or represented in any official documents connected with a project, but their work is considered critical to closing the deals.
Famous power broker examples
Robert Moses, a New York-based urban planner who greatly influenced the large-scale planning of New York in the 20th century, is considered one of the greatest power brokers in history, as depicted by Pulitzer Prize-winner Robert Caro’s book, ‘The Power Broker: Robert Moses and the Fall of New York.’
Moses was a US state and municipal official under whose supervision 35 highways, 12 bridges, numerous parks, housing projects, two hydroelectric dams, the 1964 New York World‘s Fair, and iconic structures such as the Lincoln Center for Performing Arts and Shea Stadium were built in New York. His projects greatly influenced large-scale planning in other cities in the United States. He was also instrumental in bringing the UN complex to Manhattan’s East River waterfront.
John Pierpont Morgan, or JP Morgan, was one of the most powerful US bankers and industrialists of all time. His leadership during the Panic of 1907 helped create the US Federal Reserve System still in operation today. Morgan frequently advised politicians on regulations and was consulted on economic topics; he also had an enduring impact on Wall Street, transforming it from a chaotic mess to a tight-knit group of big businesses at the forefront of one of the fastest-growing economies in the world.
Warren Buffet, whose property/casualty company Berkshire Hathaway (BRKb) has amassed significant stakes in numerous companies including Apple (AAPL), Coca-Cola (KO) and HP (HPQ), is also seen as a power broker because of his considerable influence in the business world. Known as the ‘Oracle of Omaha’, he inspires legions of fans to make the trek to Omaha for Berkshire’s annual meeting.
Other currently famous, rich and influential power brokers today include Microsoft creator Bill Gates, media tycoon Rupert Murdoch and Italian Prime Minister Silvio Berlusconi, who owns a 49% stake in Italy’s largest television network.