Kelvinwright's Blog

postmodern thoughts

Why I Am Leaving Goldman Sachs

Corporate scandals are sadly nothing new. They have always been big news, and recent examples from the first decade of this century, Enron, and my ex-company WorldCom, demonstrate that the lessons are not being learned. However, more companies have started this new century thinking about corporate social responsibility, business ethics, codes of conduct and business practices, conscious perhaps of bad press and the very negative consequences of high-profile bad news and win at all cost mentalities. It is then apt that earlier this year one of the world’s most well know firms, Goldman Sachs, saw a very high-profile resignation that became one of the biggest pieces of corporate news of the last year, and proved a major PR headache for the company in question.

http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?pagewanted=all

Of course, we should really know the story from other side. If the phrase, “innocent until proven guilty” applies to people, it should also apply to companies. The company was quick to release a response:

http://www.businessweek.com/articles/2012-03-14/goldman-sachs-response-to-greg-smiths-op-ed

The initial report though is damning, citing a win at all costs mentality that goes top down through the corporation. Greg Smith, the ex-Executive and author of the letter, makes a heartfelt request for the company to return to a customer centred culture, making the client the focal point of the business once again. He calls for the company to weed out what he perceives as morally bankrupt people, no matter how much money they make for the company. Finally, there is a reminder that people who care only about making money will not sustain the firm, or the trust of its customers, for very much longer. Since Smith’s letter, the response has been mixed, from support for the hero who spoke out, to cynical remarks from an opportunist jumping on the bandwagon to attack an easy target.

One could look at examples of not just corporations getting things very wrong, but the numerous political scandals to have hit many countries, especially in the middle of the worst financial crisis in living memory: the UK with its expenses scandals that forced high profile resignations; Italy’s ex-Prime Minister and the numerous scandals that hit him, Spain and the cases of fraud that led to one of its most senior judges being investigated and sacked, not to mention ex-ministers of the previous Government being allegedly involved in cases of multimillion Euro fraud in Andalucía, whilst another faces public accusations of accepting sums of money in petrol stations, and last month, King Juan Carlos of Spain had to issue a public apology for going on an expensive hunting trip to Botswana while his country continued in the eye of the Hurrican that is its economic crisis.

Perhaps it is time for Politicians to put in place codes of conduct and to review their public perceptions in front of their clients – the people who vote for them. Perhaps a code of conduct for Politicians would be one way to move forward with the crisis, by winning back voter confidence, a code of conduct that forbids them from being on the boards of companies whilst they hold a political position; a code that makes it illegal to either make a gift to a politician, or for a politician to accept any gift of any value, as many companies now do; a code of conduct that makes all political expenses public property. A simple request, but hopefully one that politicians will listen to.

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May 19, 2012 - Posted by | Uncategorized |

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