3 responses to “Goldman Sachs – Trust, Corporate Culture and Societal Expectations”

  1. David,

    Thanks for a very thoughtful post; it helps me formulate my own thinking. Your take on changing perceptions feels very right to me.

    It is the caveat emptor culture vs. the fiduciary culture. The exchange yesterday about “do you or do you not have an obligation to keep your clients’ best interests at heart’ crystallized it. Senator Dodd gave up a few weeks ago (under intense industry pressure) on a clause that would have held the brokerage industry to the fiduciary standard that the Financial Planners Association (think CFP certification) holds itself to. The brokerage industry adheres to the “appropriate” standard–a much lower one.

    What’s interesting to me is that very technical issue was played out in plain English terms, and the world could judge for itself which view sounded most sensible. On that issue, it seems to me, Goldman was the loser. That has nothing to do with the very valuable and utterly legitimate role of market-maker; but everything to do with the morphing concept of “client service” within Goldman over the years.

  2. I’ve been reading an interesting book, “What Would Google Do?”, that mentions how some companies now have their employees reading relevant blogs about their industry and, where the blogs are questioning a particular practice of a company, the company’s employees respond in those blogs. That discourse often includes admitting where the company made a mistake and what it’s doing to recover from it, especially in terms of how the customers will benefit.

    Companies have greatly benefited from listening to their constituents’ very public Web-based complaints — even when those complaints are not about illegal matters, but matters of ethics — and have even greatly enhanced their stature accordingly.

    The key principle at play is that companies that admit it when they’ve transgressed the public’s trust, very often emerge with yet more trust from the public.

    I suspect that very smart business people know of this phenomena — but the urge to still cloak themselves in secrecy must be overwhelming, probably from feedback of the lawyers and PR people who still underestimate the intelligence of the public.

  3. I want you always make new articles like this. I hope you will read my this comment.It is the caveat emptor culture vs. the fiduciary culture. The exchange yesterday about “do you or do you not have an obligation to keep your clients’ best interests at heart’ crystallized it. Senator Dodd gave up a few weeks ago (under intense industry pressure) on a clause that would have held the brokerage industry to the fiduciary standard that the Financial Planners Association (think CFP certification) holds itself to. The brokerage industry adheres to the “appropriate” standard–a much lower one.
    ===========================
    Daniel01

Translate »