From the Wall Street Journal on May 5, 2010:

“Frankly, at this point we have to go with an open mind and determine what we may be doing wrong,” Mr. Blankfein told customers of its private-wealth-management business during a 30-minute conference call. “On a very microscopic level, we’re going to use this as an opportunity for a deep dive on our practices and how we run things.”

Goldman Sachs Chairman and CEO Lloyd Blankfein said the firm will always put clients first.

He pledged to clients that he wants Goldman to “be the leader in things like ethics, in putting clients first.” Mr. Blankfein added “we don’t want people to be OK with Goldman Sachs. We want people to be bragging that they have their accounts with Goldman Sachs.”

Making Ethical Culture a Priority

The challenge for any organization to make ethics a priority is a big one. For Goldman Sachs, it will require a deep level commitment of not just the senior staff, but from all of its Managing Directors. In today’s environment employees, as well as external stakeholders, have no tolerance for superficial ethics programs and pronouncements. Putting clients first because of Goldman’s ethics will not happen merely because every employee is given a curriculum of web-based training modules to sit through. Goldman’s leadership will need to come to understand where there are gaps between the expectations of its clients and the expectations of its directors. These gaps are real and need to be openly discussed. Clearly laying out those gaps will be the first step to creating a dialogue where real alignment of interests can happen. Keeping in mind what will earn real buy-in from clients, and from Managing Directors will be the only way Mr. Blankfein will keep his pledge.