Goldman Sachs Resignation Crisis

Photo Courtesy of: The Telegraph (2012)
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9142641/Goldman-Sachs-chief-Lloyd-Blankfein-disappointed-by-claims-of-toxic-greed.html

            The resignation of an executive in any corporation, large or small, can rock the very foundation on which the company functions. As with all resignations, there is a chance that it is a mutual parting of the ways or disagreement and bad blood. The recent resignation of Goldman Sachs executive Greg Smith happens to have occurred under the latter. Now what does this mean for Goldman Sachs? The company is now faced with fighting off a negative corporate culture reputation as a result of Smith’s harsh words in his very public resignation letter.

Photo Courtesy of: heatingoil.com
http://www.heatingoil.com/blog/goldman-sachs-advice-sell-oil-futures-triggers-big-price-fall-0412/

            Goldman’s PR department released a statement disputing Smith’s claims of a corporate culture that flourishes by making as much money as possible off of its clients. In the statement, Goldman Sachs executives stated, “Needless to say, we were disappointed to read the assertions made by this individual that do not reflect our values, our culture and how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.” However, was the statement enough? Smith’s comments were strong, laced with resentment and disgust towards the company’s practices.

            I believe that an attack on corporate culture runs deeper than an attack on a defunct or poor-quality product. Corporate culture is the very essence of a company. A poor product is easier to fix than the ‘personality’ of a corporation. Regardless of the statements released by Goldman Sachs, Smith has planted a seed in the publics mind. He has made them question the corporation and its practices. For this reason, I believe Goldman Sachs needs to provide proof to customers, stakeholders, and other important publics that the culture of the company is one that fosters ethical behavior.

            How can Goldman Sachs do this? Reassess and rebrand. Create an initiative that will foster and promote an ethical corporate culture where all employees strive to provide the utmost service to customers. It is a tough challenge, but one that needs to be accomplished by Goldman Sachs.

What do you think the company should do?