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From the Editors

From the Editors

Former Exec Gives Goldman Sachs the Pink Slip - And the Finger!

March 14, 2012
Related Topics: Strategy and Management
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I don't in any way advocate departing employees to quit less than gracefully. That JetBlue employee may have thought it amusing to create a ruckus as he executed his exit strategy, but I personally think his credibility as an employee was greatly diminished that day.

The New York Times Op-Ed piece published today, though, is pretty interesting for a couple of reasons. Perhaps it was just a case of a disgruntled employee taking out his frustrations by tarnishing the reputation of a firm, but I think his intentions went much deeper than that.

For those who haven’t yet heard, Greg Smith — an executive director at Goldman Sachs who was based in London — terminated his 12-year tenure at the firm with quite a bang: by going on the record alleging blatantly unethical, though not illegal, behavior.

For instance, he recalls overhearing multiple conversations wherein the firm’s managing directors discussed and plotted how they ripped off their clients. Such deceitful behavior, Smith says, has become deeply entrenched within the firm’s corporate culture so much so that it may eventually lead to its demise.

How legitimate Smith’s claims are isn’t really for me to decide – I’m sure we’ll see how this plays out in the coming weeks. But what I would like to bring focus to here is where he’s pointing his finger: the top-most echelon of the company.

Here’s a snippet from the horse’s mouth: “When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm's culture on their watch. I truly believe that this decline in the firm's moral fiber represents the single most serious threat to its long-run survival.”

It’s interesting to me because we’re constantly talking about setting the right corporate culture – and whether this is driven and shaped by employees or leadership. A few months ago, I spoke with Darnell Lattal, the CEO and president of Aubrey Daniels International, about how it’s imperative that leaders take a proactive role in instilling an ethical framework within their organization and not settling for anything that would compromise it. My takeaway from writing that piece was that leaders actually have an opportunity to set — or reset — the moral compass of their employees.

Here, Smith is quick to place the blame squarely on the shoulders of the CEO and the president of the company because he claims such behavior went unnoticed under their watch. He believes the most senior leaders of the company ought to be held accountable for setting the tone.

Do you agree? If so, how do you ensure leaders are setting the ethical tone for your organization? If you disagree, how so?

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