Welcome to Goldman Sachs, Mr. Siewert – Update

In an earlier post, I suggested that Goldman send a note to its employees to respond to Greg Smith’s public resignation letter.  It appears my advice was taken. Goldman chiefs Lloyd Blankfein and Gary Cohn did indeed send a memo (perhaps I’ll send them a large bill).  It was very well done.  Here’s why:

  1. It used data, not opinion.  Goldman was able to cite its employee survey data to demonstrate widespread support for the firm and its business practices.  That’s much stronger than simply saying they disagree with Greg Smith’s assertions.
  2. It showed Goldman has a process.   Goldman has a mechanism that enables employees to raise concerns, and to do so anonymously if they wish.   (The requirements of the whistleblower-protection statute likely account for that, and similar processes can be found at many big firms.)  Goldman also pointed out that Smith didn’t avail himself of that process, which makes him look selfish and undercuts his credibility.
  3. It admitted fault. Blankfein and Cohn acknowledged that the firm doesn’t always get it right and tries to set things straight when it finds a problem. That was a good way to respond to Smith’s claims without being specific. Here, admitting fault isn’t a sign of weakness but of strength.

Goldman has a lot of work to do to restore its reputation, but this memo is a good, timely response on a critical day.

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