By Gael O’Brien
May 3, 2010
Goldman Sachs CEO Lloyd Blankfein’s leadership is under attack. As earning back trust starts with him, his job becomes more difficult. To begin the process, he’ll need to suspend the conviction that Goldman is right so he can listen to information he would otherwise not hear as he seeks to make the best decisions. Essential to that will be his creating a safe environment where truth can be spoken to power.
Here are five suggestions:
1. The Annual Shareholders’ meeting on May 7, 2010 is a critical forum. By Blankfein’s authenticity, vision, and commitment, it must be clear what Goldman intends to do to regain trust. Media reports indicate Goldman intends to change some practices to ensure investors understand risk involved. Whatever changes made need to go far enough to be best practices in the industry, not just what should have been in place all along.
2. Blankfein should look at Goldman’s culture and how ethical behavior shows up. He should invite some renown ethics thought leaders to meet with him privately to give counsel, starting with a member of his board, Bill George. Others whose insights on ethics and trust would be valuable include Keith Darcy, W. Michael Hoffman and R. Edward Freeman. Freeman has been a leader in the Business Roundtable’s Institute of Corporate Ethics’ report on The Dynamics of Public Trust in Business.
3. Blankfein should meet individually with a few dozen of Goldman’s opinion leaders – men and women at various levels in the organization who have influence rather than authority – to give him off-the-record insight into how Goldman can do a better job of articulating and modeling internally and with clients the values of “honesty” and “integrity” the firm says is part of its 14 Business Principles.
4. Regulatory reform will happen with or without Goldman’s leadership so Blankfein should determine if he wants Goldman to be known for stepping up to help Wall Street begin to regain public and federal confidence. If so, Goldman will have to show dynamic leadership previously missing. Blankfein could start by taking Sen. Carl Levin (D-Michigan) up on his invitation for Goldman to help senators cut thorough the complexity as they seek to understand his industry and create effective regulatory reform.
5. Blankfein and his legal team and other advisors need to determine the financial and reputation costs of a vigorous defense of the SEC fraud charges versus a settlement. Having been cast as the poster child of greed and perceived unethical behavior, the symbol of a Wall Street run wild, Goldman could choose to define for itself a leadership role in helping the SEC ensure that loopholes and technicalities don’t create opportunities for investors to be defrauded. Or, given its rich expertise and thought capital, Goldman could develop a 10 point plan to improve industry transparency and offer it to the SEC.
Earning back trust isn’t hard. You just have to deserve it.
This piece is a selection from Gael O’Brien’s blog, The Week in Ethics: Columns on Ethics, Leadership and Life. It is republished here with the author’s permission.
The original piece can be read in its entirety at: http://theweekinethics.wordpress.com/