Goldman Execs Forgot to Read Their Own Prospectus
Thu, April 29, 2010 at 6:56AM 
The Economist, as it so often does, delivers genuine insights, rather than merely spitting back the day’s soundbites.
So, while other media outlets counted how many times the word “sh*tty” was used in this week’s Goldman Sachs hearings, reporters at The Economist were digging.
My favorite nugget of gold unearthed was this quote from Goldman’s prospectus when the company went public in 1999:
“Our clients’ interests always come first. Our experience shows that if we serve our clients well, our own success will follow. Our assets are our people, capital and reputation. If any of these is ever diminished, the last is the most difficult to restore.”
Evidently, this philosophy didn’t make it into Goldman’s foot-thick briefing binders, as its execs repeatedly choked on the simple question: Do you act in the best interest of your clients or yourselves?
With its reputation in tatters, Goldman needs to start listening to its communications advisors rather than its lawyers. Let’s call it the “Goldman Rule” of communications: Reputational risk can’t be hedged.
Reader Comments (1)
Spot on. The Goldman quote cited from the prospectus was the generic ethos of gentlemanly capitalism - where client relationships were prized above the deal. "My Word is My Bond" was (and still is) the motto of the City of London. However, more that client relationships have been disintermediated by the move to transactional banking - an entire ethos has been lost. "Your bond, my bonus" is new motto - heads I win, tails you loose.