Why I Am Leaving Goldman Sachs - NYTimes.com

Why I Am Leaving Goldman Sachs - NYTimes.com

Yesterday's New York Times Op-Ed piece by Greg Smith has sent shock waves through Wall Street. This was not, however, because of the "revelation" of a toxic culture and greed-motivated business practices in one of the world's largest and most important investment banks. The Street has been stunned because one of its own elites "broke the code" by going public, confirming our worst suspicions: that the problem with Wall Street is not limited to to a few bad actors (as it was with the wave of corporate fraud in the early 2000s), but is symptomatic of a fundamentally corrupted corporate culture that rewards profits and has made a mockery of government regulators, business ethics programs, and even its own customers.

Instead of analyzing Smith's public resignation, I share with you some excerpts taken from his letter which highlight his main points and represent, in my view, a "call to action" for Corporate America and those responsible for remedial actions.  Smith's points are a "to do" list for those of us tasked with helping companies turn around their ethical cultures and create real, effective Ethics and Compliance activities that fundamentally change the business processes of U.S. corporations.

• ...the environment now is as toxic and destructive as I have ever seen it."
• "...I look around today and see virtually no trace of the culture tha made me love working for this firm for many years. I no longer have the pride, or the belief. 
• ...the current chief executive officer....and the president...lost hold of the firm's culture on their watch.  I truly believe that this decline the firm's moral fiber represents the single most serious threat to its long-run survival."
• "The firm changed the way it thought about leadership. Leadership used to be about ideas, setting and example and doing the right thing. Today, if you make enough money for the firm you will be promoted into a position of influence."
• "Today, many of these leaders display a Goldman Sachs culture quotient of exactly zero percent. ...not one single minute is spent asking questions about how we can help clients. It's purely about how we can make the most possible money off of them."
• "It makes me ill how callously people talk about ripping their clients off." I have seen five differnet managing directors refer to their own clients as "muppets."
• "No humility? I mean, come on. Integrity? It is eroding. "
• "It astounds me hoe little senior management gets a basic truth: If clients don't trust you, they will eventually stop doing business with you."
• "You don't have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about "muppets", "ripping eyeballs out", and "getting paid" doesn't exactly turn into a model citizen."
• "Goldman Sachs today has become too much about shortcuts and not enough about achievement. It just doesn't feel right to me anymore."
• "I hope that this can be a wake-up call to the board of directors....weed out the morally bankrupt people, no matter how much money they make for the firm. And get the culture right again...."

I hope that this letter is a wake-up call for ALL boards of directors, particularly those in the financial industry.  We have got to get this culture right again. For our economy, for our children, and for our country.