Via Blistering Op-Ed, Exec Bids Good Riddance to Goldman Sachs and Greed

Wall Street, New York
Wall Street, New York

For Goldman Sachs’ critics, former Executive Director (a mid-level management position) Greg Smith’s resignation via a New York Times op-ed piece confirms what they think of the 143-year-old investment bank. Their dirty laundry list is long: a history of government subsidies and bailouts while paying its employees posh bonuses; accusations it helped the Greek government mask the scope of its debt; and the firm’s involvement in the spike of food and commodities crises of 2007-2008.

Smith aired a bevy of grievances. The firm currently lacks any “moral fiber.” Its leaders equate leadership with money making, even if such investments knowingly fail clients. Internal emails mocked clients as “muppets,” as in the British term for morons, not in the American endearing term for foam frogs and pigs who star in movies.

Across the political spectrum, from Occupy Wall Street to the Tea Party, Goldman represents the coziness between business and government. Its list of alums, which includes Robert Rubin, Hank Paulson and John Corzine, represents both political parties. To have Goldman on one’s resume is the dream of not only many business school students, but university administrators who are determined to see that their programs are within the lists of top ranked schools. So what are we to make of Mr. Smith’s mother of all nasty-grams, which ranks it along other “take this job and shove it moments” with JetBlue’s Steven Slater, Sarah Palin and Barry Sanders?

Goldman’s managing directors surely think little about Smith’s resignation, even though its history of generously engaging public relations firms means it will surely hire a crisis management agency to steer it through this storm. At face value, an abrupt and very public resignation from the firm, which manages assets of at least US$923 billion, means little because 11,999 remain to make more deals. For some clients who praise Goldman’s level of client services and record of success, Smith’s adieu will come across as a disgruntled employee. Other clients, however, will question their relationship with the firm.

Rolling Stone writer Matt Taibbi, who has regularly reported on how Goldman “screwed” its clients, once again noted that the firm regularly dumps its most toxic assets on its clients–and rewards top executives for doing so. Even Forbes’ writers have slammed Goldman for its lousy record on corporate governance issues. So is Smith’s mea culpa self serving or a sign that corporate America is in for a massive cultural change? Harvard-trained Dr. Marcy Murninghan, who taught courses on “Money and Morality” at Harvard Divinity School during the 1990s, had this to say in an interview last night:

Both the words and the impact of Greg Smith’s “Dear John” letter demonstrate, I think, that there’s a hunger for a kind of moral awareness of individual and institutional actions, that they have consequences beyond what’s intended, that we live in a culture increasingly coarsened by a kind of “me first” ethic. It’s not just about “values”–which in the sustainability and corporate accountability space gets a lot of attention these days, as the vocabulary of responsible economic behavior continues to evolve, and folks seek to establish their brand or special niche.

According to Dr. Murninghan, Smith’s resignation is further evidence that public disgust with gauche behavior on Wall Street “is making room for a desire to understand and enhance the moral shadow in our institutional governance and behavior.”

Business attorney and corporate governance expert Douglas Y. Park had this to say:

The takeaway is that culture is not some amorphous concept. It’s about how you do business, how you treat your customers, how you reward your employees. It affects the bottom line. Culture is an issue that your firm’s board of directors must address.

For many of Goldman’s and Wall Street’s fiercest critics, the time to end the shenanigans and enhance that moral shadow is now.

Leon Kaye is a journalist, sustainability consultant and the editor of He also contributes to Guardian Sustainable Business. You can follow him on Twitter.

Photo of Wall Street courtesy Leon Kaye.

Based in Fresno, California, Leon Kaye has written for TriplePundit since 2010. He has lived across the U.S., as well as in South Korea, Abu Dhabi and Uruguay. Some of Leon's work can also be found in The Guardian, Sustainable Brands and CleanTechnica. You can follow him on Twitter (@LeonKaye) and Instagram (GreenGoPost).

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