Unless you live on the moon, you probably know that a resignation letter from a banker at Goldman Sachs has become the latest internet sensation. Greg Smith, an executive director, announced his resignation in the New York Times. He attacked the culture at the bank, declaring it to be ‘morally bankrupt’ and ‘toxic and destructive.’ Smith even alleges that, ‘Over the last 12 months I have seen five different managing directors refer to their own clients as “muppets,” sometimes over internal email.’ Talk about an incendiary exit. You can read the full text of his letter here.
Smith’s resignation is a stark reminder that clients should always be at the centre of everything any organisation does. His letter outlines his concerns that ‘the interests of the client continue to be sidelined…I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm.’
In an era of uncertainty and fears about sustainability, it’s all too easy for organisations to fall into the pattern of constantly firefighting, losing sight of their mission and potentially even their stakeholders’ interests. That includes charities. Whilst the ethos of the third sector and investment banks is clearly very different, I agree with Smith’s mantra that supporting the long term interests of clients is key to building a stronger organisation.
In tough times, whatever kind of organisation we work in, stakeholders must always come first. The charity sector has always been exceptional at this. Let’s not forget that, however hard the situations we’re currently facing are. It’s our passion for putting the people that we help first, and for the difference we make, that will get us through the challenges ahead.
Great post Zoe. Absolutely a stark reminder that your clients, and in the case of charities – donors and stakeholders, should always be at the heart of everything you do. And good for him for having integrity – a trait that everyone working for a charity should have.
On another note, I have real issue with the way that Greg Smith chose to resign. If he has an issue with the way the company treats their clients, by all means make this known, but internally by sending out an ‘all staff’ email. Why the New York Times? Where is his loyalty to the company that has employed him for 12 years, who he once did enjoy working for and which has no doubt (as a trader in the ‘good old days’) left him a very wealthy man?
Everyone is feeling the strain in these difficult times and charities are no exception. According to Charity Finance Directors Group, 38% of charities expect to make redundancies in the next 12 months, which will hit the sector hard.
Whilst Mr Smith was dissatisfied with Goldman Sachs (and I am in no way excusing their treatment of clients), did they really deserve to have their reputation tarnished in such a way? I dread to think what the consequences would be for a charity’s reputation if a disgruntled employee chose to resign in such a manner. We must always remember that there are two sides to every story and reputations which takes years to build can be destroyed in a second.
Hi Kirsty
Thanks, really glad you like the blog. I was interested to read this morning that Greg Smith’s resignation has apparently knocked £1.3billion of Goldman Sachs’ share price.
There’s an interesting analysis of the bank’s PR response to the crisis in PR Week here http://www.prweek.com/uk/bulletin/prweekukdaily/article/1122625/goldman-sachs-secrecy-blame-greg-smith-outrage-say-pros/
Personally, I’m of the view that negative spinning will only take you so far in such a situation. What Goldman Sachs should be aiming to do is demonstrate their focus on their clients and show how they have acted in their best interests.
And as you say, I do wonder when there might be a charity sector equivalent with a public resignation letter, especially with further redundancies forecast. When this happens, it could be enormously damaging. Goldman Sachs will eventually recover from this; they have the resources and resilience to do so. The trust of the public and stakeholders is valuable currency for charities, and a similar scandal could hit them a lot harder.