Goldman won’t regain public trust with Wall of Secrecy

What do companies need to do and say to win back pubic trust?

Jordan Kimmel of Trust Across America posed that question to me this week on his radio program on Voice America. Here’s the link to listen to the interview.

Jordan asked me about winning back trust after a crisis and about my experience in the Ford-Firestone mess that is the basis for my book, FEEDING FRENZY. And we talked about the turmoil inside Goldman Sachs after former executive Greg Smith took quite a public parting shot in the form of an op-ed in the New York Times. (Smith’s piece has since led to a global torrent of negative press and opinion against Goldman and its brand of “pirate capitalism.”)

Goldman CEO Lloyd Blankfein

I pointed out that the heart of Smith’s accusations against Goldman’s corporate culture is the violation of customer trust, of putting profit ahead of customer interest. But even worse, I noted, is a bigger cloud hanging over Goldman, the violation of public trust. It’s now clear that Goldman played a key role in the financial crisis that precipitated the global Great Recession, especially in regard to the clever packaging of derivatives built around shaky subprime mortgage disguised as AAA-rated investments.

The American public is incredibly forgiving when the leaders of an organization express remorse and a sincere commitment to change behavior for the better. But contriteness is not the message coming out of Goldman.

Furthermore, in today’s world, transparency is an essential element of corporate social responsibility. Goldman’s corporate culture is built on impenetrable secrecy. And there’s little reason to expect the curtain to be lifted any time soon.

It’s only March, but put Goldman Sachs down as an early contender for Force for Good’s 2012 PR Disaster of the Year.

- Jon Harmon

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