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Goldman Sachs defies opinion

In a fortnightly series, Electric Airwaves MD Andrew Caesar-Gordon analyses how one corporate message has played out through the media.

One does have to wonder just how wilfully obtuse Goldman Sachs is being about its reputation.

Anthony Jenkins, the new CEO at Barclays, won praise last week for informing staff that 'there is no choice between integrity and profit in this business' and that those who did not like the newly stated values should leave.

The Financial Times was leading with how Goldman Sachs was planning to delay paying UK staff their bonuses until after the top rate of tax fell to 45 per cent in April. Cue media and political firestorm.

The Governor of the Bank of England called it 'clumsy and lacking in care and attention ... knowing that this must have an impact on the rest of society ... suffering the consequences of the financial crisis'; the Treasury put in a call to express its displeasure; even the CEO of the British Bankers Association said 'it clearly doesn't restore trust'.

The original FT article said that a number of banks were planning such a move. But it was only Goldman Sachs that suffered the media and political attacks.

Does it understand why? How failure to combat persistent negative comment has built a popular narrative that makes it the lightning rod for all criticism of investment banks?

From 'vampire squid' to 'doing God's work' to former executive Greg Smith's 'toxic and destructive' claims, Goldman Sachs is at best tone deaf to criticism. At worst it really doesn't care about the huge debate in the UK over corporations paying a 'fair' amount of tax or demonstrating any responsibility or remorse for behaviours pre-2008.

You could argue Goldman Sachs need not care. Poor reputation has coincided with a 53 per cent increase in profits compared with a year ago. And yet, three days later, it did climb down. Although typically, it never officially commented on the story.

I spoke to a FTSE 100 comms director who after the Smith resignation letter told me his CFO had said they would not be using Goldman Sachs again for at least a couple of years. I can't see him changing his mind yet.

Takeaway Tips

Issues management is an ongoing process of aligning the behaviour of an organisation with stakeholder expectations. For comms professionals, that can involve persuading the organisation to change policies and behaviours or communicating to change expectations. Goldman Sachs is doing neither.

B2B organisations should care about their reputation. It is poor reputation that has facilitated a Tory Chancellor's new banking taxes and levies.

Maybe it is beginning to dawn on Goldman Sachs that the power of social media to aggregate and amplify opinion draws in regulators and decision makers.

Read more Message in the Media articles here


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