Greg Smith, executive director and head of Goldman Sachs' United States equity derivatives business in Europe, the Middle East and Africa has announced his resignation today. He has published his reasons for leaving the firm in a controversial article in the New York Times. He makes some extreme distinctions about how the firm used to look when he joined many years ago vs. what it looks like today, addressing specifically the degrading moral fiber of the investment giant's culture.
Below Smith comments on the culture as a key ingredient to success for Goldman Sachs and what distinguished them to their clientele:
"The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization."
"I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years."
He claims the erosion of morals at the firm are what led to his decision to leave, he explains further in his letter:
"I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work."
He has also seen a decline in the availability of qualified, competent, visionary leaders at the firm. Smith comments on how they don't promote the kind of leadership that inspires moral character at the firm any longer:
"Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence."
"It makes me ill how callously people talk about ripping their clients off."
It's all just about making money claims Smith. It is no longer about keeping clients informed and helping them make investments that work for their individual needs. I commend him for his stance and can relate to his contempt for todays business climates in general. The world we live in has become devoid of moral fiber, people only speak of ethics they don't display it in their actions.
I am with Smith on this topic, large corporations are all about public relations campaigns that equate highly to verbal diarrhea, rather than speaking to what the company adheres to moralistically. I would be proud to have this man represent my investments. He's a no bull shit character in a world filled with yes-men and underhanded businessmen.
I think people always like it when somebody calls it quits and says, "take this job and shove it", especially when it's published in the New York Times. But Smith has a good point and presents a good argument for his accusations against the firm. Perhaps this will be good cause for the directors at Goldman Sachs to take another look at their operations and launch some type of reform efforts. The letter is a real stinger.
Let's see what Twitter folks had to say:
Goldman Sachs executive Greg Smith resigns in dramatic fashion: via a blistering op-ed in the New York Times....