Doing Business in the New Economy: Restoring Trust
"We are painfully conscious of the importance in being a force for good."
Goldman Sachs, July 2009
It’s been a tough year to do business on Wall Street. The financial industry is suffering not only from radical changes in the marketplace, but a public image crisis of monumental proportions. Firms that serve the bottom line and struggle to right the sinking ship are at risk of harsh political and public criticism.
Trust in business has a direct impact on revenues by attracting both customers and investment. It will take a long-time before Wall Street gains the trust of the American and global public again. Firms can begin to re-create trust in the marketplace by developing mandated internal and external ethics programs.
In February 2009, Goldman Sachs’ CEO Lloyd Blankfein, told the Financial Times,
“Financial institutions have an obligation to the broader financial system.”
The clear meaning of this statement is that “we” (the business community) are all in this together. If one firm operates in an ethics vacuum, the whole industry suffers. Understanding that the free market system depends on “ethical self-regulation” is the glue that will put the broken markets back together.
Blankfein also stated, “We depend on a healthy, well-functioning system, but we failed to raise enough questions about whether some of the trends and practices that had become commonplace really served the public’s long-term interests.”
To bring that “healthy, well-functioning system” back to life, we need to ask honest questions about market practices. One of the crucial business questions firms need to ask is: Are the products and services we provide creating something of value for the public and the economy’s long-term interests?
Creating value products and services that enhance people’s lives rather than destroy them is the first step to rebuilding a healthy economic system.
Ethics are more than words on a paper or in press releases. Building trust and integrity begins with industry recognition of its obligation to the common good and becoming a proactive and key player in establishing that common good through internal and external ethics mandates.
The firms that recognize these principles and actively create programs that incorporate long-term public interest into the bottom line will emerge as the Leaders of the New Economy.
GoodB columnist Ressler on the Street