July 3, 2015
Financial success is everyperson’s dream. Goldman Sachs realizes the need for properfinancial management for their clients. It has emerged that mostfinancial management companies face a lot of ethical issues in theirefforts to meet their stakeholder and shareholders’ interest. Mostof the issue that faces companies includes lack of integrity, issuesof sexual harassment, and trust issues. Institutions dealing withfinances like Goldman Sachs are also vulnerable to privacy concernsof clients’ personal and financial information. As such the companymust come up with a strong policy regarding the various issues facingit.
Sometimes it becomes difficultfor companies to balance between ethical practices and doingbusiness. Goldman Sachs made significant profits at a time when thehousing bubble was bursting in the wake of global economic crises.This raised the question on ethicality of its success amid thesufferings of millions of Americans. In addition, Goldman Sachs hasbeen blamed for misleading their clients to buy stocks which areunlikely to make profit for them as long as the company makes profits(Smith, 2012).These unethical practices harm clients rather than growing themfinancially.
Goldman Sachs should ensure thatthey disclose their business dealings to the public and stakeholderson time. Having your intentions known and engaging in businessdealings fairly and openly can improve relations and prevent theoccurrence of predicaments in the future (Pendse,2012). In addition theinterest of clients should come before profits as clients are themain asset for any business.
Lack of Trust
In the financial sector, trustbetween the customers, stakeholders and the company are important.Goldman Sachs has in the past faced several allegations which tarnishthe public trust and that of investors. Such allegations have beenvery damaging to the company and there is need to address issues oftrust in the company.
One way that Goldman need to dois to formulate its work policies regarding operations, relationshipwith clients and stakeholders. There has to be a clear line betweenthe company’s goals and personal interests (Pendse, 2012). Thecompany must take action against those employees who bleach workethics and in cases where legal issues are involved, legal actionshould prevail.
Bleach of Privacy
Managing assets involvesinteraction with individuals and access to their critical dataincluding financial investment. Many are times when asset managersuse clients’ information to carry out other business on their owninterest. Personal information of clients and their financial dataare vulnerable information that needs to be protected and usedappropriately (Biktimirov, 2014).
To ensure that clients’information is safeguarded, the company not only has to tighten itssecurity systems, but should tighten its privacy policies. Employeesmust act ethically and exercise their moral values and beliefs whenhandling sensitive information. Goldman Sachs has a reputable abilityof handling private assets and must do so by all means necessary.Investing in customers’ trust will make the company makeprogressing in its endeavors of becoming a prime private assetmanagement company.
Lack of Integrity
Goldman Sachs is known as one ofthe leading banking investment and manages private properties worthtrillions of dollars. This requires concrete leadership in the firm.The culture at Goldman has been putting clients’ interest beforeanything. Individuals were promoted on basis of their ability to meetthe needs of the customers (Watkins, 2011). However, this culture hasbeen destroyed and promotion and leadership are defined by theability to make more money for the firm, even at clients’ expenses.This has resulted to undeserving people to climb up the ladder as areward for making more profits unethically.
Goldman must be ready to restoreits initial culture. It should embrace integrity and defineleadership in the right way. The clients should always come first.Calling clients ‘Muppets’ is lack of integrity (Smith, 2012).Persuading clients to buy stocks that are likely to lose is a bleachof integrity and should be discouraged by all means necessary.
In summary, Goldman Sachs hasthrived well in private asset management business. It has helped manyinvestors to manage their assets and make and grow financially.However, this has not been without ethical issues. Among them istrust from investors and the public, ethical business practices, lackof concern for employees’ interest, and bleach of privacy. Thecompany has an opportunity to run an ethical business by adoptingpolicies which advocate for ethical practices and enhance privacy andsecurity.
Biktimirov, E. N., & Cyr, D.(2013). Using Inside Job to teach business ethics. Journalof business ethics,117(1),209-219.
Pendse, S. G. (2012). Ethicalhazards: a motive, means, and opportunity approach to curbingcorporate unethical behavior. Journalof business ethics,107(3),265-279.
Smith, G. (2012 March, 14). Why IAm Leaving Goldman Sachs. Retrievedhttp://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?_r=0(Accessed July 6, 2015)
Watkins, J. P. (2011). Bankingethics and the Goldman rule. Journalof Economic Issues,45(2),363-372.