Trust Is Everything

By Tom Ehrich

When a Goldman Sachs manager issued a scathing denunciation of the investing banking giant for a “toxic and destructive” culture of preying on its own clients in order to maximize profits (and thus bonuses), the firm issued an immediate denial.

Problem is: Clients know better. They said so. Wall Street knows better. Goldman’s own employees know better. The knee-jerk denial missed an opportunity and probably hurt the company far more than a disgruntled employee’s whistle-blowing.

In the world of finance, you see — indeed, in the world beyond deal-making in riverfront suites and limousines — trust is everything. Without trust, contracts fail, negotiations never lead to deals, employees steal, clients renege, teams refuse to collaborate, pricing collapses, stock values prove meaningless, and chaos ensues.

Yes, a few will always find a way to benefit from this ethical swamp. But the enterprise cannot endure, and society eventually recoils and punishes.

By not taking the whistle-blower’s claims seriously and considering the moment ripe for self-examination, Goldman’s smug bosses have guaranteed their firm a world of hurt. A wiser board would fire them immediately. Not because they perpetuated a system that preceded them, but because they denied realities that are out in the open now, thus crippling trust in their judgment and corroding trust in their firm.

They teach the so-called “Tylenol Defense” in business schools — if tampering is detected, pull product off shelves, redo packaging, go public, tell it all, tell it immediately — but few seem to buy it. Politicians deny their affairs and cushy deals. University officials allow athletes to evade normal accountability. Church leaders ignore metrics, pursue their small wars and deny any need to change. Families spend money they don’t have.

When reality intrudes, the cry goes up, “Not on my watch!” No truth-seeing on my watch. No truth-telling on my watch. What could be a time of cleansing and learning becomes another mile into the ethical swamp.

The future, in my opinion, belongs not to experts who are smarter than everyone, but to those who see reality, tell the truth about it, and lead people into self-examination and repentance.