Newspaper article The Evening Standard (London, England)

Golden Rules That Must Be on Goldman's Conscience

Newspaper article The Evening Standard (London, England)

Golden Rules That Must Be on Goldman's Conscience

Article excerpt

THE shock at Goldman Sachs was palpable. John Whitehead, the John Whitehead, had hit out at the size of the pay packets enjoyed by staff at his former firm. In an interview, Whitehead said of Wall Street: "I'm appalled at the salaries." They were "shocking".

Turning on Goldman, he said: "They're the leaders in this outrageous increase."

Whitehead criticised Goldman partners who got shares when the bank floated in 1999 and have since been paid substantial sums. "Having been treated so well one would think they would say, 'We really don't need these salaries. We have this stock and our incentive should be to make the stock go up instead of take the cash out.'" He told Bloomberg he'd tried unsuccessfully to persuade the bank to give $1 billion of its revenues to charity.

A former co-chair of Goldman, Whitehead left in 1984 and is now 85 so it's possible to claim, as many did, that he's an old man, out of touch with the modern era. When I put this to a senior Goldman executive, he shook his head.

Whitehead, he said, is Goldman Sachs.

He was there 37 years and steered the organisation through a dramatic expansion.

But most important, he was responsible for the bank's "principles".

To understand what makes Goldman so successful and different you have to know the 14 principles every recruit is expected to follow. Here they are, word for wor


1. Our clients' interests always come first. Our experience shows that if we serve our clients well, our own success will follow..

2. Our assets are our people, capital and reputation. If any of these is ever diminished, the last is the most difficult to restore. We are dedicated to complying fully with the letter and spirit of the laws, rules and ethical principles that govern us. Our continued success depends upon unswerving adherence to this standard..

3. Our goal is to provide superior returns to our shareholders. Profitability is critical to achieving superior returns, building our capital, and attracting and keeping our best people. Significant employee stock ownership aligns the interests of our employees and our shareholders..

4. We take great pride in the professional quality of our work. We have an uncompromising determination to achieve excellence in everything we undertake.

Though we may be involved in a wide variety and heavy volume of activity, we would, if it came to a choice, rather be best than biggest..

5. We stress creativity and imagination in everything we do. While recognising that the old way may still be the best way, we constantly strive to find a better solution to a client's problems.

We pride ourselves on having pioneered many of the practices and techniques that have become standard in the industry..

6. …

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