Clear Communication and Honesty from Goldman Sachs
Today it was announced that the seven highest ranking executives at Goldman Sachs will not be taking their bonuses this year. It’s an good move and will generate some positive publicity for the firm, especially because they announced their decision before other banks and before bonus season starts in earnest. Likewise, such a move was almost a necessity given the potential for public outcry if multiple executives were receiving bonuses worth over $50 million each after the company was one of the 9 banks that shared a $150 billion cash injection earlier this fall.
This move reminds me of some of that activity that Linda Lee Davies, Nada and I found in our recent book Leading for Success. One of the seven sides of great leaders we identified was ‘finding ways through.’ In the chapter dedicated to that subject, we said:
When shareholders demand profit and success, when other competing companies perhaps adopt more corrupt practices rather than lose the business, the leader is in a corner. Choices have to be made between cost and caring. There is no one solution as each situation varies so much but one common denominator in achieving success must be the clear communication and honesty of the leader themselves. If it is clear what pressures are on them and the organization, staff will be more able to assist with the best ethical compromise possible or indeed be able to underpin sticking it out on the highest moral ground possible. They may also understand if more shareholder pressures upset investment within.
These executives were reported to have waived their bonuses voluntarily–to make such a decision they certainly needed to be honest about their company’s situation, and would have had to clearly communicate with each other and with many others in the organization to coordinate the announcement. Their move makes Goldman once again a leader of the pack, and will hopefully motivate other banks to make similar sensible choices regarding how they spend, or rather don’t spend, their bailout money.
