Thursday, 19 November 2009

Sorry seems to be the hardest word. Especially when it costs $500 million

Readers of HR Case Studies will be familiar with the strength of emotion that the mention of Goldman Sachs seems to evoke in the public on both sides of the Atlantic.

Comments about “doing God’s work” and hectoring the masses to "tolerate the inequality (of bankers’ bonuses) as a way to achieve greater prosperity for all” were inevitably destined to raise the temperature of the debate over salary and bonus levels in the investment bank.

However, displaying a surprising change of heart, the bank issued a long-overdue apology yesterday for its role in the global financial crisis and announced a $500 million (£299 million) pledge to small businesses.

Lloyd Blankfein, the chief executive of the bank, (and the guy who appears to have a divine mandate) said:
“We participated in things that were clearly wrong and have reason to regret ... We apologise.”
 He added that the bank was “very concerned” about the criticism it received for accepting a $10 billion bailout, only to return quickly to paying multimillion-dollar bonuses.

On Monday, members of US Trade Unions protested outside the bank’s Washington office, calling for the bank to donate its (wait for it . . . $23 billion!!) bonus pool to homeowners facing eviction.

The bank said yesterday that it would put aside $500 million for donations, loans and grants to community development organisations.

Times Online: Goldman boss says sorry and pledges cash

  • “Our reputation is very important to us,” said Lloyd Blankfein yesterday. In the light of his comment, do you see the apology as a praiseworthy altruistic gesture, or just good image management?


  1. How does a castigated transgressor ever have an apology accepted (please excuse the pun) in good faith?

    Guess whatever Mr Blankfein does or doesn’t do will be criticised. What’s that old expression (that my hubby often uses) oh yes – can’t do right for doing wrong.

    But at the end of the day he’s a business man and whatever his motives it can do nothing but make good business sense. It certainly keeps people talking about him and his organisation.


  2. EBTG:

    I tend to agree that there's little (or nothing!) that Goldman Sachs can do to restore their image in the eyes of certain sectors of the population.

    In the scheme of things, to put aside $500 million from a potential bonus pot of $23 billion will probably seem a small sacrifice, and therefore one that's worth making!