Reputation-driven bonuses

May 31, 2013

Reputation-driven bonuses

bonusHow is this for a headline from Bloomberg: Goldman Sachs Links Bonuses to Protecting Firm Reputation. I like it. Apparently Goldman Sachs is reviewing employees’ efforts annually to protect its reputation and build back clients’ trust. Makes total sense to me as a reputation observer.

In May, the company issued a report titled the “Business Standards Committee Impact Report” which laid out 39 recommendations. The report says it was the most extensive review of  the firm’s business standards in its 144 years.  The CEO, Lloyd Blankfein, led 23 three-hour sessions in 2011 and 2012 with partners and managing directors on personal accountability and included a case study about communications within the firm and with clients, according to the report. It  represented “tens  of  thousands  of  hours  of  discussion,  analysis,  planning,  execution,  and,  importantly, training and professional development which, alone, totaled approximately 100,000 hours.  The BSC held 17  formal committee meetings.   The Board Committee overseeing  the BSC met 13 times.  The  BSC  Implementation  Oversight  Group  held  11  meetings  and  made  five presentations to the Board of Directors.  It also met three times with a separate subcommittee of the  Board’s  Corporate  Governance  and  Nominating  Committee  which  provided  ongoing oversight of the BSC implementation.” They also identified three themes that reached across all the recommendations and one of them was “reputational sensitivity and awareness and its importance in everything we do.”

Because I regularly report on how companies recover from reputaional loss, I thought it was important to readers to hear about how one company was finding its way after its reputation was hurt. This report probably represents a good roadmap for other companies that want to strengthen their business practices and reputation. It is also important to note that the CEO has played a major role in getting the committee’s findings infused into the organization.

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Leslie Gaines-Ross
Leslie Gaines-Ross
lesliegainesross@gmail.com

As Weber Shandwick’s Chief Reputation Strategist, I focus on the ever changing world of reputation. For the past 25 years, I have relentlessly observed, researched and commented on the rise and fall of reputations.

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