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They Underestimate Integrity

(updated 2020)

Integrity is defined as adherence to moral and ethical principles; soundness of moral character; honesty or the state of being whole and undiminished. It is an underlying principal required since the founding of America and remains our lifeblood. It generates the world’s expectation of an industry leader, an incubator for innovation, and center of respect. Who are we without integrity?

Crisis and The Lack of Integrity
The 2008 financial crisis was most unusual in that markets that were previously thought to be stable, crashed for the first time. Also, a fully interdependent global economy meant an extensive global impact. This was perhaps the most embarrassing crisis in recent history as executive after executive revealed a lack of standards, a lack of morals, a lack of forethought, a lack of competence, or a lack of concern as one of the major reasons for the role that they or their company played in the system failure.

Integrity is one of those things that make our country desirable. In a free world, you worship as you please and move about at will; but there are ground rules: we have morals and they are upheld.

Without the promise to uphold our agreed upon morals, society disintegrates into barbarism. So we found a pattern of loopholes that were exploited as opposed to closed or avoided:  
  • The highly-regulated banking industry agrees not to misinform the public and to deal fairly when lending; so the non-regulated mortgage brokers did the dirty work, mis-informed borrowers, lent beyond the borrower’s repayment capacity, and created unsound mortgages. What happened to the promise? 
  • Let’s not forget the derivatives brokers who had not taken responsibility to consider nor monitor the risks of each underlying instrument and the potential interactive risks created by a derivative instrument. Where was the standard to be upheld?

Culture and Integrity
Despite our differences, as a consumer we generally agree that we want a fair representation of the politician, the product, the service, or the system that we are buying into. It is our right-to-know and we are given the option to say no. If we expect this in our personal lives, why does this not necessarily translate to our work lives? The moral is: do unto others as you wish done unto you. Religion is an option; moral behavior is not.

As Greg Smith, former employee of Goldman Sachs explained:

“It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization.”

Somewhere along the line integrity was lost. For a civilized culture to persist integrity must be sustained.

”The negative energy of one individual’s interpretation of the solution can be the driver of negative results. Likewise, the positive actions of one optimistic person can drive positive results.”

- Five Actions for Success

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