Further evidence of the existence of a benign deity came in the back of a cab taking me to review the newspapers for the Sunday morning BBC Radio programme, Broadcasting House. On the front of the Business section of the Sunday Times was a splash story that I could be expected to know something about.
Under the headline: “Revealed: the cosy deals that taint Goldman Sachs”, the Insight team rehearsed allegations that the London operation of the banking behemoth had “engaged in some of the questionable business practices that have shamed Wall Street”.
In the event, my host, Joan Bakewell, wasn’t as riveted by the machinations of a global investment bank as by what car Jesus might drive. A conspiracy theorist would no doubt speculate that Bakewell’s Olympian mind immediately defaulted to the implications that this could have on the career of BBC chairman Gavyn Davies – formerly chief economist of Goldman Sachs.
Alas, the truth is much more prosaic. The investment banks that have marched out of the US may be the engines of local economies that no longer rely on manufacturing – such as the UK’s – but they are, outside City circles, viewed as impenetrable subject matter.
This is why stories about them are invariably confined to the gargantuan bonuses of their senior officers during the good times and to redundancy levels during the less good times. And it has to be said that it has suited many such global banks to confine the public presentation of themselves to how clever and rich they are.
This has led to an indolent style in their communications practices, with their public relations people peddling ingratiating lines and, occasionally, advocacy for whichever side of a takeover deal their bank happens to be on.
As it happens, the communications style of Goldman Sachs has consistently been more sophisticated than that. Perhaps its communications culture was prescribed by Davies, who made himself the tele-economist of choice when he had his day job there.
Whenever a broadcaster needed an economic view, there was the bearded sage of Fleet Street (Goldman occupies the old offices of the Daily Telegraph) sounding like he ran the British economy – as many would claim he did, given his proximity to the New Labour camp.
Then there has been the intuitive communications talent of Lucas van Praag, now a managing director of Goldman Sachs. A former City editor, who had just moved into commercial life and who had never suffered from a low appreciation of his own importance, is said to have phoned van Praag to suggest lunch. Van Praag earthily replied: “But you’re not important any more.”
The story may be apocryphal, but it’s still indicative of his reputation. Into this hothouse environment is walking a new European head of corporate communications, one Rory Godson.
The sharp-eyed will note at once that Godson edited The Sunday Times Business section, which he abruptly left last week, as Insight’s story was about to break. Sadly, it seems that these circumstances have less to do with conspiracy than with good, old-fashioned journalistic politics.
Godson should have quit his Sunday Times chair as soon as he was appointed to the Goldman Sachs PR job – a view that he doubtless shares. But the question now arises as to how he maintains the relatively high standards of Goldman Sachs’ communications efforts, in a manner that addresses the kind of story that his old paper has just run.
As readers of this column may well recall, there are bankers being investigated on Wall Street over inconsistencies of investment advice and conflicts of interest for whom the word “spiv” would be flattering. They apparently prosper – not only in their banks, but in regulatory positions too – despite President George W Bush’s lofty promise to bring those who tarnish corporate America to book.
Goldman Sachs does not want to turn Fleet Street into Wall Street. If it is to maintain its reputation in the UK and Europe, it needs to build on its relatively strong tradition of communications, by tackling openly the kind of professional practices of which it is accused, whether or not there is any substance in such accusations.
Happily for me, given the title of my new book, one of the practices currently under the regulatory spotlight is “spinning”. This is the mutually-enriching practice among bankers on Wall Street of providing privileged access to information about which public flotations are likely to rocket in value in the after-market.
Spinning is not illegal in the UK, but the Financial Services Authority (FSA) is said to be looking at it. Frankly, on past performance, the FSA cannot be expected to make much progress without assistance – and it will need all the help it can get on this and other financial regulatory matters.
Goldman Sachs should be in the vanguard of that development, engineering regulation that strikes a balance between libertarian “caveat emptor” principles and overweening regulation. It should lead the debate, not respond to it. It should also be conducting that debate transparently and in public.
That’s the kind of communications challenge that Goldman Sachs faces. As it happens, it also presents an opportunity to differentiate itself from those banks that talk about bonuses on the way up the market and redundancies on the way down.
George Pitcher is a partner at communications management consultancy Luther Pendragon. His book, The Death of Spin, is published by Wiley at £16.99 and is available at bookshops or at wileyeurope.com