Financial Malfeasance Is Stickier Than Oil (The BusinessWeek Debate Room)
by Aaron Kwittken for Bloomberg BusinessWeek
Aaron Kwittken argues that BP’s standing in the business and public spheres will bounce back faster than Goldman Sachs’ in Bloomberg BusinessWeek’s Debate Room.
Financial Malfeasance Is Stickier Than Oil
BP’s standing in the business and public spheres will bounce back faster than Goldman Sachs’. Pro or con?
PRO: BP HAD NO ILL INTENTIONS
by Aaron Kwittken, Kwittken & Co.
Both BP (BP) and Goldman Sachs engage in complex, risk-prone businesses. Both must comply with numerous regulations. But BP had a terrible accident, and Goldman had its veil pierced in public when the Securities & Exchange Commission charged it with making misleading claims about one of its products to investors. BP has been quick and steadfast in presenting trusted company representatives to address the situation. Goldman stepped out only briefly to address the economic disaster in which it had a role and from which it profited nicely. Goldman made no attempts at humility whatsoever.
BP CEO Tony Hayward has been highly visible, providing frequent updates on efforts to contain the situation. Transparency, access, and accountability have long been part of BP’s PR strategy. In 2000, BP launched its “Beyond Petroleum” campaign to demonstrate substantive changes to its mission and culture by committing to social and environmental well-being and investments in alternative energy.
Goldman believes disasters are not its responsibility, despite its willful behavior and quick acceptance of $10 billion in taxpayer TARP money. Goldman may not lose droves of clients in the near term, but the cavalier attitude of Wall Street executives and calls for financial reform will keep it in the headlines and reinforce its reputation as the Rasputin of Wall Street, which may lessen its ability to recruit talent and compete for business.
Twenty-one years after the Valdez disaster, Exxon (XOM) is thriving despite its gross mishandling of communications during an easy-to-manage, pre-Internet news-cycle period. BP’s operational issue may take longer to resolve, but its past investments in its reputation and current commitment to managing it will make the company stronger. BP will be seeking forgiveness in the hopes that soccer moms and hockey dads don’t feel like they are supporting evil by buying BP fuel.
Article Details
- Article Source: Bloomberg BusinessWeek
- Article Link: http://ht.ly/1QIIC
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