As It Buffs Image, Goldman Cracks Door On Client Events
First Published Wednesday, 9th May 2012 05:55 pm - © 2012 Dow Jones
By Liz Moyer
Of Dow Jones NEWSWIRES
NEW YORK -(Dow Jones)- Goldman Sachs Group Inc.'s (GS) latest public-charm initiative may soon involve a closer view of key conferences, long-closed affairs where clients hobnob with Goldman bankers and invited speakers.
It is part of an effort to refurbish an image that became tarnished by the financial crisis and its aftermath. Goldman's top brass have said they need to do a better job explaining to the public what the company does.
Executives recently have been more available to reporters, extending all the way to Chairman and Chief Executive Lloyd Blankfein. Appearing in shirtsleeves during a CNBC interview late last month -- his first live TV interview in two years -- Blankfein said, "It occurred to us that we haven't gotten everything right with respect to how we've dealt with the public."
That interview was done from Goldman's lower Manhattan headquarters, outside the meeting rooms of a client conference focused on opportunities in growth markets overseas, one of Goldman's main themes.
Goldman holds client conferences frequently, but they usually aren't broadly discussed or open to the media. Select clients are invited and, as in the emerging-markets event, speakers are asked not to disclose what goes on, a person familiar with the matter said.
Now, Goldman is considering adding publicity to events that have broad public appeal, such as an upcoming conference this fall where established entrepreneurs will be able to meet and mingle with up-and-comers. A similar high-profile conference would have been last year's education summit done in conjunction with Stanford University, a person familiar with the matter said.
Showcasing its expertise and engagement with clients through conferences and other events "is a core part of the brand," the person said.
Subtle shifts in Goldman's public-relations strategy began more than one year ago after an extensive internal review that concluded, among other things, it should put a renewed focus on client communication.
Goldman also has reached out to shareholders. It successfully removed six proposals from this year's proxy, some of them withdrawn after negotiations with the shareholders and some rejected by the Securities and Exchange Commission.
It also agreed to name an independent lead director of its board after striking a deal with the American Federation of State, County and Municipal Employees, an influential union that had sought to split the roles of chairman and CEO.
The firm is even polishing up its online presence. Some 24,667 employees out of 32,400 are on LinkedIn, and it introduced a YouTube channel in February featuring feel-good videos of employees talking about their careers and clients talking about Goldman.
One big outward shift: Richard Siewert Jr., who goes by the name Jake, joined as the firm's new head of communications in March. Siewert is a former White House press secretary who was a senior adviser to Treasury Secretary Timothy Geithner until last year.
He took over from Lucas Van Praag, a partner who retired after guiding Goldman's communication effort for much of its 12 years as a public company. Van Praag had gained notoriety for his sharp-tongued commentary on media coverage of Goldman.
"Obviously they are making some changes," said Charles M. Elson, the director of the John L. Weinberg Center for Corporate Governance at The University of Delaware. "But the proof is in the pudding. Is the organization different?"
In recent years Goldman has wavered in its media strategy, retreating in the face of intense scrutiny over everything from its alleged client conflicts to allegations of insider trading by a former board member.
In March, a London employee quit and wrote a column in The New York Times calling the firm's culture "toxic and destructive."
Negative publicity has hurt the firm and possibly cost it business, according to Mike Mayo, a banking analyst at CSLA, who met with Blankfein recently.
"The CEO concedes that he and the company should have done a better job in handling the attention and that Goldman has probably had unknown missed opportunities as a result," Mayo said in a research note describing the meeting.
Just days before Siewert's arrival in March, a Delaware judge criticized Goldman for advising El Paso Corp. in its $21 billion sale to Kinder Morgan, a natural gas pipeline operator in which Goldman's private equity arm holds a 19% stake.
In their annual letter to shareholders earlier this year, Blankfein and President and Chief Operating Officer Gary Cohn said interviews with clients revealed they wanted Goldman to communicate more clearly the roles it takes interacting with them. About 8,000 Goldman employees have gone through training focused on the various roles the company assumes with clients.
"A central theme of the training is the need to be clear to ourselves and to our clients about the capacity in which we are acting and the responsibilities we have assumed," Goldman's shareholder letter said.
Transparency can clean up an image problem, but "what we really need to change is industry practices," said Kurt Schacht, managing director of the CFA Institute, which is holding its annual meeting this week around the theme "Rebuilding Trust In The Industry."
-By Liz Moyer, Dow Jones Newswires; 212-416-2512; email@example.com; Twitter: @lizmoyer