Communicating the Goldman Sachs Way

Inquiring minds have often wondered: How should a Goldman Sachs (GS) employee talk to a financial naif? How should he or she handle rumors (even the ones that aren't true)? And how should Goldman personnel, who the bank paid an average of $430,700 each last year, compose a personal letter? The answers to these questions, and others, are explained in Goldman's own Emily Postian etiquette primer, which begins on page 2,501 in the footnotes to the financial crisis report released on Apr. 13 by the Senate Permanent Subcommittee on Investigations. While many successful companies have employee guidelines, Goldman's United States Policies for the Preparation, Supervision, Distribution and Retention of Written And Electronic Communications, published in 2001, is so intricate that its title has two different styles for the word "and." To help outsiders understand what makes Goldman so great, we've categorized these employee requirements into easy-to-remember axioms.

Rule 1: Don't Ever Make Us Look Bad. "No matter what you are communicating to the public, your words reflect on the reputation of the firm. ... The firm, therefore, requires that your communication reflect the high standards of the firm, not only in what you say, but also in the way you say it."

Rule 2: Talk Slowly to Stupid People. "The level of detail or explanation necessary to make a communication clear, accurate, and understandable will depend, in part, on the breadth and sophistication of the intended audience. ... The lack of financial sophistication of the recipient will often warrant a more detailed presentation."

Rule 3: You May Be Barbarians, But Please Keep It to Yourselves. "Of course, your communications should never contain obscene, offensive, or otherwise inappropriate, unprofessional, or unlawful language. Remember, that you do not control and you cannot always predict who the reader will be."

Rule 4: We Only Trust You With Things We Don't Care About. "Casual correspondence, thank you notes, confirmations or schedules for meetings, invitations, and other correspondence that does not relate to business does not require approval."

Rule 5: Shut Up at All Times. "It is the policy of the firm to make no comment on rumors whatsoever, even to deny rumors you believe to be untrue."

Rule 6: Guys, This Isn't Lehman; Don't Just Make Stuff Up. "Prior to recommending that a customer purchase, sell or exchange any security, salespeople must have reasonable grounds for believing that the recommendation is suitable."

Rule 7: Don't Forget, We're Always Watching You. "All sales correspondence from or to employees working from home offices must be routed through regional offices for purposes of review, approval, distribution and retention."

Rule 8: No, Seriously, We're Always Watching You. "Each individual's correspondence must be sampled no less often than annually."

Rule 9: We Even Have Rules About Mass E-Mails. "'To All' memos ... must be approved as described in the section entitled 'Firmwide Memoranda' in the Employee Handbook."

Rule 10: Whatever You Say, Say It This Way. "Avoid superlatives and exaggerations." "Write using standard, formal written language." "Communicate succinctly. Stay strictly to the topic of your communication. Do not include any gratuitous comments."

Rule 11: Just Don't Call It a Recommendation. "Firm employees frequently provide so-called 'trade ideas' to multiple recipients. Such trade ideas are designed to help clients take advantage of market conditions and intelligence, but are not intended to be specific buy/sell recommendations."

Rule 12: Don't Ever Forget, We're Always Watching You. "Correspondence [directed to registered representatives involved in the sale of securities] will be opened by, or in the presence of, an authorized individual to identify any possible complaints."

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