Does Your Money Support Greed?

Interesting article in the New York Times today - comparing a company that embraces social responsibility vs. one that pursues profit over customer service.  Starbucks vs. Goldman Sachs

I don't know enough about Starbucks to cheerlead for it, but I think what they're saying is what we hope for from an American business.

On Wednesday, Howard Schultz, the chairman and chief executive of Starbucks, will take the podium at his company’s annual meeting and talk about the importance of morality in business.

Yes, morality. I don’t know that he’ll use that exact word. But there can be little doubt that in recent years, especially, Schultz has been practicing a kind of moral capitalism. Profitability is important, he believes, but so is treating customers, employees and coffee growers fairly. Recently, Schultz has defined Starbucks’s mission even more broadly, creating programs that have nothing at all to do with selling coffee but are aimed at helping the country recover from the Great Recession. 

In the speech, Schultz plans to make a direct link between Starbucks’s record profits and this larger societal role the company has embraced. He will make the case that companies that earn the country’s trust will ultimately be rewarded with a higher stock price. “The value of your company is driven by your company’s values,” he plans to say. 

That's a sharp contrast to Goldman Sachs, which got a public smackdown from an executive who aired his concerns about the predatory greed as he resigned.  Bloomberg rushed to their defense.

Apparently, when Greg Smith arrived at Goldman Sachs Group Inc. (GS) almost 12 years ago, the legendary investment firm was something like the Make-A-Wish Foundation -- existing only to bring light and peace and happiness to the world. 

Smith, who was executive director and head of the firm’s U.S. equity derivatives business in Europe, the Middle East and Africa, does not go into details in his already notorious op-ed article in Wednesday’s New York Times, “Why I Am Leaving Goldman Sachs.” But one imagines Goldman bankers spending their days delivering fresh flowers to elderly shut-ins and providing shelters for abandoned cats. Serving clients was paramount. “It wasn’t just about making money,” Smith writes. “It had something to do with pride and belief in the organization.” 

That article is one of the saddest things I've ever read.  Corporate responsibility, community involvement is so far from the Wall Street pale that it's actually mocked.  There was a time when a company's reputation was its most valuable asset.  To be accused of putting profit above morals and ethics would be a slur that would have to be answered vehemently and definitively.  These days, the response is a cynical "Get your head out of the clouds, Pollyanna - that's business."

It doesn't have to be.  Research. Go to Good Company - see the company ratings.  And stop doing business with the ones that don't share your values.