Code of Ethics of Goldman Sachs’

TitleThe effectiveness of Goldman Sachs reckon of morals Date17 October 2012 ToCEO, Lloyd C. Blankfein Introduction The cypher of moral philosophyis adopted by organizations to assist members in understanding the difference between right and wrong and in applying that understanding to their decisions. An effective inscribe of ethics should as well help to delineate the proper procedures to determine whether a trespass of the label of ethics has occurred and, if so, what remedies should be imposed.After reviewing the alliances code of ethics, we entrap that it has well established the concept of pipeline ethics and the societys objective, and also several kinds of encouragement to promote the respectable barter behavior effectively. The partnerships code of ethics, however, is non practical decent for implementation as the content is too general and vague, and there be not enough guidelines and regulations to help the staff to detect or assoil the ethical paying b acks. What makes the Code of Ethics Effective According to the code of ethics, the employees atomic number 18 encouraged to expose any misconducts or unethical issues in the company.The company has also established a certain department, the Global Compliance character or Legal Department, as the platform for reporting any violation of the code, and it also helps the employees to identify and escalate potential ethical issues. Meanwhile, the company has also set up the Non-Retaliation Policy which strictly prohibits the retaliation against anyone who reports in wide-cut faith a possible violation of the Code. Under those policies and procedures, the employees will olfactory perception easy to voice out if they found something going in the wrong track.What makes the Code of Ethics Ineffective The code of ethics of the company consists a large portion of text about the general code of ethics which is applied to every individual unit, but it emphasis less on the code for coronation banking industry, such as insider dealing, money wash, outside business activities and relationship and other potential contravention of stake, and staffs face-to-face financial affairs. Without any detailed case illustration for each of the detail issues, employees may feel hard to follow the code.This imposes potential jeopardys for employees to make unethical trans motions unknowingly. Moreover, the code does not strictly restrict the actions of personal conflicts of interest but are allowed if approved by the firm that may get out the independence of professional. Audit firm prohibited any conflicts of interest which had been utter clearly on the statement. Auditors, for example, are prohibited to accept any favors which bodge the professional. Another weakness of the code is that it omits the implementation and administration policies.There are no content how the company supervises the implementation of the code, what the company do if the code is found to be not effe ctive, how long the company reviews the code and so on. Also, the code illustrates that the company take a passive role on discovering the ethical issues. The code requires employees take their own initiatives to report any unethical issues. However, it is not guaranteed that all employees are going to follow the code. There is a risk of undisclosed misconduct by employees if the company does not investigate in it. Improvement The code of ethics specifically focuses on banking industry.Take Bank of the Statess code as an example. Although it is impossible to define every action that could be reasonably interpreted as a conflict of interest, company also defines several potential conflicts of interest as examples with a picture description so that everyone can have an idea on conflict of interest. In addition, the code has stated employees should conduct their financial affairs responsibly and keep their business expenses in revisal. The bank is prohibited money laundering and econ omic sanctions which have also mentioned in the code. Those are helpful to house a clear picture to staff on what they should conduct.It is veracious institutionalize to have the way reporting the misconduct issue, but company is compose played as passive role. And also it may be biases if the issue is examined by internal staff from other departments. To be independence, establishing Committees involved foreign individual or professional to monitor and investigate the misconducts and unethical issues, and the committees may directly notify the Board of Director. Companys code of ethics can be introduced during the orientation. Each new employee may be quest to complete a set of ethical questions after the introduction to hear everyone understand this code.The failure may be requested to attend another(prenominal) ethical course to recap the important sections. One of global investment bank, Greenhill & Co holds information and training sessions to promote compliance with the laws, rules and regulations that affect their business. induction It is appreciated that the company put effort on setting the code of ethics. The above suggestions are given to your kindly consideration as it is good for the company to review the code once again in order to maintain high standard of integrity.