At a certain level, the Goldman Sachs Working Conditions Survey, along with the cacophony that has arisen around it across the investment banking industry, has something of an air of self-unaware Meghan Markle-style false victimhood about it. But this can’t and shouldn’t mask, at another level, the very serious issues it has – once again – brought to light about the more sinister side of the investment banking culture. And it is sinister.
Since the GS survey went viral, Credit Suisse, Citigroup and Jefferies have all contributed something to this sad saga. No doubt others will, too.
How sorry should we feel for first-year investment banking analysts working at leading global investment banks, perhaps especially at Goldman? Not very, many people would say. No matter how excruciating and unbearable the working conditions are for those that have got their feet on the first rung of the ladder. That’s a big part of the problem.
But the physical health and mental well-being of people who have to put up with brutal 100-hour working weeks to meet utterly unreasonable and unending deadlines is as vitally important here as it is in any other context.
An industry that creates a working environment that denies people a work-life balance, an environment where sleep deprivation is routine, and one that puts people under severe and constant stress speaks to a corrupt and unethical industry culture. And one that has been sustained over decades by appalling industry-level governance and an uncaring senior executive cadre – who will no doubt say they endured the same when they were at the bottom of the greasy pole. As if that is any justification.
People have said this is what people in the industry have to do for the first few years to then be able to start pulling in the big bucks. Or they say people aren’t chained to their desks. If they don’t’ like it, they can leave. Neither gets remotely close to a justification. Such working practices are simply not OK.
Investment banking is supposed to have found its Eureka cultural moment in the wake of the global financial crisis, and reformed the poor standards that underpinned the short-term, inward-looking, money-obsessed culture that drove it. Drove it not just to make money for itself above all else, but to make money at the expense of clients and in a bubble that didn’t always exclude mendacity, deception, grossly unethical behaviour and out-and-out fraud.
The glib, shallow and grossly insincere virtue-signalling emanating from some of the investment banks around this latest episode that feigns empathy with juniors is utterly repulsive. Goldman CEO David Solomon actually thinks it’s fantastic that juniors are putting 100-hour weeks because it means business is good and the firm (he) will make more money.
“In the months ahead, there are times when we’re going to feel more stretched than others, but just remember: If we all go an extra mile for our client, even when we feel that we’re reaching our limit, it can really make a difference in our performance,” he was reported as saying. Is it possible to be more out of tune and out of touch?
Does David Solomon and his ilk care about first-year juniors? I doubt they are even on the waiting list of their agendas. If they are, it’s only in the sense that it creates adverse publicity for the firm. But even then, the expectation is that this will all blow over just like it has done in previous years.
The environmental, social and governance factors that have risen to the fore today need to shine a light on investment banking governance. Organizations that condone current conditions need to be called out. Regulators need to get involved and outlaw practices that amount to modern slavery. And as for sleep deprivation, let’s just say this is an interrogation technique used by intelligence services and the military. Enough said.
Firms can sign up to any number of sets of business and governance principles, codes of business ethics, conduct codes, and modern slavery statements. Perhaps IB management hasn’t realized it but doing so is supposed to lead to altered behaviours.
Credit Suisse thinks this will all go away if they bribe people with US$20,000 and give them a pay rise. Jefferies reckons shiny new toys like a Peloton bike or an Apple product are the answer. Citigroup has said no more Zoom calls on Fridays. CEO Jane Fraser’s concerns focused less on the fact that zombie-like brain-dead overworked juniors are a serious threat to their long-term mental health; more on the fact that they won’t be any good for the bank.
The banks are treating the issue of inhumane working conditions as trivial. Like they always have. In case any IB junior is reading this in the expectation that things will change: they won’t.
They. Don’t. Care.