For more than two years, Goldman Sachs’ reputation has been under fire for its alleged role in the financial crisis. On August 9, 2012, the U.S. Justice Department (DOJ) announced it won’t prosecute Goldman Sachs.

Goldman Sachs’ spokesman said, “We are pleased that this matter is behind us.”

The DOJ said it “determined that, based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report” issued by the U.S. Senate Investigations Subcommittee in April 2011.

In response to the DOJ’s announcement, U. S. Senator Carl Levin, one of the authors of the bipartisan report, said in a statement: “Whether the decision by the Department of Justice is the product of weak laws or weak enforcement, Goldman Sachs’ actions were deceptive and immoral.”

Levin said the Senate Subcommittee’s investigation of the financial crisis “revealed wrong doing and failures among mortgage lenders, banking regulators, credit rating agencies and investment banks.”

Singling out Goldman Sachs for misleading its investors — selling them securities Goldman itself was betting against — Levin said, “Its actions did immense harm to its clients, and helped create the financial crisis that nearly plunged us into a second Great Depression.” He advocated regulators implement Dodd-Frank with rules that do not water it down, and that they enforce those rules with vigor.”

Proving Goldman intended to defraud clients is a necessary standard in a criminal case. So how will Dodd-Frank’s implementation of rules get at ethical consequences of actions that aren’t classified as criminal?

What will it put into place to deal with transactions that have a high likelihood of deceiving, misleading or harming clients related to intended or unintended consequences? How will Dodd-Frank get at authenticity of culture — holding institutions accountable for following their own stated values and principles?

Goldman, for example, professes to follow its Business Principles  as a context for day-to-day decisions. The first principle is “Our Clients’ interests always come first.”  After Levin’s subcommittee hearings, Goldman CEO Lloyd Blankfein created a Business Standards Committee to review its  business practices and reaffirm the principles.

Greg Smith, a former employee who resigned publicly from Goldman Sachs in March 2012, called the firm’s culture toxic, disputing anything had changed. Whether Smith had his own agenda for going public or legitimate insider evidence, it just fuels questions about how companies (and in this case Goldman) live up to the stated principles they say shape their culture.

Goldman leaders would be wise not to believe their own press statement that “this matter is behind us.” A company’s reputation is won or lost by the sustainable health of its culture, how values and principles consistently shape actions.

The challenge for Goldman, and any company that has experienced crises, is to recognize the wisdom of applying to reputation management a comment made by Alfred Einstein.

Einstein said, “you cannot solve a problem with the mind that created it.”

Gael O’Brien is a Business Ethics Magazine columnist. Gael is a consultant, executive coach, and presenter focused on building leadership, trust, and reputation. She publishes the The Week in Ethics, where this column originally appeared.

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