Marc Cooper Shares How Integrity Offers a Competitive Advantage for Sustained Success in Investment Banking
Beyond Gordon Gekko: The Business Case For Integrity
by CEO Marc Cooper
From Margin Call to The Big Short, bankers are often portrayed in films as strivers, willing to bend any rule to land the big trade or deal. Gordon Gekko, the “greed is good” apex predator immortalized in the late-1980s epic Wall Street, is the archetype of cold calculation.
I’ve certainly met plenty of alpha bankers in the mergers and acquisitions (M&A) world. Yet in my experience, the most successful investment bankers, those who reach the summit of the profession and stay there, don’t really fit the image of ruthless sharks.
In fact, the whole notion that nice bankers finish last on Wall Street is largely a myth. Integrity, empathy and decency aren’t just admirable human traits—they’re a crucial competitive edge for long-term success.
Mergers and divestitures are high-stakes undertakings, with massive financial, operational and reputational risks for chief executive officers and their boards. In some cases, the future of an entire enterprise, not to mention the livelihoods of its employees, hangs in the balance.
Business leaders certainly seek laser-sharp bankers with industry expertise and a nuanced understanding of the strategic logic behind a merger, its potential synergies and post-transaction challenges.
What they really need is trust in the impartiality of the advice they’re receiving. When so much is on the line, CEOs want bankers with a sturdy ethical foundation, real character and even a little bit of courage.
If an acquirer is about to pay an absurdly high price for an asset, or a merger is flawed in conception and likely to fail, the best investment bankers candidly say so—even if that means losing out on millions of dollars in investment banking fees. Quality M&A advisory work is about telling clients what they need to hear, not what they’d like to hear.
Granted, there are investment bankers out there who have no qualms about coloring their advice in pursuit of personal financial gain. Some even land signature deals that win them flattering business media coverage. That’s not a viable long-term career strategy. Dealmakers with a reputation for leaving a trail of failed mergers and shareholder wealth destruction in their wake don’t last long in this business.
When I’m interviewing job candidates, entry-level bankers and partners alike, I screen for smart, ambitious and self-motivated talent. I also look for much more—basic decency, sound character, even goodness. Well-rounded financial professionals, who treat colleagues with respect and contribute back to their community, tend to rank high in emotional intelligence. The ability to perceive, express and regulate emotions allows bankers to better navigate high-stress situations and make sound decisions.
These traits also improve teamwork and collaboration within financial firms, leading to better overall performance. I have no tolerance for swaggering senior bankers running roughshod over younger colleagues and support staff. That master-of-the-universe mentality is very corrosive to morale.
At the investment bank that I run, I insist that all of our employees treat each other with mutual respect and professional courtesy. When everyone feels valued, good business outcomes tend to follow. At the best professional service firms, partners and senior managers work harmoniously with support staff in compliance, technology, marketing and corporate communications.
Senior dealmakers need to treat junior bankers with the same respect they expect to receive. These up-and-comers do the heavy lifting on complex M&A transactions. Without them, partners would be in the office until 1:00 a.m. ahead of crucial deadlines.
Bankers who naturally treat colleagues and clients with empathy, who instinctively sense anxiousness and uncertainty in others and who excel at interacting with senior business leaders are true trusted advisors. That—along with deep industry expertise and being an exceptional M&A practitioner—are the essential ingredients for long-term client loyalty.
Doing the right thing is a noble way to live. I highly recommend it. More to the point, it’s a smart business strategy, even in a hypercompetitive arena like Wall Street.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. This article originally appeared on Forbes.com.
