Dalio Defends Bridgewater Taping Policy

Dec 12 2014 | 1:21pm ET

Bridgewater Associates founder Ray Dalio says that one of the more controversial aspects of his “radical transparency” program has benefits beyond keeping people honest.

The hedge fund—the world’s largest—records employees’ conversations, which are then played for their review. The practice helps enforce one of Dalio’s dearly-held principles: “You can’t talk behind anybody’s back,” Dalio said at yesterday’s DealBook conference in New York. “You know there’s real honesty.”

But that’s not the only plus to the system, Dalio said. While his lawyers said the plan to record employee conversations was “absolutely crazy,” Dalio said the existence of the tapes has helped to dissuade the filing of frivolous lawsuits against it. He claimed that Bridgewater has been hit with only three such suits in its nearly 40-year history.

Nor, he said, did he fear building a trove of evidence that could be used against the firm. “If we’re doing something wrong, I want to know about it,” Dalio told the conference.

Much of Bridgewater’s culture has come in for criticism, and Dalio himself has acknowledged that the firm isn’t right for everyone. But he insisted that employees weren’t hurt by the negative comments about them they might hear, or rather, if they were, it was simply a “fight or flight response.”

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