Joe Bel Bruno
Wall Street Journal
March 3, 2010

Goldman Sachs Group Inc. (GS) added something new to the laundry list of financial risks it faces: unflattering attention.

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In its annual report, the New York company said “adverse publicity” could have “a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations.”

“Goldman has become one giant pinata to whack,” said Charles M. Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, adding that he couldn’t recall a previous instance where a company cited bad publicity as a risk to its business. “It’s reflective of the rather bizarre political climate in which we operate.”

Some corporate-governance experts said the move isn’t surprising given all the unwelcome attention Goldman has received since the financial crisis erupted. In July, a Rolling Stone article compared Goldman to a “great vampire squid wrapped around the face of humanity.” The phrase has been widely repeated in other publications and online, along with Chief Executive Lloyd Blankfein’s comment to a U.K. newspaper in November that the firm is doing “God’s work.”


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