Wayne Watson

In Goldman’s annual report, the New York based 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."

The unusual disclosure in a 12 page section of "risk factors" ranging from rocky fnancial markets to natural disasters is the latest sign of Goldman's whipping-boy status among rivals, lawmakers and angry Americans because of the frm's giant profts.

"Goldman has become one giant piñata 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 refective of the rather bizarre political climate in which we operate."

Some corporate-governance experts said the move is not surprising given all the unwelcome attention Goldman has received since the fnancial 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 frm is doing "God's work."

"They've determined that these stories could have a material impact on their stock price, and view it as something they need to make investors aware," said Michael Ryan, president of advisory frm Proxy Governance.

Goldman has long viewed its communications department as a riskrelated function, meaning executives realize that a misstep in how it deals with the media or an issue could cause unnecessary damage to the company's image or brand name. As a result, Goldman's communications chief is heavily  involved with  top executives and the frm's inner workings.

As criticism of Goldman intensifed, the frm has aggressively responded to stories it views as false or exaggerated but this approach has drawn mixed reviews. In its fling last week, the frm took another swipe at fault-fnding coverage of Goldman, while acknowledging that the attention could rattle employees and customers of the frm

Press coverage and other public statements that assert some form of wrongdoing, regardless of the factual basis for the assertions being made, often results in some type of negative results to include investigations by regulators, legislators and law enforcement offcials or in lawsuits. 

Some experts predicted that other fnancial frms could invoke bad publicity as a risk factor  in  their securities flings. A major consideration in the uncertain fnancial times.

Goldman also said its board of directors has rejected demands from some shareholders that the company investigate excessive compensation. It has been suggested Goldman take steps to recoup some of the awards given to executives.