The Power of Employee Opinion

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( TheStreet) -- Greg Smith was an executive director and long-time employee of Goldman Sachs' ( GS) London office. No doubt he made a lot of money at GS over his 12-year tenure, running its U.S. equity derivatives business in Europe, the Middle East, and Africa.

In an apparent, reality imitates art Jerry McGuire moment, Greg Smith quit GS, and sent the New York Times a copy of his resignation letter.

First of all, how sad that the New York Times published an employee resignation letter as being worthy of an op-ed piece. But, you can't blame the newspaper. It was during a perfect storm:
  • Heightened media scrutiny over GS and Wall Street
  • Increased anger from the infamous 99% citizenry over wealthy, encouraged even by the White House administration's tax plans
  • An "insider" spilling the beans and casting more negativity on the GS giant
  • The fear that should be running through the hearts of companies everywhere is the power of employee opinion on a company's reputation risk.

    I don't think anyone believes that Goldman Sachs is going to cease doing business or lose its client base because of Smith's letter and subsequent resignation in spite of recent losses, but that letter did three things:

    1. Got the attention of multimedia and went viral around the globe within minutes.

    2. Clearly reinforced suspicions about GS' already damaged reputation along with the industry's dark cloud of culture of greed and indifference.

    3. Got Smith a $1.5 million advance book deal from Grand Central Publishing (an imprint of the Hachette Book Group).

    In other words, now that employees are feeling empowered to not only quit, but make a multimedia revelation in the process, companies are even more vulnerable.

    Add publicity, fame and possible monetary gain, and I'd suggest employers continue regarding employee satisfaction as a core strategy in protecting their company's reputation risk.

    And you know what? This Smith thing wasn't even blowing the whistle on any SEC violations, but simply talking about "toxic" cultural shifts and placing company interests over the "muppet" clients.

    Then again, isn't that bad enough?

    This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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