Until last week, Greg Smith was previously unknown to those outside the investment banking world.  He isn’t a Warren Buffett or Bill Gates. He doesn’t have any of the notoriety of an Enron exec, and his name wasn’t splashed over the evening news. Why is he all over the headlines? Because he quit his job at Goldman Sachs in the most public way one can possibly do it; an op-ed article in the New York Times.

Smith worked at Goldman Sachs for twelve years. He was responsible for the US/Americas Equity Derivatives business in Europe. In layman’s terms, he advised some of the largest hedge funds, asset managers, and sovereign wealth funds in the world, equaling a total asset base of over a trillion dollars. Smith had no qualms about divulging exactly why he was leaving. In fact, he was quite blunt in his assessment of the investment bank’s company culture and ethical platform.

“To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.”

Wow. It’s a safe assumption to make that Smith isn’t looking to return to Goldman Sachs anytime soon. Throughout the rest of the article, Smith explicitly details why he is leaving the company. He accuses Goldman Sach’s CEO and president of letting the company culture disintegrate on their watch, suggests the company “weed out the morally bankrupt people,” and questions the company’s integrity and commitment to their clients.

Resigning from his post isn’t the bomb-dropping issue here. People quit every day. It was the public, fire breathing way that Smith chose to resign, choosing one of the most prominent and well-known publications in the country as his megaphone. And it raises interesting issues about the relationships between employees and their company, and more interestingly about the huge media storm Smith raise. Was it right for him to slay his company in such a public manner? Are the allegations true? Regardless of whatever anyone believes, or what actually happened, the damage is done, and that is where the issue of public officials liability arises.

Public officials, CEO’s, international companies, celebrities, and government organizations alike are all held to high public standards. Companies that are as well known as Goldman Sachs are expected to maintain the ultimate level of integrity in the public eye, and when it falls short it can explode in their faces.  Look at the Enron disaster. Bill Clinton and the eternally infamous Monica Lewinsky scandal. The BP oil spill. Company, public official, or CEO, it still has the same effect. Smith’s resignation made front page news because it involved one of the most highly recognized companies in the world. Any public accusation can have detrimental effects on both the accuser and the accused, regardless of whether it is true or not.

Although different in nature, Smith’s resignation reminds those in the public eye everywhere that they are held to high standards of conduct. Whether actual or alleged, public officials can face a number of risk issues and must be ready to serve and protect their constituency at any cost.

Protect your elected public officials from errors and omissions, negligence, breach of duty, and misstatements. We’ll sit down with you to look objectively at the special risks, threats and opportunities you face as a public official. Once we identify the risks, we’ll teach you how to avoid them.  This is why we are often called the New York D&O insurance experts. Pre-Planning is key. Contact us now.

Why I am Leaving Goldman Sachs – http://www.nytimes.com/2012/03/14/opinion/why-i-am-leaving-goldman-sachs.html?pagewanted=all