Goldman Sachs 2015 Annual Report Download - page 97

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Active management of our positions is another important
process. Proactive mitigation of our market and credit
exposures minimizes the risk that we will be required to
take outsized actions during periods of stress.
We also focus on the rigor and effectiveness of our risk
systems. The goal of our risk management technology is to
get the right information to the right people at the right
time, which requires systems that are comprehensive,
reliable and timely. We devote significant time and
resources to our risk management technology to ensure that
it consistently provides us with complete, accurate and
timely information.
People. Even the best technology serves only as a tool for
helping to make informed decisions in real time about the
risks we are taking. Ultimately, effective risk management
requires our people to interpret our risk data on an ongoing
and timely basis and adjust risk positions accordingly. In
both our revenue-producing units and our independent
control and support functions, the experience of our
professionals, and their understanding of the nuances and
limitations of each risk measure, guide us in assessing
exposures and maintaining them within prudent levels.
We reinforce a culture of effective risk management in our
training and development programs as well as the way we
evaluate performance, and recognize and reward our
people. Our training and development programs, including
certain sessions led by our most senior leaders, are focused
on the importance of risk management, client relationships
and reputational excellence. As part of our annual
performance review process, we assess reputational
excellence including how an employee exercises good risk
management and reputational judgment, and adheres to
our code of conduct and compliance policies. Our review
and reward processes are designed to communicate and
reinforce to our professionals the link between behavior
and how people are recognized, the need to focus on our
clients and our reputation, and the need to always act in
accordance with the highest standards of the firm.
Structure
Ultimate oversight of risk is the responsibility of our Board.
The Board oversees risk both directly and through its
committees, including its Risk Committee. Within the firm,
a series of committees with specific risk management
mandates have oversight or decision-making
responsibilities for risk management activities. Committee
membership generally consists of senior managers from
both our revenue-producing units and our independent
control and support functions. We have established
procedures for these committees to ensure that appropriate
information barriers are in place. Our primary risk
committees, most of which also have additional sub-
committees or working groups, are described below. In
addition to these committees, we have other risk-oriented
committees which provide oversight for different
businesses, activities, products, regions and legal entities.
All of our firmwide, regional and divisional committees
have responsibility for considering the impact of
transactions and activities which they oversee on our
reputation.
Membership of our risk committees is reviewed regularly
and updated to reflect changes in the responsibilities of the
committee members. Accordingly, the length of time that
members serve on the respective committees varies as
determined by the committee chairs and based on the
responsibilities of the members within the firm.
In addition, independent control and support functions,
which report to the chief executive officer, the president
and chief operating officer, the chief financial officer, the
chief risk officer and the chief administrative officer, are
responsible for day-to-day oversight or monitoring of risk,
as illustrated in the chart below and as described in greater
detail in the following sections. Internal Audit, which
reports to the Audit Committee of the Board and includes
professionals with a broad range of audit and industry
experience, including risk management expertise, is
responsible for independently assessing and validating key
controls within the risk management framework.
Goldman Sachs 2015 Form 10-K 85