Goldman Sachs 2012 Annual Report Download - page 82

Management’s Discussion and Analysis
The following committees report jointly to the Firmwide
Risk Committee and the Firmwide Client and Business
Standards Committee:
‰Firmwide Commitments Committee. The Firmwide
Commitments Committee reviews the firm’s
underwriting and distribution activities with respect to
equity and equity-related product offerings, and sets and
maintains policies and procedures designed to ensure that
legal, reputational, regulatory and business standards are
maintained on a global basis. In addition to reviewing
specific transactions, this committee periodically
conducts general strategic reviews of sectors and products
and establishes policies in connection with transaction
practices. This committee is co-chaired by the firm’s
senior strategy officer and the co-head of Global
Mergers & Acquisitions who are appointed by the
Firmwide Client and Business Standards
Committee chairperson.
‰Firmwide Capital Committee. The Firmwide Capital
Committee provides approval and oversight of
debt-related transactions, including principal
commitments of the firm’s capital. This committee aims
to ensure that business and reputational standards for
underwritings and capital commitments are maintained
on a global basis. This committee is co-chaired by the
firm’s global treasurer and the head of credit finance for
Europe, Middle East and Africa who are appointed by the
Firmwide Risk Committee chairpersons.
Investment Management Division Risk Committee.
The Investment Management Division Risk Committee is
responsible for the ongoing monitoring and control of
global market, counterparty credit and liquidity risks
associated with the activities of our investment
management businesses. The head of Investment
Management Division risk management is the chair of this
committee. The Investment Management Division Risk
Committee reports to the firm’s chief risk officer.
Conflicts Management
Conflicts of interest and the firm’s approach to dealing with
them are fundamental to our client relationships, our
reputation and our long-term success. The term “conflict of
interest” does not have a universally accepted meaning, and
conflicts can arise in many forms within a business or
between businesses. The responsibility for identifying
potential conflicts, as well as complying with the firm’s
policies and procedures, is shared by the entire firm.
We have a multilayered approach to resolving conflicts and
addressing reputational risk. The firm’s senior management
oversees policies related to conflicts resolution. The firm’s
senior management, the Business Selection and Conflicts
Resolution Group, the Legal Department and Compliance
Division, the Firmwide Client and Business Standards
Committee and other internal committees all play roles in
the formulation of policies, standards and principles and
assist in making judgments regarding the appropriate
resolution of particular conflicts. Resolving potential
conflicts necessarily depends on the facts and circumstances
of a particular situation and the application of experienced
and informed judgment.
At the transaction level, various people and groups have
roles. As a general matter, the Business Selection and
Conflicts Resolution Group reviews all financing and
advisory assignments in Investment Banking and investing,
lending and other activities of the firm. Various transaction
oversight committees, such as the Firmwide Capital,
Commitments and Suitability Committees and other
committees across the firm, also review new underwritings,
loans, investments and structured products. These
committees work with internal and external lawyers and
the Compliance Division to evaluate and address any actual
or potential conflicts.
We regularly assess our policies and procedures that
address conflicts of interest in an effort to conduct our
business in accordance with the highest ethical standards
and in compliance with all applicable laws, rules,
and regulations.
80 Goldman Sachs 2012 Annual Report