Published May 23, 2013

Business Standards Committee: Impact Report

Goldman Sachs Chairman and CEO Lloyd Blankfein announced the creation of the Business Standards Committee (BSC) in May 2010 to conduct an extensive review of our business standards and practices. After reviewing every major business, region and activity of the firm, the BSC published a report in January 2011 that included 39 recommendations. In this report we explain the changes we made and how they impacted our firm.

Read the BSC Impact Report
Client Care


Gary D. Cohn, president and COO of Goldman Sachs, discusses how the new Firmwide Client and Business Standards Committee has focused all of our key committees on elevating the standard of client care.

Watch video
Report of the Business Standards Committee


Nearly five years since the onset of the financial crisis, the public continues to ask if anything has changed at large financial institutions to strengthen business standards and practices.

Certainly, the financial system is safer and more resilient. Financial institutions hold significantly more capital and they have materially reduced their holdings of illiquid assets and their gross leverage. Important regulatory reforms are being implemented with respect to capital, liquidity, recovery and resolution and other areas.

But, amid these changes, many in the public worry about whether financial institutions have reviewed and made improvements in how they conduct themselves, communicate and manage their responsibilities to their clients and fulfill their obligations to the health of the financial system.

This report represents our priority and continuing commitment to communicate with our clients, shareholders, other stakeholders, regulators and the broader public about the changes we have made – and continue to make – and their impact in making us a better firm.

Read the BSC Impact Report

Business Standards Committee Timeline

Sustained ongoing effort

  • May 7, 2010

    Chairman and CEO Lloyd Blankfein announced at the Annual Meeting of Shareholders the firm's intention to create the Business Standards Committee

  • May 14, 2010

    Membership, purpose and remit of the Business Standards Committee announced

    Learn more
  • Jan 11, 2011

    Publication of the Business Standards Committee Report

    Learn more
  • Jan 20, 2011

    Initial meeting of the Business Standards Committee Implementation Oversight Group

  • June 2011

    Launch of Chairman's Forum globally for managing directors of the firm

  • April 2012

    Chairman's Forum completed for managing directors globally, with all 23 sessions led by Lloyd Blankfein

  • June 2012

    Chairman's Forum series launched globally for vice presidents

  • Feb 2013

    All 39 recommendations of the Business Standards Committee fully implemented

Our Business Principles


Our 14 business principles are the foundation of our culture of client service, teamwork, excellence, personal initiative and accountability. They are fundamental to our long-term sustainability and success.

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The Chairman's Forum

on Reputational Excellence
and Personal Accountability

The Chairman's Forum, a series of three-hour sessions for managing directors and vice presidents globally led by senior leaders of the firm, features a case study and discussion on how we conduct ourselves with respect to serving our clients and protecting the firm's reputation. The Chairman's Forum is a powerful tool for leadership development and for communicating the requirement for a deeper commitment to individual and collective accountability.

“We all recognized that the work of the Chairman's Forum was going to have a focus and an impact on behavior, in terms of higher standards of care for our clients, truly enhanced and strengthened ways to think about reputational risk, and reputational risk management—and ways to emphasize and strengthen very high standards of individual and collective accountability.”

— E. Gerald Corrigan
Managing Director
Co-Chair, Business Standards Committee, 2010-2011
Goldman Sachs
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Key Stats
Lloyd Blankfein, Chairman and CEO Goldman Sachs

“We're a great believer, as a firm, in individuals and judgment and how important it is to fill jobs with the best people. But unless you have process and stop the clocks so that people of good judgment have the time and the incentive to exercise that judgment, then you don't necessarily benefit from their good judgment.”

— Lloyd Blankfein
Chairman and CEO
Goldman Sachs

“Processes and committees are there to help you achieve the right result, not there to take responsibility or accountability away from you.”

— Lloyd Blankfein, Goldman Sachs Chairman and CEO, to managing directors attending a Chairman's Forum session, February 22, 2012

The Chairman's Forum

By the Numbers

Key Stats

92 Sessions

Number of Chairman's Forums. All twenty-three sessions for managing directors were led by Chairman and CEO Lloyd Blankfein on four continents to discuss reputational excellence and personal accountability

42,000 hours

Training for managing directors and vice presidents in the Chairman's Forum

20 cities

Locations of Chairman's Forum Meetings:

Bangalore, Beijing, Boston, Chicago, Dallas, Frankfurt, Hong Kong, Houston, London, Los Angeles, Melbourne, Mumbai, New York, Salt Lake City, San Francisco, Sao Paulo, Seoul, Singapore, Sydney, Tokyo

3 hours

Length of each session of the Chairman's Forum


Managing directors participated in the Chairman's Forum by April, 2012



A higher standard of Client Care

Firmwide Client and Business
Standards Committee

To help achieve a higher standard of client care, we established the Firmwide Client and Business Standards Committee (CBSC) and have changed our committee governance structure and committee mission statements to ensure that clients are at the very center of our decision-making. Gary D. Cohn, president and COO of Goldman Sachs, talks about the Firmwide Client and Business Standards Committee in the video below.

“We are a client-driven, client-centric organization. So you can't look at business standards without looking at clients. The mission of the committee is to be proactive and reactive—and hold the firm to the best standards...”

— Gary D. Cohn
President and COO
Goldman Sachs
Members of the CBSC

Membership of the CBSC

The Business Standards Committee established the Firmwide Client and Business Standards Committee (CBSC), which is comprised of some of the most senior executives of the firm. The CBSC has representatives across divisions, regions and businesses of the firm.

About the CBSC

The Firmwide Client and Business Standards Committee (CBSC) assesses and makes determinations regarding business standards and practices, reputational risk management, client relationships and client service. It is chaired by the firm's president and chief operating officer, and reports to the Management Committee.

We enhanced our suitability framework to help us better assess whether our clients... understand the range of outcomes from transactions they execute with us, particularly those transactions that are strategic or complex.

— Business Standards Committee, Impact Report, May 2013

Lifecycle of a
Transaction Click here to

Follow this example of the firm's transaction review and approval process for a scenario in which an existing client of our Securities Division expresses an interest in trading a product with the firm — from the client's initial conversation with our client relationship professional to execution of the trade.

  • Lifecycle of a Transaction
  • The Client's Expression of Interest

    Following a dialogue between a Goldman Sachs client relationship professional and an existing client of the firm, the client expresses an interest in trading a product with the firm which we have not traded with the client in the past.

  • Discussion on the Desk

    The client relationship professional discusses the trade with his or her manager. Having identified no threshold suitability issues that would cause the firm to decline the trade at the outset, they agree to move to the next step of the review.

  • Suitability Assessment Continues with the TCM

    The client relationship professional initiates a formal suitability assessment by accessing the client dashboard, an online system available only to Goldman Sachs employees authorized to see the client's profile and Transaction Class Matrix (TCM). The TCM describes the Transaction Classes in which the client has already been approved to transact from a suitability perspective. A Transaction Class reflects a group of products with similar levels of complexity within each asset class.

    In this scenario, the client would like to trade a product that belongs to a Transaction Class containing products which Goldman Sachs has not yet traded with the client. Within the client dashboard, the client relationship professional seeks to add the proposed Transaction Class to the client's TCM. The client relationship professional is asked to enter information specific to the client and the proposed Transaction Class, including the client's history trading relevant products with other firms.

  • The TCM Suitability Framework

    Senior Divisional Leadership has established a baseline level of suitability review depending on the type of client and the complexity of the proposed Transaction Class.

    However, the client relationship professional, any supervisor on the trading desk or a Compliance officer may decide additional review is warranted based on the individual characteristics of the client, including experience with the relevant products, trading objectives and risk management capabilities.

  • Outcomes from the TCM: Escalate or Transact

    Upon submission of the proposed Transaction Class for review, the judgment whether heightened review is required depends upon the client's investment experience, risk tolerance and other factors.

    The client relationship team or a Compliance officer may determine that the proposed Transaction Class should be subject to heightened approval. As a next step, the client relationship professional must complete a due diligence questionnaire which will inform the discussion in the heightened approval process.

    Alternatively, the Transaction Class is deemed to be appropriate for the client, and the client is approved to trade in this Transaction Class going forward in most circumstances. The client relationship professional, manager and Compliance automatically receive notification of the approval. The client relationship professional contacts the client to proceed with execution of the transaction. Once a product is approved and executed, we have the capability to analyze the performance of the client's derivative transaction, enabling the client relationship professional and his or her manager to engage with the client as appropriate about the performance of the transaction.

    While the TCM suitability framework is a valuable tool for assessing suitability, determining whether a transaction is suitable is the responsibility of the client relationship team. Even in a case where a Transaction Class or product is deemed suitable through the TCM process, any supervisor on the trading desk or a Compliance officer may refer a transaction to the appropriate committee for heightened review.

  • Transactions Subject to Heightened Approval

    Three types of transactions are subject to heightened approval, even if the transaction falls within an approved Transaction Class in the client's TCM: Strategic, Complex and Designated Structured transactions. All three transaction types are identified by firm policies. The central characteristic of those transaction types are as follows.

    Strategic transactions are those that may be strategic or potentially material to the client or the market in which the transaction is executed.

    While there is no standard definition of a Complex transaction, the risk factors associated with these instruments may include: non-linear or leveraged payouts (including embedded leverage), illiquidity, lack of price transparency and the potential for losses in excess of initial investment.

    Designated Structured transactions are those where the client's tax, accounting or regulatory treatment is a primary feature of the transaction or is materially uncertain.

  • The Heightened Approval Framework

    Strategic and Complex transactions are subject to one of three levels of heightened review and approval. The level of review and approval for a transaction is based on a number of parameters associated with the client and the transaction, including the client's size and key financial metrics, the term of the transaction and the client's risk of loss. A transaction may require review and approval by a managing director, a participating managing director (a “partner”), a panel of partners, or at the highest level of risk under the framework, the Firmwide Suitability Committee or the Asia Pacific Suitability Committee (a regional committee which reviews transactions under the supervision of the Firmwide Suitability Committee).

    Designated Structured transactions must be reviewed and approved by the Structured Products Committee.

  • Outcomes of the Heightened Approval Process

    The heightened approval process results in one of three outcomes.

    First, the transaction may be approved. The client relationship professional contacts the client to proceed with execution of the transaction. Once a product is approved and executed, we have the capability to analyze the performance of the client's derivative transaction, enabling the client relationship professional and his or her manager to engage with the client as appropriate about the performance of the transaction.

    Second, the transaction may be conditionally approved. Conditional approval represents a rigorous approach to the identification of critical issues that are seen by the committees at the firm as outright barriers to approving a transaction as proposed. Many transactions are approved only after important changes are made to the way they were originally contemplated. Satisfying these conditions involves modifying the proposed transaction in a way that takes into account these concerns, many of which are client-focused or reputational in nature. In most cases, conditions are eventually met to the satisfaction of the committee and the client, and the transactions are executed. In cases where the conditions are not satisfied, the transactions are not executed.

    Third, the transaction may be declined, withdrawn from consideration or deferred. The client relationship professional is responsible for contacting the client to explain the outcome of the review and discuss next steps.

[Our] commitment... will always be in the direction of our responsibility to serve our clients' long-term interests, protect the firm's reputation and accept our individual and collective accountability for doing so.

— Business Standards Committee, Impact Report, May 2013