Updated 04.23.2010


Summary: At present, Goldman Sachs is facing the heat from certain controversial events that have the potential to affect its international reputation and standing. These events have affected its scores with the Board of Directors and Senior Management score falling to 3.48 for 2009 from 3.90 for 2008(Out of 5). Its Internal Control Environment score has also fallen to 3.37 in 2009 from a much higher score in 2008.


Obviously, the big news with Goldman Sachs and one that affects its governance scores, is that it has been charged with civil fraud by the SEC. The complaint alleges that it failed to disclose to its investors that assets that were being sold were designed by a firm that was betting against these assets. Goldman’s Internal Control Environment has been scored accordingly.


There are other issues on its Internal Control Environment that have affected its scores including audit committee directors with multiple public company directorships, directors who appear to be ill qualified for the positions they hold as well as related party transactions between the company and senior management and between the company and directors.


On the Board of Directors and Senior Management front, a big issue is the absence of a key Board level committee that would provide oversight of an area that is critical to any financial company. Another hit for Goldman on its ‘Board of Directors and Management’ category is the fact that Director Rajat Gupta has been notified by federal prosecutors about his alleged connections to the Galleon hedge fund controversy. Director Gupta has not been directly charged in this case. ‘Board Independence’ has also been affected by the fact non management meetings were held less frequently than full Board meetings that included the 2 employee directors.


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Detailed Scorecard


Board Size: 12

Board of Directors Compensation($): $75,000- Annual retainer of fully vested Restricted Stock Units ; Annual grants through fully vested RSU or through options or a combination of both. (RSU)

Total Carbon Emissions(metric tons): 2008- 253,297 ; 2007- 247,873

Total CEO compensation for 2009($): $ 862,657.It does not include $9 million as RSU's deliverable as Shares at Risk granted in 2010. They will be included in the 2010 compensation.

Chief Risk Officer: Craig Broderick

Changes in Chief Risk Officer over the past 2 years**: None.

Tenure of Chief Risk Officer in this position: Craig Broderick was appointed in January 2005.

** Why do we look at changes in the Chief Risk Officer position? Companies, where we observe quick changes to senior risk positions in case of companies in the finance industry) are high on our 'watch' list.