Corporate Governance, Accountability and Ethics in Goldman Sachs

Topics: Corporate governance, Management, Risk management Pages: 8 (2587 words) Published: May 31, 2013
Corporate Governance, accountability and ethics in Goldman Sachs

1. Introduction
The greatest modern financial crisis is still unraveling the aftershocks now I feel is the most serious in Europe. In fact, the lifting of the mortgage crisis in the United States and bankruptcy homeowners damaged in progress, but is no longer news. The ultimate responsibility of the crisis, the responsibility of the nature and extent of the problem has not been a satisfactory answer. Therefore, the community has finally improved, responsibilities more solid. It involves the practice of, and vigorously promote low-quality products to customers of big banks, while hedging bets on their own account in the opposite direction. Crime here, is not hedged, but the lack of transparency to customers. Asked to assume greater responsibility and market regulators and government officials, as well as the Board of Directors of the Company, has been a positive impact of the financial crisis. Place to ensure duty-bound, and that corporate responsibility is indeed hope that the Board of Directors and the field of market regulation will be a lasting crisis. Clear from the lessons of the financial crisis has moved from the board of directors of the CEO and the Executive Board to shirk its responsibility for the operation of enterprises and survival. The responsibility of the enterprises has laid a lot of executives. The focus of governance is to provide appropriate security and protect shareholders' interests. This pressure led to the revolution of the economic value added, does not seem any security for many investors. The problem is that the lack of transparency to the business by the Board. It is this transparency, to provide the Board with sufficient confidence, it is recommended that the projections will be achieved. This essay will examine some of the Goldman Sachs’ corporate governance principles with specific regards to code of conducts and principles of responsibilities. 2. Corporate governance

To develop and improve standards of corporate governance failure occurred often in accordance with the Corporate Governance emphasis on areas of particular concern. Is sometimes described as the worst financial crisis since the "Great Depression" the current turmoil in the financial institutions. Therefore, it is the nature of the examination and assessment of the main lessons of corporate governance in the banking industry as a whole. 2.1 board responsibilities

The members of the Board of the quality of bank regulators often set the fit and proper test of particular concern. However, this test does not completely problem-solving skills to oversee an important business, this is an issue for shareholders and other stakeholders. The Board's ability to outsiders and the fact it is extremely difficult to determine. However, it is often asserted, the bank's board of directors that the lack of banking and financial experience. One study estimates that eight major financial institutions in the United States, two-thirds of the directors there is no banking experience. (Guerrier, F. and P. Thal-Larsen, 2008) In addition, many of the directors of the financial background of a highly technical board covering the audit and risk committee. The Goldman Shacs Inc. group states that’ the board’s responsibility is to provide direction and oversight’. However it clearly has failed this responsibilities through the sales of its low quality subprime products and services. Moreover there is no penalties imposed on those who violate those responsibilities which on the other hand could encourage those kind of behavior. Moreover there are specific responsibility for board to evaluating its CEO whereas the CEO of Goldman Sachs Lloyd Blankfein is still in the position until today. Even after all those turmoil, he is still in charge of that giant financial institution. 2.2 risk taking of the board

Information transferred to the Main Board of the organization, including...
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