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Goldman Sachs to Conduct Comprehensive Review

Friday, May 07, 2010

At the bank’s annual meeting, Lloyd Blankfein told Goldman Sachs shareholders that the firm, under fire from critics on all sides, will undertake a comprehensive review of its business practices.

“Questions have been raised that have gone to the heart of our most fundamental value, how we treat our clients,” the chairman and CEO said immediately after he started the meeting.

To answer the growing belief that the bank puts its interests first, Blankfein said the company will create a business standards committee to ensure that the interests of clients always come first. “Our firm must renew the core principles that have sustained us for 141 years,” he said.

Speaking to more than a hundred shareholders in a windowless, wood-paneled conference room in a Wall Street office building alongside the river, Blankfein said “the last few weeks have been difficult and disappointing for the firm.”

Since the Securities and Exchange Commission filed a civil-fraud suit against the bank in April, the value of the bank’s stock price has dropped nearly $20 billion.

To combat the formal charges as well as reports of a Justice Department criminal investigation and increasing anger on Capitol Hill after a confrontational, hours-long hearing, Blankfein has embarked on a rare public relations campaign to rebuild the company’s once peerless reputation.

Addressing the bank’s shareholders, Blankfein said he understood the disconnect that exists between how the company sees itself and how outsiders--shareholders, clients, regulators, politicians and the general public--see the firm.

Several dozen of those people, angry at the bank, protested outside before the meeting began. Bill de Blasio, New York’s public advocate held a press conference calling on bank to disclose its political spending. Before the meeting began, a few dozen protestors gathered outside.

Inside, one shareholder called on the CEO to step down by Monday. On this issue, Blankfein was extremely clear.

“I have no current plan to step down on Monday.”

A shareholder proposal to separate the roles of chairman and CEO at the bank was not approved.

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