Business Practices Committees

1
Business Practices Committees

• Michael S. Helfer
• General Counsel and Corporate Secretary

Charting a Course for the Future A Conference on
Managing Internationally Active Financial
Institutions June 15, 2005
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Business Practices Mission

• Adhere to the highest standards of integrity,
  professionalism and ethics
• Provide a serious forum for senior management to
  discuss business practices issues
• Identify conflicts of interest, franchise or
  reputational risks
• Stay ahead of the curve

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BPC Organization
Citigroup Board of Directors
Citigroup Business Practice Committee
Business Level Business Practice Committees
Global Consumer Group
Global Wealth Management
Citigroup Asset Management
Citigroup Alternative Investments
Corporate Investment Banking
Liaison Committee

• BPCs are established at the corporate level as
  well as within each of the 5 main businesses
• Still evolving introduced in 2002, and
  established in each of the businesses by 2004
• Business-level committees report quarterly to the
  Citgroup-level committee
• Issues involving multiple business units
  discussed at Citgroup-level committee
• Liaison Committee that includes representatives
  from business level BPCs, Global Compliance and
  other corporate staff helps to identify and track
  cross-business and enterprise-wide issues

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BPCs Operating Themes

• Striving for the highest standards means
• Letter of the law is not good enough in fact,
  BPCs are not a forum to debate legal merits
  anything that goes to the committees must have
  already been reviewed and determined to be
  legally permissible
• Acceptable as industry practice is also not
  good enough
• As general scrutiny in the industry has
  increased, standards are changing at an
  accelerated pace
• BPCs designed to help us keep up with and stay
  ahead of those changes
• BPCs reinforce the companys commitment to core
  values and shared responsibilities
• BPCs are not a control function

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BPCs in Practice

• BPCs primary focus
• Identify and assess conflicts of interest and
  reputational/franchise risks
• Develop and maintain practices and related
  policies and procedures to manage these risks
• Issues presented to the committees
• Come from a variety of internal and external
  sources (legal/compliance, risk, employees,
  customers, regulators, litigation claims,
  advocates, news articles)
• Have already been cleared through normal control
  channels legal, compliance, risk, tax, financial
  control
• May deal with transactions, sales practices,
  distribution/suitability concerns and global
  versus local practices among others
• Key questions
• Is this consistent with our values?
• Are we doing the right thing for our
  shareholders?
• How would this be viewed by
• Our Board? Our regulators? Our customers? Others
  in the public?
• We report regularly to our Board about BPC
  decisions

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BPC Examples

• Single premium mortgage insurance
• Client entertainment
• IPO allocations outside the United States