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March 10, 2016 Martin P. Dunn Morrison & Foerster LLP mdunn@mofo.com Re: JPMorgan Chase & Co. Incoming letter dated January 14, 2016 Dear Mr. Dunn: This is in response to your letters dated January 14, 2016 and February 18, 2016 concerning the shareholder proposal submitted to JPMorgan Chase by Jing Zhao. We also have received a letter from the proponent dated January 19, 2016. Copies of all of the correspondence on which this response is based will be made available on our website at http://www.sec.gov/divisions/corpfin/cf-noaction/14a-8.shtml. For your reference, a brief discussion of the Division’s informal procedures regarding shareholder proposals is also available at the same website address. Sincerely, Matt S. McNair Senior Special Counsel Enclosure cc: Jing Zhao ***FISMA & OMB Memorandum M-07-16***
March 10, 2016 Response of the Office of Chief Counsel Division of Corporation Finance Re: JPMorgan Chase & Co. Incoming letter dated January 14, 2016 The proposal recommends that the company adopt an executive compensation philosophy with consideration of relevant social factors to improve the company’s ethical conduct and public reputation. We are unable to concur in your view that JPMorgan Chase may exclude the proposal under rule 14a-8(i)(3). We are unable to conclude that the proposal is so inherently vague or indefinite that neither the shareholders voting on the proposal, nor the company in implementing the proposal, would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires. Accordingly, we do not believe that JPMorgan Chase may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(3). We are unable to concur in your view that JPMorgan Chase may exclude the proposal under rule 14a-8(i)(7). In arriving at this position, we note that the proposal focuses on senior executive compensation. Accordingly, we do not believe that JPMorgan Chase may omit the proposal from its proxy materials in reliance on rule 14a-8(i)(7). Sincerely, Coy Garrison Attorney-Adviser
DIVISION OF CORPORATION FINANCE INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS
The Division of Corporation Finance believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matter under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division’s staff considers the information furnished to it by the Company in support of its intention to exclude the proposals from the Company’s proxy materials, as well as any information furnished by the proponent or the proponent’s representative.
Although Rule 14a-8(k) does not require any communications from shareholders to the
Commission’s staff, the staff will always consider information concerning alleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff’s informal procedures and proxy review into a formal or adversary procedure.
It is important to note that the staff’s and Commission’s no-action responses to
Rule 14a-8(j) submissions reflect only informal views. The determinations reached in these no-action letters do not and cannot adjudicate the merits of a company’s position with respect to the proposal. Only a court such as a U.S. District Court can decide whether a company is obligated to include shareholders proposals in its proxy materials. Accordingly a discretionary determination not to recommend or take Commission enforcement action, does not preclude a proponent, or any shareholder of a company, from pursuing any rights he or she may have against the company in court, should the management omit the proposal from the company’s proxy material.
MORRISON I FOERSTER
February 18, 2016
2000 PENNSYLVANIA AVE., NW
WASHINGTON, D.C.
20006-1888
TELEPHONE: 202.887.1500
FACSIMILE: 202.887.0763
\XIWW.MOFO.COM
VIA E-MAIL (shareholderproposals@sec.gov)
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549
Re: JPMorgan Chase & Co. Shareholder Proposal of Jing Zhao
Dear Ladies and Gentlemen:
MORRISON & FOERSTER LLP
BEIJlNG, BERLIN, BRUSSELS, DENVER, HONG KONG, LONDON, LOS ANGELES,
NE\V YORK, NORTHERN VIRGINIA,
PALO ALTO, SACRA:-..IENTO, S.AN DIEGO,
S1\N FRANCISCO, SHANGHAI, SINGAPORE,
TOKYO, WASHINGTON, D.C.
Writer's Direct Contact
+ 1 (202) 778.1611 MDunn@mofo.com
1934 Act/Rule 14a-8
This letter concerns the request, dated January 14, 2016 (the "Initial Request Letter"), that we submitted on behalf of our client JPMorgan Chase & Co., a Delaware corporation (the "Company"), seeking confirmation that the staff (the "Staff') of the Division of Corporation Finance (the "Division") of the U.S. Securities and Exchange Commission (the "Commission") will not recommend enforcement action to the Commission if, in reliance on Rule 14a-8 under the Securities Exchange Act of 1934 (the "Exchange Act"), the Company omits the shareholder proposal (the "Proposaf') and supporting statement (the "Supporting Statement") submitted by Jing Zhao (the "Proponent") on November 5, 2015, from the Company's proxy materials for its 2016 Annual Meeting of Shareholders (the "2016 Proxy Materials"). The Proponent submitted a letter to the Staff, dated January 19, 2016 (the "Proponent Letter"), expressing the view that the Proposal and Supporting Statement may not be excluded from the 2016 Proxy Materials.
We submit this letter on behalf of the Company to supplement the Initial Request Letter and respond to the views expressed in the Proponent Letter. We also renew our request for confirmation that the Staff will not recommend enforcement action to the Commission if the Company omits the Proposal and Suppmiing Statement from its 2016 Proxy Materials in reliance on Rule 14a-8.
We have concurrently sent a copy of this correspondence to the Proponent.
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission February 18, 2016 Page2
I. EXCLUSION OF THE PROPOSAL
A. The Proposal May Be Excluded in Reliance on Rule 14a-8(i)(3) Because It is Materially False and Misleading
As discussed in the Initial Request Letter, the Staff has consistently found that a proposal is inherently vague and indefinite and, therefore, may be omitted from a company's proxy materials if it fails to adequately define key terms or provide sufficient guidance regarding the manner in which the proposal should be implemented. Further, the Staff has consistently concurred that specific standards that are integral to a proposal must be sufficiently explained in the proposal or supporting statement.
The Initial Request Letter expressed the view that the Proposal may be properly excluded under Rule 14a-8(i)(3) because the terms "economic condition" and "average income" are key to the Proposal but are unclear because the Proposal neither explains the meaning of these key terms nor discusses how these terms should be applied to the Proposal. The Proponent Letter does not address this point directly; instead, it merely states that the Company "retains the flexibility to implement the proposal." As discussed in the Initial Request Letter, while each of the words comprising these terms have an ordinary meaning in isolation, put together, each twoword term is likely to cause confusion as to the information referenced and the application of that term to the Proposal. For example, there is no indication in the Proposal or the Supporting Statement as to whose "economic condition" or "average income" is being referenced in the Supporting Statement or to the type of data the Company would use to determine "economic condition" and "average income." As noted in the Initial Request Letter, given the Company's size, scope and complex operations, there are innumerable manners in which these terms could be understood by both the shareholders in voting on the Proposal and the Company in implementing the Proposal if adopted.
Accordingly, as discussed in the Initial Request Letter, neither the shareholders voting on the Proposal, nor the Company in implementing the Proposal, would be able to understand with any reasonable certainty exactly what the requested executive compensation philosophy requires. As such, the Company continues to be of the view that the Proposal is materially vague and misleading and, as such, the Company may properly omit the Proposal and Supporting Statement in reliance on Rule 14a-8(i)(3).
B. The Proposal May Be Excluded in Reliance on Rule 14a-8(i)(7) Because It Relates To The Company's Ordinary Business Operations
As discussed in the Initial Request Letter, the Proposal may be properly excluded in reliance on Rule 14a-8(i)(7) because the action sought by the Proposal deals with general employee compensation. As discussed in the Initial Request Letter, the Proposal "focus[ es] on compensation at all levels at the Company and not merely senior executive compensation." In this regard, the Proposal and Supporting Statement relate broadly to an uncertain group of
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission February 18, 2016 Page 3
Company personnel whose compensation is determined by the Company's Compensation Committee. The Supporting Statement makes numerous references to the Proposal's intended impact upon "wage inequality" at the Company. As addressed in the Initial Request Letter, the Supporting Statement discussion expands the Proposal to a category of employees well below the executive officer level and, as such, states directly that the Proposal does not relate solely to senior executive compensation; instead, it provides that the Proposal relates to general employee compensation as well as senior executive compensation.
The Staff has consistently detennined that proposals relating to employee compensation involve matters relating to ordinary business and therefore may be excluded under Rule 14a-8(i)(7). In addition, the Staff has consistently determined that proposals addressing both executive compensation and non-executive, or general employee, compensation are excludable under Rule 14a-8(i)(7). See, e.g., Johnson Controls (Oct. 16, 2012) (noting "[T]he proposal relates to compensation that may be paid to employees generally and is not limited to compensation that may be paid to senior executive officers and directors. Further, proposals that concern general employee compensation matters are generally excludable under rule 14a-8(i)(7)."). The Initial Request Letter contains further discussion of the Staff precedent permitting exclusion of proposals that are not limited solely to executive compensation, such as the Proposal.
In the Proponent Letter, the Proponent states that the Proposal is not excludable in reliance on Rule 14a-8(i)(7), as the Proposal is distinguishable from a substantially similar proposal in which the Staff concurred in its exclusion (Apple Inc. (Nov. 16, 2015)). In Apple, the Staff concurred in the exclusion of the proposal, as "the proposal relates to compensation that may be paid to employees generally and is not limited to compensation that may be paid to senior executive officers and directors." The proposal in Apple recommended that the company reform its compensation committee to include outside independent experts from the general public to adopt new compensation principles responsive to America's economy, such as unemployment, working hours and wage inequality. While, as noted in the Initial Request Letter, the Resolved clause of the Proposal at issue recommends that the Company adopt an "executive compensation philosophy with consideration of relevant social factors to improve the Firm's ethical conduct and public reputation" (emphasis added), Staff Legal Bulletin No. 14B (June 28, 2005) states the analysis under Rule 14a-8(i)(7) requires consideration of "both the proposal and the supporting statement as a whole." Counter to the statements in the Proponent Letter, the Supporting Statement's reference to the role of the Compensation Committee in "assist[ing] the Board in its oversight of the Firm's compensation programs" and its "review[] and approv[al] [of] the Firm's overall compensation philosophy and practices" demonstrates the Proposal's focus on compensation at all levels at the Company and not merely senior executive compensation.
The Proponent Letter also asserts that the Company may not omit the Proposal from its 2016 Proxy Materials because the Proposal does not micromanage the Company. "Micromanagement" is the second of two considerations related to the Rule 14a-8(i)(7) ordinary
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission February 18, 2016 Page 4
business exclusion. Exchange Act Release No. 40018, Amendments to Rules on Shareholder Proposals, [1998 Transfer Binder] Fed. Sec. L. Rep. (CCH) 86,018, at 86,017-18 (May 21, 1998). The Company is of the view that it may exclude the Proposal because it relates to ordinary business matters, specifically general employee compensation; as such, the Company did not express the view that it may exclude the Proposal because it "micromanages" its ordinary business decisions. Accordingly, the Proponent's claim that the Proposal does not "micromanage" the Company's ordinary business decisions is irrelevant with regard to views set forth in the Initial Request Letter.
Accordingly, as the Proposal relates to a broad category of employees who are beyond the category of senior executive officers, it relates, at least in part, to general employee compensation matters. The Company, therefore, continues to be of the view that the Proposal relates, in part, to ordinary business operations and, as such, the Company may properly omit the Proposal and Supporting Statement in reliance on Rule 14a-8(i)(7). Further, the Initial Request Letter sets forth the Company's view that the Proposal may be excluded in reliance on Rule 14a-8(i)(7), as it relates to the Company's Code of Ethics for Financial Professionals and Code of Conduct. The Company continues to be of this view, which the Proponent Letter does not dispute.
II. CONCLUSION
Based on the discussion above and the discussion in the Initial Request Letter, the Company continues to be of the view that it may properly omit the Proposal and Supporting Statement from its 2016 Proxy Materials in reliance on Rule 14a-8. As such, we respectfully request that the Staff concur with the Company's view and not recommend enforcement action to the Commission ifthe Company omits the Proposal and Supporting Statement from its 2016 Proxy Materials. Ifwe can be of further assistance in this matter, please do not hesitate to contact me at (202) 778-1611.
Sincerely,
Martin P. Dunn of Morrison & Foerster LLP
cc: Jing Zhao Anthony Horan, Corporate Secretary, JPMorgan Chase & Co.
1
January 19, 2016
Via email to: shareholderproposals@sec.gov
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Chief Counsel
100 F Street, NE
Washington, DC 20549-2736
Re: Shareholder Proposal for Inclusion in JPMorgan Chase & Co. Proxy Statement
Ladies and Gentlemen:
This is a brief reply to the January 14, 2016 letter of Morrison Foerster LLP to rebut
JPMorgan Chase & Co. (the Company)’s baseless “bases” to exclude my proposal to its
2016 proxy statement.
My proposal is not materially false and misleading. For the purpose not to
micro-manage the Company's ordinary business operations, the proposal does not
redefine the commonly used terms “economic condition, unemployment and average
income” so the company retains the flexibility to implement the proposal. The letter
actually acknowledged that “each of the words comprising these terms has an ordinary
meaning” (page 4).
My proposal does not micro-manage matters relating to the Company's ordinary
business operations. The letter (page 6) cited the case of my proposal to Apple Inc. (Nov.
16, 2015). However, while my proposal to Apple says “to adopt new compensation
principles” so there seems reasonable relating to general employee compensation, my
proposal to the Company clearly says “executive compensation philosophy” only without
any ambiguity relating to general employee compensation.
Should you have any questions, please contact me at or
***FISMA & OMB Memorandum M-07-16***
***FISMA & OMB Memorandum M-07-16***
***FISMA & OMB Memorandum M-07-16***
2
Respectfully,
Jing Zhao
Cc: Martin P. Dunn at MDunn@mofo.com, Rose Zukin at RZukin@mofo.com
MORRISON I FOERSTER
January 14, 2016
2000 PENNSYLVANIA A VE., NW
WASHINGTON, D.C.
20006-1888
TELEPHONE: 202.887.1500
FACSIMILE: 202.887.0763
W\VW.MOFO.COM
VIA E-MAIL (sharelwlderproposals@sec.gov)
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549
Re: JPMorgan Chase & Co. Shareholder Proposal of Jing Zhao
Dear Ladies and Gentlemen:
MORRISON FOERSTER LLP
NE\\1 YORK, SA!\' FR1\NCJSCO,
LOS ANGELES, PALO AL TO,
SACRAMENTO, SAN DIEGO,
DEN\'ER, NORTHERN VIRGIN!:\,
\VASHINGTON, D.C.
TOKYO, LONDON, BERLIN, 13Rl'SSELS,
BEIJING, SHANGHAI, JIONG KONG,
SINGAPORE
Writer's Direct Contact +1(202)778.1611
MDunn@mofo.com
1934 Act/Rule 14a-8
We submit this letter on behalf of our client JPMorgan Chase & Co., a Delaware corporation (the "Company"), which requests confirmation that the staff (the "Sta.fl') of the Division of Corporation Finance of the U.S. Securities and Exchange Commission (the "Commission") will not rec01mnend enforcement action to the Commission if, in reliance on Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company omits the enclosed shareholder proposal (the "Proposaf') and supporting statement (the "Supporting Statement') submitted by Jing Zhao (the "Proponent") from the Company's proxy materials for its 2016 Annual Meeting of Shareholders (the "2016 Proxy Mate rials").
Pursuant to Rule 14a-8G) under the Exchange Act, we have:
• filed this letter with the Commission no later than eighty (80) calendar days before the Company intends to file its definitive 2016 Proxy Materials with the Commission; and
***FISMA & OMB MEMORANDUM M-07-16******FISMA & OMB MEMORANDUM M-07-16******FISMA & OMB MEMORANDUM M-07-16***
MORRISON I FOERSTER
Office of Chief Counsel Division of Corporation Finance U.S. Secmities and Exchange Commission January 14, 2016 Page 3
B. Tile Proposal May Be Omitted in Reliance On Rule 14a-8(i)(3), As It Is So Vague and Indefinite As To Be Materially False and Misleading
Rule 14a-8(i)(3) permits a company to omit a proposal or supporting statement, or portions thereof, that are contrary to any of the Commission's proxy rules, including Rule 14a-9, which prohibits materially false and misleading statements in proxy materials. Pmsuant to Staff Legal Bulletin No. 14B (Sept. 15, 2004), reliance on Rule 14a-8(i)(3) to exclude a proposal or portions of a supporting statement may be appropriate in only a few limited instances, one of which is when the language of the proposal or the supporting statement renders the proposal so vague or indefinite that "neither the stockholders voting on the proposal, nor the company in implementing the proposal (if adopted), would be able to determine with any reasonable certainty exactly what actions or measures the proposal requires." See Philadelphia Electric Company (Jul. 30, 1992). The Staff has further explained that a shareholder proposal can be sufficiently misleading and therefore excludable under Rule 14a-8(i)(3) when the company and its shareholders might interpret the proposal differently such that "any action ultimately taken by the [ c ]ompany upon implementation [of the proposal] could be significantly different from the actions envisioned by the shareholders voting on the proposal." Fuqua Industries, Inc. (Mar. 12, 1991).
If a proposal provides standards or criteria that a company is intended to follow, the proposal and supporting statement must provide reasonable certainty to both the company and its shareholders with regard to the meaning and operation of those standards and criteria; the proposal and supp01iing statement cannot provide guidance that is uncertain, vague, or overly general. The Staff has consistently concurred that specific standards that are integral to a proposal must be sufficiently explained in the proposal or supporting statement and, as such, when a proposal fails to adequately define key terms or provide sufficient guidance regarding the manner in which the proposal should be implemented, that proposal may be omitted as vague and indefinite. See, e.g., Morgan Stanley (Mar. 12, 2013) (concurring with the omission of a proposal requesting the appointment of a committee to explore "extraordinary transactions" that could enhance stockholder value was vague and indefinite); The Boeing Co. (Mar. 2, 2011) (concurring with the omission of a proposal as vague and indefinite where the proposal requested, among other things, that senior executives relinquish certain "executive pay rights" because such phrase was not sufficiently defined); AT&T Inc. (Feb. 16, 2010) (concurring with the omission of a proposal as vague and indefinite where the proposal sought disclosures on, among other things, payments for "grassroots lobbying" without sufficiently clarifying the meaning of that term); Puget Energy Inc. (Mar. 1, 2002) (concurring with the omission of a proposal as vague and indefinite where the proposal requested a policy of "improved corporate governance"); and Norfolk Southern Corp. (Feb. 13, 2002) (concurring with the omission of a proposal as vague and indefinite where the proposal requested that the board of directors "provide for a shareholder vote and ratification,
MORRISON I FOERSTER
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission January 14, 2016 Page4
in all future elections of Directors, candidates with solid background, experience, and records of demonstrated performance in key managerial positions within the transportation industry").
The Proposal provides that, in modifying its executive compensation philosophy to take into account relevant social factors, the Company's Compensation & Management Development Committee ("Compensation Committee") may consider "economic condition, unemployment and average income." The terms "economic condition" and "average income" are key to the Proposal because they are examples of the "social factors" that are to guide the Compensation Committee in revising its executive compensation philosophy to implement the Proposal. However, similar to the proposals in Morgan Stanley, Boeing and AT&T, the Proposal does not define or explain the meaning of these key terms. Rather, the terms "economic condition" and "average income" are unclear, undefined by the Proposal and without an ordinary, commonly understood meaning. While each of the words comprising these terms has an ordinary meaning in isolation, put together, the words in each phrase are likely to cause confusion as to what type of information is being referenced.
There is no indication in the Proposal as to whose "economic condition" or "average income" is being referenced in the Supporting Statement or the type of data the Company would use to determine "economic condition" and "average income." Indeed, given the Company's size and scope and the complexity of its operations, there are innumerable manners in which these terms could be defined. Further, even ifthere was a commonly understood means to define these terms, the application of that definition across the Company's operation would present significant variation in its application. In this regard, as a global financial services firm, the Company employs approximately 240,000 people, working in more than 60 countries and 2,100 U.S. cities across four major business segments. The "economic condition" and "average income" varies substantially among each U.S. city and each country. Further, many economic factors (e.g., gross domestic product, inflation and interest rates), individually and in the aggregate, can comprise "economic condition." Again, while the meaning of these terms is fundamentally unclear, even an understanding of the terms would not prevent the Proposal from being fundamentally false and misleading, as neither the Company nor its shareholders would have any level of reasonable certainty as to how changes to the Company's executive compensation philosophy could take into account multiple "economic conditions" or the "average income" among individuals employed across the globe. The vague references to "economic condition" and "average income" make it impossible for the Company and shareholders alike to determine the extent and nature of changes to be made to the executive compensation philosophy that the Proposal is seeking.
MORRISON I FOERSTER
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission January 14, 2016 Page 5
Accordingly, neither the shareholders voting on the Proposal, nor the Company in implementing the Proposal, would be able to understand with any reasonable certainty exactly what the revised executive compensation philosophy requires, based on the terms of the Proposal. The Company is, therefore, of the view that it may properly omit the Proposal and Supporting Statement in reliance on Rule 14a-8(i)(3), as it is so vague and indefinite as to be materially false and misleading.
C. The Proposal May Be Omitted In Reliance On Rule 14a-8(i)(7), As It Relates To The Company's Ordinary Business Operations
Rule 14a-8(i)(7) pe1mits a company to omit from its proxy materials a shareholder proposal that relates to the company's "ordinary business operations." According to the Commission, the underlying policy of the ordinary business exclusion is "to confine the resolution of ordinary business problems to management and the board of directors, since it is impracticable for shareholders to decide how to solve such problems at an annual shareholders meeting." Exchange Act Release No. 40018, Amendments to Rules on Shareholder Proposals, [1998 Transfer Binder] Fed. Sec. L. Rep. (CCH) 86,018, at 80,539 (May 21, 1998) (the "1998 Release"). In the 1998 Release, the Commission described the two "central considerations" for the ordinary business exclusion. The first is that certain tasks are "so fundamental to management's ability to run a company on a day-to-day basis that they could not, as a practical matter, be subject to direct shareholder oversight." The second consideration relates to "the degree to which the proposal seeks to 'micro-manage' the company by probing too deeply into matters of a complex nature upon which shareholders, as a group, would not be in a position to make an informed judgment." Id. at 86,017-18 (footnote omitted).
1. The Proposal Relates to Compensation That May Be Paid to Employees Generally and Is Not Limited to Compensation That May Be Paid to Senior Executive Officers and Directors
As noted in Staff Legal Bulletin No. 14A (July 12, 2002) ("SLB 14A"), proposals relating to employee compensation are a matter of ordinary business, and companies are permitted to omit proposals relating to such matters pursuant to Rule 14a-8(i)(7). The Staff has regularly concurred that proposals addressing both executive compensation and nonexecutive compensation relate to the fundamental business function of establishing general employee compensation. The Proposal is properly excludable as relating to general employee compensation because it is not limited to senior executive compensation. Although the Proposal references "an executive compensation philosophy," the Supporting Statement makes clear that the Proposal is not so limited. In this regard, the Supporting Statement references the role of the Company's Compensation Committee and states that the
MORRISON I FOERSTER
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission January 14, 2016 Page 6
Compensation Committee "assists the Board in its oversight of the Firm's compensation programs and reviews and approves the Firm's overall compensation philosophy and practices." The Supporting Statement also notes that the Committee "reviews and approves the Firm's compensation philosophy, which guides how the Firm's compensation plans and programs are designed." Further, the Supporting Statement's numerous references to the Proposal's intended impact upon "wage inequality" at the Company evidence its focus on compensation at all levels at the Company and not merely senior executive compensation.
The Compensation Committee would be responsible for implementing the Proposal. The Compensation Committee is responsible for making compensation decisions and establishing compensation policies affecting a much broader class of employees than just senior executives and directors. Notably, the charter of the Compensation Committee charges it with responsibility for "review[ing] and recommend[ing] employee equity-based plans," and to "approve all salary, short-term incentive compensation, and long-term incentive awards for," among others, "Section 16 officers" (emphasis added). In addition, the Company's annual performance management process related to more senior employeesboth executive officers and members of the general workforce-includes, among other tools, a standard, firm-wide survey to reinforce the Company's conduct and controls culture. As stated on page 21 of the Company's report How We Do Business, attached hereto as Exhibit B, the first question in that survey asks whether the employee exemplifies the highest standard of ethics and integrity. The Company's performance management process regarding compensation of senior employees not identified by the Company as executive officers illustrates the impact of ethical conduct on general employee compensation and, as such, demonstrates the effect of the Proposal on compensation of the Compariy' s general workforce. As the Proposal is directed to the Compensation Committee and the Supporting Statement references that Committee's role in general employee compensation and demonstrates the Proposal's intent to impact compensation across the Company, the Proposal relates, at least in part, to the Company's compensation of its general workforce.
The Staff has consistently concurred with the omission of similar proposals from company proxy materials as relating to ordinary business operations. Most recently, in Apple Inc. (Nov. 16, 2015), a substantially similar proposal to the Proposal at issue recommended that the company reform its compensation committee to include outside independent experts from the general public to adopt new compensation principles responsive to America's general economy, such as unemployment, working hours and wage inequality. The company expressed the view that the proposal could be excluded in reliance on Rule l 4a-8(i)(7), as the proposal "does not make any attempt to limit its scope to the compensation of senior executives and directors," and "is clearly intended to encourage the adoption of policies related to general employee compensation matters." The Staff concurred with the exclusion of the proposal under Rule l 4a-8(i)(7) as relating to the company's ordinary business
MORRISON I FOERSTER
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission January 14, 2016 Page 7
operations, noting "that the proposal relates to compensation that may be paid to employees generally and is not limited to compensation that may be paid to senior executive officers and directors." Further, in Yum! Brands, Inc. (Feb. 24, 2015), a proposal requested that the compensation committee initiate a review of the company's executive compensation policies and make available upon request a summary of the report, which may include a comparison of the total compensation package of the top senior executives and Yum employees' median wage, and an analysis of changes in the relative size of the gap along with an analysis and rationale justifying any trends evidenced. The Staff concmTed with the exclusion of the proposal under Rule 14a-8(i)(7) as relating to Yum's ordinary business operations, noting "that the proposal relates to compensation that may be paid to employees generally and is not limited to compensation that may be paid to senior executive officers and directors." In addition, in Microsoft Corp. (Sept. 17, 2013 ), a proposal required that the board of directors and/or compensation committee limit the average individual total compensation of senior management, executive and "all other employees the board is charged with determining compensation for" to one hundred times the average individual total compensation paid to the remaining full-time, non-contract employees of the Company. The Staff concurred with the exclusion of the proposal under Rule 14a-8(i)(7) as relating to Microsoft's ordinary business operations, indicating that "the proposal relates to compensation that may be paid to employees generally and is not limited to compensation that may be paid to senior executive officers and directors." See also Johnson Controls (Oct. 16, 2012) (Staff concurring in the exclusion of a proposal requesting that the managing officers of the company repay a portion of their compensation into a bonus pool that would be redistributed to other employees, noting that "the proposal relates to compensation that may be paid to employees generally and is not limited to compensation that may be paid to senior executive officers and directors"); Raytheon Co. (Mar. 11, 1998) (Staff concurring in the exclusion of a proposal urging the company's board of directors to (i) address the issue of "runaway remuneration of CEOs and the widening gap between highest paid and lowest paid" employees, and (ii) publish in its proxy materials the ratio between the total compensation paid to Raytheon's CEO and the total compensation paid to the company's lowest-paid U.S. worker, finding that the proposal related to the company's ordinary business operations).
In this case, although styled as directed towards executive compensation, the Proposal is not limited to executive compensation; it addresses the compensation of the general workforce and, therefore, may be excluded in reliance on Rule 14a-8(i)(7). The Proposal and Supporting Statement, by their terms, apply to general employee compensation matters.
Proposals that concern only senior executive officer and director compensation-as compared to general employee compensation-may not be excluded under Rule 14a-8(i)(7) as they involve "significant social policy issues" that transcend day-to-day business matters,
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Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission January 14, 2016 Page 8
and are appropriate for a shareholder vote. See SLB l 4A. However, where a proposal purports to address executive compensation, the Staff allows exclusion of the proposal under Rule 14a-8(i)(7) where the thrust and focus of the proposal relates to a matter of ordinary business. For example, in Exelon Corp. (Feb. 21, 2007), the Staff permitted exclusion of a proposal seeking to prohibit payment of bonuses to the company's executives to the extent that performance goals were achieved through a reduction in retirement benefits. In permitting exclusion, the Staff noted that "although the proposal mentions executive compensation, the thrust and focus of the proposal is on the ordinary business matter of general employee benefits." Similarly to Exelon, the Proposal in this case is focused on nonexecutive pay, an ordinary business matter. Adding references to executive pay in the "Resolved" clause to advocate the Proposal as a significant social policy issue is not persuasive. Accordingly, because the Proposal addresses general compensation matters, the Proposal is properly excludable under Rule 14a-8(i)(7) as relating to ordinary business matters.
2. The Proposal Relates to the Company's Code of Conduct and Code of Ethics for Finance Professionals
The Proposal may be properly omitted in reliance on Rule 14a-8(i)(7) because the action requested relates to the Company's Code of Conduct and Code of Ethics for Financial Professionals (collectively, the "Codes"). This analysis is clear given the express purpose of the Proposal-the requested compensation philosophy is intended to "improve the Firm's ethical conduct and public reputation." Accordingly, the Proposal relates, at least in part, to the Company's ethical practices and policies.
The Staff has consistently concuned with the omission of similar proposals from company proxy materials as relating to ordinary business operations. In The Walt Disney Co. (Dec. 12, 2011), a proposal requested a report on board compliance with Disney's Code of Business Conduct and Ethics for Directors, reporting, among other topics, "any violations of Disney's Codes of Conduct Policy that have occuned, if any." The Staff found that the proposal was excludable as relating to the Company's ordinary business operations, confirming that "[p ]roposals that concern general adherence to ethical business practices are generally excludable under [R]ule 14a-8(i)(7)." In Verizon Communications Inc. (Jan. 10, 2011 ), a proposal requested that the board of directors form a "Corporate Responsibility Committee" to monitor the extent to which Verizon lives up to its claims pertaining to integrity, trustworthiness, and reliability and the extent to which Verizon lives up to its Code of Business Conduct. The Staff found that the proposal was excludable as relating to the Company's ordinary business operations, stating that "[p]roposals that concern general adherence to ethical business practices are generally excludable under [R]ule 14a-8(i)(7)." Similarly, in International Business Machines Corp. (Jan. 7, 2010), a proposal requested that
MORRISON I FOERSTER
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission January 14, 2016 Page 9
officers "clearly and unambiguously restate and enforce the traditional standards of ethical behavior which characterized the way in which IBM conducted its business." The Staff, again, found that the proposal was excludable as relating to the Company's ordinary business operations, reinforcing that "[p ]roposals that concern general adherence to ethical business practices and policies are generally excludable under Rule 14a-8(i)(7)."
The Company's commitment to ethical business practices is reflected in, and substantially implemented through, the Codes, and any change in this area would require changes to the Codes. The Codes address employees' conduct as it relates to various social matters, including human rights, corporate responsibility, and environmental stewardship. One provision of the Codes requires those to whom it applies to observe the Company's Human Rights Statement, which is guided by the principles set forth in the United Nations Universal Declaration of Human Rights. Another provision of the Codes requires those to whom it applies to "support fundamental principles of human rights across all [of the Company's] Lines of Business and in each region of the world in which [the Company] operate[s]. ... [The Company] compl[ies] with employment laws in the markets where we operate." The Codes further require those to whom it applies to "get involved, contribute to charitable causes and help to build stronger relationships in the communities where [the Company] operates" and "[d]o your part to reduce the environmental impact of [the Company's] operations, in every community around the world where [the Company] does business." The Codes indicate that each person to whom the Codes apply "has a responsibility to uphold" the Codes, and compliance with the Codes' provisions "is a term and condition of employment with the Company." The Codes state that the Company "may take action against employees who violate" the Codes, "up to and including termination of employment. Where appropriate, [the Company] may also seek monetary damages and/or a court order prohibiting the employee from continuing to violate" the Codes. The Proposal, if implemented, would necessitate reconciling a revised compensation policy to the Codes. It is important for the Company to maintain managerial control over its workforce, which includes having control over the Codes. Accordingly, any determination regarding revision of the Codes is an ordinary business activity for the Company, as it is with all public companies.
Historically, the Staff has concurred with the omission of proposals that deal with a company's code of conduct or code of ethics under Rule 14a-8(i)(7). See, e.g., The Walt Disney Co., Verizon Communications Inc. and International Business Machines Corp. In NYNEX Corporation (Feb. 1, 1989), the Staff concurred with the omission of a proposal that sought to specify "the particular topics to be addressed in the Company's code of conduct" to be excludable. See also USX Corporation (Dec. 28, 1995) (concurring with the omission of a proposal seeking implementation of a Code of Ethics to establish a "pattern of fair play" in the dealings between the company and retired employees was excludable as relating to
MORRISON I FOERSTER
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission January 14, 2016 Page 10
ordinary business because it dealt with "the terms of a corporate Code of Ethics"); and Barnett Banks, Inc. (Dec. 18, 1995) (concurring with the omission of a proposal as relating to ordinary business where it dealt with "the preparation and publication of a Code of Ethics"). See also Intel Corporation (Mar. 18, 1999) (concurring with the omission of a proposal requesting that the board implement an "Employee Bill of Rights" because it related to the company's ordinary business operations (i.e., management of the workforce)).
Proposals that concern only senior executive officer and director compensation may not be excluded under Rule 14a-8(i)(7) as they involve "significant social policy issues" that transcend day-to-day business matters, and are appropriate for a shareholder vote. See Staff Legal Bulletin No. l 4A (July 12, 2002). However, where a proposal purports to address executive compensation, the Staff allows exclusion of the proposal under Rule 14a-8(i)(7) where the thrust and focus of the proposal relates to a matter of ordinary business. For example, in Delta Air Lines, Inc. (Mar. 27, 2012), the Staff permitted exclusion of a proposal requesting that the board initiate a program that prohibits payment under any incentive program for management or executive officers unless there is an appropriate process to fund the retirement accounts of retired pilots. In permitting exclusion, the Staff noted that "although the proposal mentions executive compensation, the thrust and focus of the proposal is on the ordinary business matter of employee benefits." Similarly to Delta, the Proposal in this case is focused on the Company's general adherence to ethical business practices, an ordinary business matter. Accordingly, as the Proposal relates to the Company's general adherence to ethical business practices and policies, and if adopted, the Proposal likely would require consideration and implementation of changes to the terms of the Company's Codes, it relates to the Company's ordinary business operations. The Company is, therefore, of the view that it may properly omit the Proposal and Supporting Statement from the 2016 Proxy Materials pursuant to Rule 14a-8(i)(7).
MORRISON I FOERSTER
Office of Chief Counsel Division of Corporation Finance U.S. Securities and Exchange Commission January 14, 2016 Page 11
III. CONCLUSION
For the reasons discussed above, the Company believes that it may properly omit the Proposal and Supporting Statement from its 2016 Proxy Materials in reliance on Rule 14a-8. As such, we respectfully request that the Staff concur with the Company's view and not recommend enforcement action to the Commission if the Company omits the Proposal and Supporting Statement from its 2016 Proxy Materials. If we can be of further assistance in this matter, please do not hesitate to contact me at (202) 778-1611.
Sincerely,
Martin P. Dunn of MmTison & Foerster LLP
Attachments
cc: Jing Zhao Anthony Horan, Corporate Secretary, JPMorgan Chase & Co.
EXHIBIT A
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Shareholder Proposal on Executive Compensation Philosophy
Resolved: shareholders recommend that JPMorgan Chase & Co. (the Firm) adopt a balanced executive compensation philosophy with social factors to improve the Firm's ethical conduct and
public reputation.
Supporting Statement
According to 2015 Proxy Statement, the Compensation & Management Development Committee ("CMDC") "assists the Board in its oversight of the Firm's compensation programs and reviews and approves the Firm's overall compensation philosophy and practices" (p.27). "The CMDC reviews and approves the Firm's compensation philosophy, which guides how the Firm's compensation plans and programs are designed for both the Operating Committee, ... " "The CMDC uses a disciplined pay-for-performance framework to make executive compensation decisions commensurate with Firm, line of business, and individual performance, while considering other relevant factors, including market practices" (p.38). As a result, for example, such a philosophy, without consideration of social factors, guided the CMDC to award our CEO a total compensation $27,701,709 in 2014, a 135% jump from 2013 (p.58).
Meanwhile, "[t]wo fifths of the population of developed countries have gained little over recent decades" (OECD Says Rise in Inequality Is Hmting Growth, Wall Street Journal May 22-24, 2015). Professor Thomas Piketty stated, "there is absolutely no doubt that the increase of inequality in the United States contributed to the nation's financial instability." (Capital in the Twenty-First Century. The Belknap Press of Harvard University Press, 2014. p.297) "Let me return now to the cause of rising inequality in the United States. The increase was largely the result of an unprecedented increase in wage inequality and in particular the emergence of extremely high remunerations at the summit of the wage hierarchy, particularly among top managers of large firms."(p.298) "[T]he financial professions are about twice as common in the very high income groups as in the economy overall." (p.303) "Because it is objectively difficult to measure individual contributions to a firm's output, top managers,found it relatively easy to persuade boards and stockholders that they were worth the money, especially since the members of compensation committees were often chosen in a rather incestuous manner." (p.510)
According to Senator Bernie Sanders: "Wall Street cannot continue to be an island unto itself, gambling trillions in risky financial instruments while expecting the public to bail it out." "The six largest financial institutions in this country today hold assets equal to about 60% of the nation's gross domestic product. These six banks issue more than two-thirds of all credit cards and over 35 percent of all mortgages. They control 95 percent of all derivatives and hold more than 40 percent of all bank deposits in the United States." "Our banking system must be part of the productive, job-creating productive economy." "If a bank is too big to fail, it is too big to exist. These institutions have acquired too much economic and political power, endangering our economy and our political process." (https://berniesanders.corn/issues/reforming-wall-street/)
For the purpose of this proposal, the Board or the CMDC has the flexibility to select social factors, such economic condition, unemployment and average income.
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Rule 14a-8 - Proposals of Security Holders
This section addresses when a company must include a shareholder's proposal in its proxy statement and identify the proposal in its form of proxy when the company holds an annual or special meeting of shareholders. In summary, in order to have your shareholder proposal included on a company's proxy card, and included along with any supporting statement in its proxy statement, you must be eligible and follow certain procedures. Under a few specific circumstances, the company is permitted to exclude your proposal, but only after submitting its reasons to the Commission. We structured this section in a question-and-answer format so that it is easier to understand. The references to "you" are to a shareholder seeking to submit the proposal.
(a) Question 1: What is a proposal? A shareholder proposal is your recommendation or requirement that the company and/or its board of directors take action, which you intend to present at a meeting of the company's shareholders. Your proposal should state as clearly as possible the course of action that you believe the company should follow. If your proposal is placed on the company's proxy card, the company must also provide in the form of proxy means for shareholders to specify by boxes a choice between approval or disapproval, or abstention. Unless otherwise indicated, the word "proposal" as used in this section refers both to your proposal, and to your corresponding statement in support of your proposal (if any).
(b) Question 2: Who is eligible to submit a proposal, and how do I demonstrate to the company that I am eligible? (1) In order to be eligible to submit a proposal, you must have continuously
held at least $2,000 in market value, or 1%, of the company's securities entitled to be voted on the proposal at the meeting for at least one year by the date you submit the proposal. You must continue to hold those securities through the date of the meeting.
(2) If you are the registered holder of your securities, which means that your name appears in the company's records as a shareholder, the company can verify your eligibility on its own, although you will still have to provide the company with a written statement that you intend to continue to hold the securities through the date of the meeting of shareholders. However, if like many shareholders you are not a registered holder, the company likely does not know that you are a shareholder, or how many shares you own. In this case, at the time you submit your proposal, you must prove your eligibility to the company in one of two ways:
(i) The first way is to submit to the company a written statement from the "record" holder of your securities (usually a broker or bank) verifying that, at the time you submitted your proposal, you continuously held the securities for at least one year. You must also include your own written statement that you intend to continue to hold the securities through the date of the meeting of shareholders; or
(ii) The second way to prove ownership applies only if you have filed a Schedule 130, Schedule 13G, Form 3, Form 4 and/or Form 5, or amendments to those documents or updated forms, reflecting your ownership of the shares as of or before the date on which the one-year eligibility period begins. If you have filed one of these documents with the SEC, you may demonstrate your eligibility by submitting to the company:
(A) A copy of the schedule and/or form, and any subsequent amendments reporting a change in your ownership level;
(8) Your written statement that you continuously held the required number of shares for the one-year period as of the date of the statement; and
(C) Your written statement that you intend to continue ownership of the shares through the date of the company's annual or special meeting.
(c) Question 3: How many proposals may I submit? Each shareholder may submit no more than one proposal to a company for a particular shareholders' meeting.
(d) Question 4: How long can my proposal be? The proposal, including any accompanying supporting statement, may not exceed 500 words.
(e) Question 5: What is the deadline for submitting a proposal? (1) If you are submitting your proposal for the company's annual meeting,
you can in most cases find the deadline in last year's proxy statement. However, if the company did not hold an annual meeting last year, or has changed the date of its meeting for this year more than 30 days from last year's meeting, you can usually find the deadline in one of the company's quarterly reports on Form 10-Q, or in shareholder reports of investment companies under Rule 270.30d-1 of this chapter of the Investment Company Act of 1940. In order to avoid controversy, shareholders should submit their proposals by means, including electronic means, that permit them to prove the date of delivery.
(2) The deadline is calculated in the following manner if the proposal is submitted for a regularly scheduled annual meeting. The proposal must be received at the company's principal executive offices not less than 120 calendar days before the date of the company's proxy statement released to shareholders in connection with the previous year's annual meeting. However, if the company did not hold an annual meeting the previous year, or if the date of this year's annual meeting has been changed by more than 30 days from the date of the previous year's meeting, then the deadline is a reasonable time before the company begins to print and send its proxy materials.
(3) If you are submitting your proposal for a meeting of shareholders other than a regularly scheduled annual meeting, the deadline is a reasonable time before the company begins to print and send its proxy materials.
(f) Question 6: What if I fail to follow one of the eligibility or procedural requirements explained in answers to Questions 1 through 4 of this section? (1) The company may exclude your proposal, but only after it has notified you
of the problem, and you have failed adequately to correct it. Within 14 calendar days of receiving your proposal, the company must notify you in writing of any procedural or eligibility deficiencies, as well as of the time frame for your response. Your response must be postmarked, or transmitted electronically, no later than 14 days from the date you received the company's notification. A company need not provide you such notice of a deficiency if the deficiency cannot be remedied, such as if you fail to submit a proposal by the company's properly determined deadline. If the company intends to exclude the proposal, it will later have to make a submission under Rule 14a-8 and provide you with a copy under Question 10 below, Rule 14a-8G).
(2) If you fail in your promise to hold the required number of securities through the date of the meeting of shareholders, then the company will be permitted to exclude all of your proposals from its proxy materials for any meeting held in the following two calendar years.
(g) Question 7: Who has the burden of persuading the Commission or its staff that my proposal can be excluded? Except as otherwise noted, the burden is on the company to demonstrate that it is entitled to exclude a proposal.
(h) Question 8: Must I appear personally at the shareholders' meeting to present the proposal? (1) Either you, or your representative who is qualified under state law to
present the proposal on your behalf, must attend the meeting to present the proposal. Whether you attend the meeting yourself or send a qualified representative to the meeting in your place, you should make sure that you, or your representative, follow the proper state law procedures for attending the meeting and/or presenting your proposal.
(2) If the company holds it shareholder meeting in whole or in part via electronic media, and the company permits you or your representative to present your proposal via such media, then you may appear through electronic media rather than traveling to the meeting to appear in person.
(3) If you or your qualified representative fail to appear and present the proposal, without good cause, the company will be permitted to exclude all of your proposals from its proxy materials for any meetings held in the following two calendar years.
(i) Question 9: If I have complied with the procedural requirements, on what other bases may a company rely to exclude my proposal?
(1) Improper under state law: If the proposal is not a proper subject for action by shareholders under the laws of the jurisdiction of the company's organization;
Note to paragraph (i)(1): Depending on the subject matter, some proposals are not considered proper under state law if they would be binding on the company if approved by shareholders. In our experience, most proposals that are cast as recommendations or requests that the board of directors take specified action are proper under state law. Accordingly, we will assume that a proposal drafted as a recommendation or suggestion is proper unless the company demonstrates otherwise.
(2) Violation of law: If the proposal would, if implemented, cause the company to violate any state, federal, or foreign law to which it is subject;
Note to paragraph (i)(2): We will not apply this basis for exclusion to permit exclusion of a proposal on grounds that it would violate foreign law if compliance with the foreign law could result in a violation of any state or federal law.
(3) Violation of proxy rules: If the proposal or supporting statement is contrary to any of the Commission's proxy rules, including Rule 14a-9, which prohibits materially false or misleading statements in proxy soliciting materials;
(4) Personal grievance; special interest: If the proposal relates to the redress of a personal claim or grievance against the company or any other person, or if it is designed to result in a benefit to you, or to further a personal interest, which is not shared by the other shareholders at large;
(5) Relevance: If the proposal relates to operations which account for less than 5 percent of the company's total assets at the end of its most recent fiscal year, and for less than 5 percent of its net earning sand gross sales for its most recent fiscal year, and is not otherwise significantly related to the company's business;
(6) Absence of power/authority: If the company would lack the power or authority to implement the proposal;
(7) Management functions: If the proposal deals with a matter relating to the company's ordinary business operations;
(8) Relates to election: If the proposal:
(i) Would disqualify a nominee who is standing for election;
(ii) Would remove a director from office before his or her term expired;
(iii) Questions the competence business judgment, or character of one or more nominees or directors;
(iv) Seeks to include a specif c individual in the company's proxy materials for election to the oard of directors; or
(v) Otherwise could affect the outcome of the upcoming election of directors.
(9) Conflicts with company's proposal: If the proposal directly conflicts with one of the company's own propos Is to be submitted to shareholders at the same meeting.
(10)
(11)
(12)
Note to paragraph (i)(9): A com any's submission to the Commission under this section should specify th points of conflict with the company's proposal.
Substantially implemented: If the company has already substantially implemented the proposal;
Note to paragraph (i)(10): A c mpany may exclude a shareholder proposal that would provide an a visory vote or seek future advisory votes to approve the compensatio~ of executives as disclosed pursuant to Item 402 of Regulation S-K or ny successor to Item 402 (a "say-onpay vote") or that relates to the fre uency of say-on-pay votes, provided that in the most recent shareholdelvote required by Rule 240.14a-21 (b) of this chapter a single year (i.e. one, two, or three years) received approval of a majority of votes cas on the matter and the company has adopted a policy on the frequency
1 f say-on-pay votes that is consistent
with the choice of the majority of votes cast in the most recent shareholder vote required by rule 2 0.14a-21(b) of this chapter.
Duplication: If the proposal subs antially duplicates another proposal previously submitted to the compa y by another proponent that will be included in the company's proxy ma erials for the same meeting;
matter as another proposal or prop · sals that has or have been previously included in the company's proxy ma erials within the preceding 5 calendar years, a company may exclude it fr' m its proxy materials for any meeting held within 3 calendar years of the ltst time it was included if the proposal received:
(i) Less than 3% of the vote if reposed once within the preceding 5 calendar years;
(ii) Less than 6% of the vote on its last submission to shareholders if proposed twice previously within the preceding 5 calendar years; or
(iii) Less than 10% of the vote on its last submission to shareholders if proposed three times or more previously within the preceding 5 calendar years; and
(13) Specific amount of dividends: If the proposal relates to specific amounts of cash or stock dividends.
U) Question 10: What procedures must the company follow if it intends to exclude my proposal? (1) If the company intends to exclude a proposal from its proxy materials, it
must file its reasons with the Commission no later than 80 calendar days before it files its definitive proxy statement and form of proxy with the Commission. The company must simultaneously provide you with a copy of its submission. The Commission staff may permit the company to make its submission later than 80 days before the company files its definitive proxy statement and form of proxy, if the company demonstrates good cause for missing the deadline.
(2) The company must file six paper copies of the following:
(i) The proposal;
(ii) An explanation of why the company believes that it may exclude the proposal, which should, if possible, refer to the most recent applicable authority, such as prior Division letters issued under the rule; and
(iii) A supporting opinion of counsel when such reasons are based on matters of state or foreign law.
(k) Question 11: May I submit my own statement to the Commission responding to the company's arguments? Yes, you may submit a response, but it is not required. You should try to submit any response to us, with a copy to the company, as soon as possible after the company makes its submission. This way, the Commission staff will have time to consider fully your submission before it issues its response. You should submit six paper copies of your response.
(I) Question 12: If the company includes my shareholder proposal in its proxy materials, what information about me must it include along with the proposal itself? (1) The company's proxy statement must include your name and address, as
well as the number of the company's voting securities that you hold. However, instead of providing that information, the company may instead include a statement that it will provide the information to shareholders promptly upon receiving an oral or written request.
(2) The company is not responsible for the contents of your proposal or supporting statement.
(m) Question 13: What can I do if the company includes in its proxy statement reasons why it believes shareholders should not vote in favor of my proposal, and I disagree with some of its statements? (1) The company may elect to include in its proxy statement reasons why it
believes shareholders should vote against your proposal. The company is allowed to make arguments reflecting its own point of view, just as you may express your own point of view in your proposal's supporting statement.
(2) However, if you believe that the company's opposition to your proposal contains materially false or misleading statements that may violate our anti-fraud rule, Rule 14a-9, you should promptly send to the Commission staff and the company a letter explaining the reasons for your view, along with a copy of the company's statements opposing your proposal. To the extent possible, your letter should include specific factual information demonstrating the inaccuracy of the company's claims. Time permitting, you may wish to try to work out your differences with the company by yourself before contacting the Commission staff.
(3) We require the company to send you a copy of its statements opposing your proposal before it sends its proxy materials, so that you may bring to our attention any materially false or misleading statements, under the following timeframes:
(i) If our no-action response requires that you make revisions to your proposal or supporting statement as a condition to requiring the company to include it in its proxy materials, then the company must provide you with a copy of its opposition statements no later than 5 calendar days after the company receives a copy of your revised proposal; or
(ii) In all other cases, the company must provide you with a copy of its opposition statements no later than 30 calendar days before its files definitive copies of its proxy statement and form of proxy under Rule 14a-6.
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Please see the attached shareholder proposal with my JPM shares letter to our 2016 meeting of shareholders. I also just sent to you via post mail.
Regards,
Jing Zhao
US-Japan-China Comparative Policy Research Institute
This communication is for informational purposes only. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. All market prices, data and other information are not warranted as to completeness or accuracy and are subject to change without notice. Any comments or statements made herein do not necessarily reflect those of JPMorgan Chase & Co., its subsidiaries and affiliates (collectively, "JPMC"). This transmission may contain information that is proprietary, privileged, confidential and/or exempt from disclosure under applicable law. If you are not the intended recipient, you are hereby notified that any disclosure, copying, distribution, or use of the information contained herein (including any reliance thereon) is STRICTLY PROHIBITED. If you received this transmission in error, please immediately contact the sender and destroy the material in its entirety, whether in electronic or hard copy format. Although this transmission and any attachments are believed to be free of any virus or other defect that might affect any computer system into which it is received and opened, it is the responsibility of the recipient to ensure that it is virus free and no responsibility is accepted by JPMC for any loss or damage arising in any way from its use. Please note that any electronic communication that is conducted within or through JPMC's systems is subject to interception, monitoring, review, retention and external production in accordance with JPMC's policy and local laws, rules and regulations; may be stored or otherwise processed in countries other than the country in which you are located; and will be treated in accordance with JPMC policies and applicable laws and regulations. Please refer to http://www.jpmorgan.com/pages/disclosures for disclosures relating to European legal entities.
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Shareholder Proposal on Executive Compensation Philosophy
Resolved: shareholders recommend that JPMorgan Chase & Co. (the Firm) adopt an executive compensation philosophy with consideration of relevant social factors to improve the Firm's ethical
conduct and public reputation.
Supporting Statement
According to 2015 Proxy Statement, the Compensation & Management Development Committee (CMDC) "assists the Board in its oversight of the Firm's compensation programs and reviews and approves the Firm's overall compensation philosophy and practices" (p.27). "The CMDC reviews and approves the Firm's compensation philosophy, which guides how the Firm's compensation plans and programs are designed". "The CMDC uses a disciplined pay-for-performance framework to make executive compensation decisions ... , while considering other relevant factors, including market practices" (p.38). Such a philosophy without consideration of social factors guided the CMDC to award our CEO total compensation $27,701,709 in 2014, 135% increase from 2013 (p.58).
Meanwhile, according to Wall Street Journal: "Two fifths of the population of developed countries have gained little over recent decades" (OECD Says Rise in Inequality Is Hurting Growth, May 22-24, 2015). According to Thomas Piketty's study Capital in the Twenty-First Century (The Belknap Press of Harvard University Press, 2014), "there is absolutely no doubt that the increase of inequality in the United States contributed to the nation's financial instability." (p.297) "The increase was largely the result of an unprecedented increase in wage inequality and in particular the emergence of extremely high remunerations at the summit of the wage hierarchy, particularly among top managers of large firms."(p.298) "The financial professions are about twice as common in the very high income groups as in the economy overall." (p.303) "Because it is objectively difficult to measure individual contributions to a firm's output, top managers found it relatively easy to persuade boards and stockholders that they were worth the money, especially since the members of compensation committees were often chosen in a rather incestuous manner." (p.510)
Many Americans agree with Senator Bernie Sanders: "The six largest financial institutions in this country today hold assets equal to about 60% of the nation's gross domestic product. These six banks issue more than two-thirds of all credit cards and over 35 percent of all mortgages. They control 95 percent of all derivatives and hold more than 40 percent of all bank deposits in the United States." "These institutions have acquired too much economic and political power, endangering our economy and our political process." "Our banking system must be part of the productive, job-creating productive economy." (https://berniesanders.com/issues/reforming-wall-street/)
For the purpose of this proposal, the Board or the CMDC has the flexibility to select relevant social factors, such as economic condition, unemployment and average income.
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the
Unite
d St
ates
and
man
y of
the
wor
ld’s
mos
t pro
min
ent c
orpo
rate
, ins
titut
iona
l and
go
vern
men
t clie
nts.
JPM
orga
n Ch
ase’
s ac
tiviti
es a
re o
rgan
ized
, for
man
agem
ent r
epor
ting
purp
oses
, int
o a
Corp
orat
e se
gmen
t and
fo
ur m
ajor
repo
rtab
le b
usin
ess
segm
ents
, whi
ch w
e re
fer
to a
s th
e lin
es o
f bus
ines
s.
Cons
umer
& C
omm
unit
y Ba
nkin
g ha
s a
rela
tions
hip
with
abo
ut 5
3 m
illio
n ho
useh
olds
— a
lmos
t hal
f of t
he
hous
ehol
ds in
the
Unite
d St
ates
. We
serv
e pe
ople
, fam
ilies
and
bus
ines
ses
acro
ss m
ultip
le c
hann
els
— m
ore
than
5,6
00 b
ranc
hes
and
20,5
00 A
TMs,
the
#1 r
anke
d m
obile
app
and
cha
se.c
om. W
e he
lp p
eopl
e ba
nk, s
ave,
in
vest
, mak
e pu
rcha
ses
with
cre
dit c
ards
, and
fina
nce
hom
es a
nd c
ars.
As
of S
epte
mbe
r 30
, 201
4, C
onsu
mer
&
Com
mun
ity B
anki
ng h
ad 1
39,0
00 e
mpl
oyee
s.
The
Corp
orat
e &
Inve
stm
ent B
ank
offer
s a
suite
of i
nves
tmen
t ban
king
, mar
ket-
mak
ing,
pri
me
brok
erag
e, a
nd
trea
sury
and
sec
uriti
es p
rodu
cts
and
serv
ices
to a
glo
bal c
lient
bas
e. In
gen
eral
, the
Cor
pora
te &
Inve
stm
ent
Bank
’s cl
ient
s ca
n be
cat
egor
ized
as:
mul
tinat
iona
ls, c
orpo
ratio
ns, g
over
nmen
tal e
ntiti
es, c
entr
al b
anks
and
as
set m
anag
ers
(e.g
., pe
nsio
n an
d he
dge
fund
s, fa
mily
offi
ces)
. The
re w
ere
52,0
00 e
mpl
oyee
s in
the
Corp
orat
e &
Inve
stm
ent B
ank
as o
f Sep
tem
ber
30, 2
014.
Com
mer
cial
Ban
king
pro
vide
s cr
edit,
ban
king
and
trea
sury
ser
vice
s to
app
roxi
mat
ely
59,0
00 c
lient
s in
th
e Un
ited
Stat
es a
cros
s 11
9 ci
ties
in th
e Un
ited
Stat
es a
nd 1
3 m
ajor
inte
rnat
iona
l citi
es. I
ts c
lient
s in
clud
e m
id-s
ized
bus
ines
ses,
cor
pora
tions
, mun
icip
aliti
es, fi
nanc
ial i
nstit
utio
ns, n
onpr
ofit e
ntiti
es, a
nd re
al e
stat
e ow
ners
and
inve
stor
s. C
omm
erci
al B
anki
ng h
ad 7,
000
empl
oyee
s on
Sep
tem
ber
30, 2
014.
Asse
t Man
agem
ent s
erve
s bo
th in
divi
dual
s an
d in
stitu
tions
, inc
ludi
ng m
ore
than
3,0
00 fi
nanc
ial
inte
rmed
iari
es, 6
0% o
f the
larg
est p
ensi
on a
nd s
over
eign
fund
s, a
nd m
any
of th
e w
orld
’s w
ealth
iest
indi
vidu
als
and
fam
ilies
. By
man
agin
g m
oney
for
clie
nts,
we
help
indi
vidu
als
retir
e m
ore
com
fort
ably
, pen
sion
fund
s m
eet
thei
r ob
ligat
ions
, uni
vers
ities
rein
vest
in re
sear
ch a
nd fa
cilit
ies,
and
wea
lthy
fam
ilies
ens
ure
last
ing
lega
cies
. O
n Se
ptem
ber
30, 2
014,
ther
e w
ere
19,0
00 e
mpl
oyee
s in
Ass
et M
anag
emen
t.
1H
OW
WE
DO
BU
SIN
ESS
— T
HE
REP
ORT
We
are
plea
sed
to s
hare
“H
ow W
e Do
Bus
ines
s —
The
Rep
ort,”
whi
ch d
escr
ibes
how
we
do
busi
ness
, act
ions
we’
ve ta
ken
to a
ddre
ss re
cent
cha
lleng
es a
nd w
hat w
e’re
doi
ng to
impr
ove.
Th
is re
port
was
initi
ated
in re
spon
se to
a re
ques
t by
a sh
areh
olde
r gr
oup
led
by T
he S
iste
rs o
f Ch
arity
of S
aint
Eliz
abet
h.
The
repo
rt d
etai
ls th
e m
any
larg
e-sc
ale
effor
ts a
nd in
vest
men
ts w
e’ve
mad
e to
str
engt
hen
our
cont
rol e
nviro
nmen
t thr
ough
enh
ance
men
ts o
f our
infr
astr
uctu
re, t
echn
olog
y, o
pera
ting
stan
dard
s an
d go
vern
ance
. It a
lso
desc
ribes
our
com
mitm
ent t
o ou
r cus
tom
ers,
as
wel
l as
our r
elat
ions
hips
w
ith re
gula
tors
, sha
reho
lder
s an
d th
e co
mm
uniti
es in
whi
ch w
e liv
e an
d w
ork.
Per
haps
mos
t im
port
ant,
we
talk
abo
ut o
ur p
eopl
e an
d ou
r cul
ture
. We
desc
ribe
how
we’
ve re
-art
icul
ated
and
re
-em
phas
ized
our
cor
pora
te s
tand
ards
and
wha
t we’
re d
oing
to h
elp
ensu
re th
at o
ur e
mpl
oyee
s in
tern
aliz
e th
ese
valu
es a
nd fo
cus
on th
em e
very
day
. In
that
sen
se, t
he re
port
is a
com
pani
on
piec
e to
our
Bus
ines
s Pr
inci
ples
, whi
ch w
ere
publ
ishe
d ea
rlie
r th
is y
ear
(and
are
sum
mar
ized
in
this
repo
rt).
Thos
e Bu
sine
ss P
rinc
iple
s fo
cus
on e
xcep
tiona
l clie
nt s
ervi
ce; o
pera
tiona
l exc
el-
lenc
e; a
com
mitm
ent t
o in
tegr
ity, f
airn
ess
and
resp
onsi
bilit
y; a
nd c
ultiv
atio
n of
a g
reat
team
and
w
inni
ng c
ultu
re. T
hey
emph
asiz
e th
e im
port
ance
of b
eing
a g
ood
corp
orat
e ci
tizen
and
alw
ays
tryi
ng to
do
the
righ
t thi
ng.
Whi
le w
e’re
pro
ud o
f wha
t we
do to
ser
ve o
ur c
lient
s, c
ontr
ibut
e to
our
com
mun
ities
and
ear
n a
fair
retu
rn fo
r sh
areh
olde
rs, w
e al
so k
now
that
we
alw
ays
can
do b
ette
r. Ev
ery
com
pany
mak
es
mis
take
s (a
nd w
e’ve
mad
e a
num
ber
of th
em),
but t
he h
allm
ark
of a
gre
at c
ompa
ny is
wha
t it
does
in re
spon
se. W
e ar
e st
eadf
ast i
n ou
r co
mm
itmen
t to
lear
n fr
om th
e pa
st a
nd to
em
erge
as
an e
ven
bett
er c
ompa
ny. I
enc
oura
ge y
ou to
read
this
repo
rt to
lear
n m
ore
abou
t the
kin
d of
co
mpa
ny w
e ar
e an
d ho
w w
e’re
wor
king
har
d to
be
bett
er e
ach
day.
Jam
ie D
imon
Ch
airm
an a
nd C
hief
Exe
cutiv
e O
ffice
r
Dece
mbe
r 19
, 201
4
HO
W W
E D
O B
USI
NES
S —
TH
E R
EPO
RT2 TA
BLE
OF
CON
TEN
TS
I. In
trod
ucti
on
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.
3
Ackn
owle
dgin
g ou
r m
ista
kes
and
mov
ing
forw
ard
..
..
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.
5
Wha
t we
are
doin
g to
impr
ove
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.
6
II.
Our
cor
pora
te c
ultu
re
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.
7
Com
mun
icat
ing
our
corp
orat
e st
anda
rds
.
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.
10
Lead
ersh
ip a
nd g
over
nanc
e .
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15
Our
em
ploy
ee li
fe c
ycle
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.
19
III.
Our
con
trol
env
iron
men
t .
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.
25
Enha
ncin
g go
vern
ance
.
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28
Firs
t lin
e of
def
ense
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30
Cont
rol f
unct
ions
.
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.
40
Inte
rnal
Aud
it .
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57
IV.
Our
cus
tom
er c
omm
itm
ent
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.
59
Cons
umer
& C
omm
unity
Ban
king
.
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6
1
Corp
orat
e &
Inve
stm
ent B
ank
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6
5
Com
mer
cial
Ban
king
.
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6
8
Asse
t Man
agem
ent
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70
V.
Our
rel
atio
nshi
ps w
ith
regu
lato
rs, s
hare
hold
ers
and
com
mun
itie
s .
..
..
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..
73
Regu
lato
rs
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.
75
Shar
ehol
ders
.
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78
Com
mun
ities
.
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8
0
VI.
A co
ntin
uing
eff
ort
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8
3
VII.
Appe
ndix
.
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8
7
Our
Bus
ines
s Pr
inci
ples
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.
89
Link
s to
JPM
orga
n Ch
ase
info
rmat
ion
..
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.
95
Repo
rt g
over
nanc
e an
d pr
ojec
t tea
m
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.
96
I. I
NTR
OD
UCT
ION
HO
W W
E D
O B
USI
NES
S —
INTR
OD
UCT
ION
5
ACK
NO
WLE
DG
ING
OU
R M
ISTA
KES
A
ND
MO
VIN
G F
OR
WA
RD
Dur
ing
the
past
sev
eral
yea
rs, w
e ha
ve fa
ced
a se
ries
of
lega
l and
reg
ulat
ory
issu
es. S
ome
of th
ese
issu
es
aros
e fr
om m
ista
kes
uniq
uely
our
ow
n, s
ome
rela
te to
ac
tions
take
n at
firm
s w
e ac
quir
ed d
urin
g th
e fin
anci
al
cris
is a
nd o
ther
s co
ncer
n in
dust
ry-w
ide
prac
tices
. Th
ese
incl
ude
mor
tgag
e fo
recl
osur
e pr
oces
ses,
m
ortg
age-
back
ed s
ecur
ities
mat
ters
, Ant
i-Mon
ey
Laun
deri
ng A
ct c
ompl
ianc
e, th
e M
adoff
mat
ter
and
loss
es in
our
Chi
ef In
vest
men
t Offi
ce (C
IO) (
ofte
n re
ferr
ed to
as
the
Lond
on W
hale
inci
dent
), as
wel
l as
Asia
hir
ing
prac
tices
, LIB
OR
(Lon
don
Inte
rban
k O
ffere
d Ra
te) a
nd fo
reig
n ex
chan
ge m
atte
rs.
The
first
ste
p in
mov
ing
forw
ard
is a
ckno
wle
dgin
g ou
r m
ista
kes.
We
have
don
e th
at. I
n so
me
case
s, o
ur
cont
rols
fell
shor
t, an
d in
oth
ers,
we
sim
ply
wer
en’t
mee
ting
the
stan
dard
s w
e ha
d se
t for
our
selv
es. W
e kn
ow w
e ca
n do
bet
ter
and
are
com
mitt
ed to
doi
ng s
o.
In p
ursu
ing
this
cou
rse
of a
ctio
n, w
e ar
e re
com
mitt
ing
to th
e co
mpa
ny’s
cul
ture
— n
ot r
einv
entin
g it.
Muc
h of
w
hat w
e ar
e do
ing
is a
con
tinua
tion
and
stre
ngth
enin
g of
pro
gram
s al
read
y in
pla
ce. T
he c
hang
es w
e ar
e un
dert
akin
g ar
e pa
rt o
f a n
eces
sary
evo
lutio
n an
d w
ill
cont
inue
as
we
mai
ntai
n ou
r lo
ng-s
tand
ing
pled
ge to
se
rve
our
cust
omer
s, s
hare
hold
ers
and
com
mun
ities
in
both
goo
d tim
es a
nd b
ad.
INTR
OD
UCT
ION
JPM
orga
n Ch
ase
has
serv
ed it
s cu
stom
ers,
sha
re-
hold
ers
and
com
mun
ities
for
mor
e th
an 2
00 y
ears
. Si
nce
we
wer
e fo
unde
d, o
ur c
ompa
ny h
as b
een
guid
ed
by a
sim
ple
mis
sion
that
per
haps
was
bes
t art
icul
ated
by
J. P
ierp
ont M
orga
n, J
r., in
193
3, w
hen
he s
aid:
“I
sho
uld
stat
e th
at a
t all
times
the
idea
of d
oing
onl
y fir
st-c
lass
bus
ines
s, a
nd th
at in
a fi
rst-
clas
s w
ay, h
as
been
bef
ore
our
min
ds.”
The
purp
ose
of th
is re
port
is to
offe
r our
sha
reho
lder
s an
d ot
her i
nter
este
d pa
rtie
s a
view
into
how
we
are
striv
ing
to m
eet t
hat m
issi
on b
oth
for t
oday
and
for t
he
futu
re. S
peci
fical
ly, w
e su
mm
ariz
e on
the
follo
win
g pa
ges:
our
corp
orat
e cu
ltur
e, in
clud
ing
impr
ovin
g ou
r em
ploy
ees’
un
ders
tand
ing
of a
nd a
dher
ence
to o
ur c
orpo
rate
st
anda
rds
and
step
s w
e ha
ve ta
ken
to e
nhan
ce o
ur
corp
orat
e st
ruct
ure
so th
at o
ur c
ompa
ny’s
lead
ersh
ip
is b
ette
r po
sitio
ned
to u
phol
d, e
xem
plify
and
enf
orce
th
ose
stan
dard
s ac
ross
the
ente
rpri
se
cont
rol e
nvir
onm
ent,
whi
ch s
tart
s w
ith o
ur b
usi-
ness
es a
nd is
sup
port
ed b
y ou
r co
ntro
l fun
ctio
ns a
nd
Inte
rnal
Aud
it, a
nd th
e in
vest
men
ts w
e ha
ve m
ade
in
peop
le, p
olic
ies
and
tech
nolo
gy to
enh
ance
it
our
cust
omer
co
mm
itm
ent,
incl
udin
g off
erin
g th
e pr
oduc
ts a
nd
serv
ices
our
cus
tom
ers
need
, bet
ter
coor
dina
ting
and
stre
amlin
ing
our
chan
nels
, and
mak
ing
it ea
sier
fo
r pe
ople
to d
o bu
sine
ss w
ith u
s
our
rela
tion
ship
s w
ith
regu
lato
rs,
shar
ehol
ders
and
com
mun
itie
s th
roug
h, a
mon
g ot
her
mea
sure
s, in
crea
sed
tran
spar
ency
and
mor
e re
gula
r en
gage
men
t
HO
W W
E D
O B
USI
NES
S —
INTR
OD
UCT
ION
6 WH
AT W
E A
RE
DO
ING
TO
IMP
RO
VE
Give
n th
e sc
ale
of c
hang
e an
d th
e nu
mbe
r of c
halle
nges
ou
r com
pany
has
face
d in
the
past
sev
eral
yea
rs, w
e be
lieve
it is
use
ful t
o pr
ovid
e a
view
of h
ow w
e do
bus
ines
s an
d w
hat w
e ha
ve d
one
and
cont
inue
to d
o to
impr
ove.
*
Our
act
ions
hav
e be
en fa
r-re
achi
ng, d
raw
ing
on w
hat
we
have
lear
ned
from
our
mis
step
s. S
elf-
exam
inat
ion
is v
ery
muc
h a
part
of t
he fa
bric
of o
ur c
ompa
ny, a
nd
our
com
mitm
ent t
o in
tegr
ity, f
airn
ess
and
resp
onsi
bilit
y gi
ves
us th
e fo
rtitu
de to
sta
y th
e co
urse
in a
ddre
ssin
g ou
r ch
alle
nges
.
We
have
take
n gr
eat c
are
to re
-art
icul
ate
and
re-e
mph
asiz
e ou
r cu
ltura
l val
ues
and
corp
orat
e st
anda
rds
cons
iste
ntly
an
d cl
earl
y so
they
can
be
inte
rnal
ized
by
empl
oyee
s an
d re
sult
in th
e ki
nds
of o
bser
vabl
e, e
thic
al b
ehav
iors
th
at w
e ex
pect
. Hig
h st
anda
rds,
str
ong
valu
es a
nd a
co
mm
itmen
t to
doin
g fir
st-c
lass
bus
ines
s in
a fi
rst-
clas
s w
ay m
ust r
emai
n in
grai
ned
in o
ur c
ompa
ny’s
DN
A. W
e do
this
by
sett
ing
the
tone
from
the
top;
hir
ing
and
reta
inin
g gr
eat,
dive
rse
empl
oyee
s; tr
aini
ng o
ur p
eopl
e at
eac
h st
age
of th
eir
care
er; d
isci
plin
ing
empl
oyee
s fo
r do
ing
the
wro
ng th
ing;
bui
ldin
g te
amw
ork
and
mor
ale;
co
mm
unic
atin
g ho
nest
ly, c
lear
ly a
nd c
onsi
sten
tly; a
nd
stri
ving
to b
e go
od le
ader
s.
We
also
hav
e in
vest
ed a
n ex
trao
rdin
ary
amou
nt o
f mon
ey,
tech
nolo
gy a
nd fo
cus
on o
ur c
ontr
ol a
gend
a to
pro
vide
th
e ne
cess
ary
infr
astr
uctu
re a
nd s
uppo
rt. W
e ha
ve h
ired
thou
sand
s of
per
sonn
el, i
nves
ted
hund
reds
of m
illio
ns o
f do
llars
in n
ew te
chno
logy
, and
impl
emen
ted
trai
ning
and
ed
ucat
ion
prog
ram
s th
at h
ave
touc
hed
ever
y si
ngle
one
of
our
roug
hly
240,
000
peop
le w
orki
ng in
mor
e th
an 6
0 co
untr
ies
and
2,10
0 U.
S. c
ities
.
As w
ith e
very
thin
g w
e do
, one
of t
he m
ost i
mpo
rtan
t go
als
for
us th
roug
hout
has
bee
n to
enh
ance
the
cust
omer
exp
erie
nce.
We
have
sou
ght t
o st
ep b
ack,
re
view
our
pra
ctic
es a
nd ta
ke a
fres
h pe
rspe
ctiv
e on
ho
w w
e ar
e se
rvin
g ou
r cu
stom
ers.
In d
oing
so,
eac
h of
ou
r bu
sine
sses
has
iden
tified
are
as in
whi
ch w
e co
uld
be
doin
g be
tter
and
has
take
n st
eps
to im
prov
e.
The
serv
ice
we
prov
ide
our
cust
omer
s is
onl
y pa
rt o
f the
va
lue
our
com
pany
see
ks to
cre
ate.
As
a gl
obal
fina
ncia
l in
stitu
tion,
we
have
the
oppo
rtun
ity
and
oblig
atio
n to
co
ntri
bute
to a
wel
l-fun
ctio
ning
glo
bal fi
nanc
ial s
yste
m,
deliv
er a
fair
ret
urn
to o
ur s
hare
hold
ers,
and
mak
e a
posi
tive
cont
ribu
tion
to th
e pe
ople
and
inst
itutio
ns
that
we
serv
e. O
ver
the
past
sev
eral
yea
rs, w
e ha
ve
been
dili
gent
ly w
orki
ng to
bui
ld a
dee
per
and
sust
aine
d en
gage
men
t with
thes
e pa
rtie
s, in
clud
ing
our
regu
lato
rs,
shar
ehol
ders
and
com
mun
ities
.
Ove
rall,
the
scal
e of
the
effor
ts d
escr
ibed
in th
is re
port
is
com
men
sura
te w
ith th
e si
ze a
nd b
read
th o
f our
com
pany
, w
hich
allo
ws
us to
ach
ieve
impo
rtan
t thi
ngs
for
our
cust
omer
s an
d co
mm
uniti
es. I
n 20
13 a
lone
, we
wer
e ab
le to
pro
vide
cre
dit a
nd ra
ise
capi
tal o
f mor
e th
an $
2.1
trill
ion
for o
ur c
lient
s, p
rovi
de $
19 b
illio
n of
cre
dit t
o sm
all
busi
ness
es, l
aunc
h a
$250
mill
ion
wor
kfor
ce d
evel
opm
ent
initi
ativ
e an
d do
nate
ove
r $2
10 m
illio
n to
our
com
mu-
nitie
s. O
ur e
mpl
oyee
s —
incl
udin
g th
e m
ore
than
7,70
0 ve
tera
ns a
nd s
ervi
ce m
embe
rs w
e ha
ve h
ired
sinc
e 20
11
— h
ave
been
at t
he c
ente
r of
thes
e eff
orts
, wor
king
sid
e by
sid
e w
ith c
usto
mer
s an
d pa
rtic
ipat
ing
in o
ver
540,
000
hour
s of
vol
unte
er w
ork
spon
sore
d an
d/or
trac
ked
by th
e co
mpa
ny in
201
3.
* Th
is re
port
was
initi
ated
in re
spon
se to
a re
ques
t fro
m a
sha
reho
lder
gro
up
led
by T
he S
iste
rs o
f Cha
rity
of S
aint
Eliz
abet
h, a
mem
ber
of th
e In
terf
aith
Ce
nter
on
Corp
orat
e Re
spon
sibi
lity.
The
Sis
ters
of C
hari
ty a
sked
us
for
“com
preh
ensi
ve tr
ansp
aren
cy re
gard
ing
the
chal
leng
es fa
ced
by th
e ba
nk a
nd
cont
rols
put
in p
lace
to a
ddre
ss th
em.”
The
inte
rest
of T
he S
iste
rs o
f Cha
rity
re
flect
s th
eir
unde
rsta
ndin
g th
at la
rge
finan
cial
inst
itutio
ns h
ave
the
capa
city
to
affe
ct th
e liv
es a
nd li
velih
ood
of m
any
peop
le g
loba
lly. T
he re
port
was
pr
epar
ed u
nder
the
dire
ctio
n of
our
Ope
ratin
g Co
mm
ittee
and
the
Boar
d of
Di
rect
ors’
Cor
pora
te G
over
nanc
e &
Nom
inat
ing
Com
mitt
ee. S
ee th
e Ap
pend
ix
on p
age
96 fo
r a
listin
g of
mem
bers
II.
OU
R C
OR
PO
RAT
E CU
LTU
RE
HO
W W
E D
O B
USI
NES
S —
INTR
OD
UCT
ION
8
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E9
OU
R C
OR
PO
RAT
E CU
LTU
RE
Corp
orat
e cu
lture
, whi
le o
ften
dis
cuss
ed, i
s di
fficu
lt to
de
fine.
To
us, c
ultu
re is
the
inte
rsec
tion
of o
ur c
orpo
rate
st
anda
rds
and
our e
mpl
oyee
s’ a
ctio
ns. T
hrou
gh o
ur
Busi
ness
Prin
cipl
es, C
ode
of C
ondu
ct a
nd C
ode
of E
thic
s fo
r Fin
ance
Pro
fess
iona
ls, w
e ha
ve fo
rmal
ized
cor
pora
te
stan
dard
s fo
r w
hich
all
of o
ur p
eopl
e ar
e he
ld a
ccou
nt-
able
. But
it is
not
eno
ugh
to h
ave
wel
l-art
icul
ated
st
anda
rds.
The
y m
ust b
e em
bedd
ed in
the
valu
es o
f ea
ch a
nd e
very
em
ploy
ee th
roug
h co
ntin
ued
trai
ning
an
d re
info
rcem
ent a
nd m
ust g
uide
and
be
evid
ent i
n ou
r ac
tions
.
Ove
r th
e pa
st fe
w y
ears
, we
have
und
erta
ken
a si
gnif-
ican
t effo
rt to
exa
min
e ho
w w
e ca
n m
ore
rigo
rous
ly
and
cons
iste
ntly
adh
ere
to th
e hi
gh e
thic
al s
tand
ards
ou
r sh
areh
olde
rs, r
egul
ator
s an
d ot
hers
exp
ect o
f us
and
that
we
have
for
ours
elve
s. T
hat i
nclu
des
sett
ing
and
clea
rly
artic
ulat
ing
busi
ness
pri
ncip
les,
ens
urin
g so
und
gove
rnan
ce a
nd th
e ri
ght t
one
from
the
top,
ha
ving
in p
lace
str
ong
lead
ersh
ip a
nd m
anag
emen
t pr
oces
ses,
and
pro
vidi
ng a
man
agem
ent d
evel
opm
ent
and
com
pens
atio
n fr
amew
ork
that
pro
perl
y in
cen-
tiviz
es a
ppro
pria
te b
ehav
iors
. Tak
en to
geth
er, t
hese
eff
orts
rep
rese
nt o
ur r
ecom
mitm
ent t
o th
e co
mpa
ny’s
cu
lture
and
refl
ect t
he lo
ng-t
erm
app
roac
h w
e ar
e ta
king
to e
nhan
ce it
.
As w
e co
ntin
ue o
ur w
ork,
we
have
focu
sed
our
atte
ntio
n on
thre
e ce
ntra
l obj
ectiv
es:
stan
dard
s to
our
ent
ire e
mpl
oyee
bas
e
so o
ur c
ompa
ny’s
lead
ersh
ip is
bet
ter
posi
tione
d to
up
hold
and
exe
mpl
ify th
ose
stan
dard
s ac
ross
the
ente
rpri
se
life
cycl
e, s
tart
ing
with
recr
uitin
g an
d hi
ring
and
ex
tend
ing
to tr
aini
ng, c
ompe
nsat
ing,
pro
mot
ing
and
disc
iplin
ing
our
empl
oyee
s
Whi
le w
e re
cent
ly h
ave
redo
uble
d an
d re
invi
gora
ted
our
wor
k ar
ound
cor
pora
te c
ultu
re, w
e kn
ow th
is c
an’t
be, a
nd c
erta
inly
don
’t th
ink
of it
as,
a o
ne-t
ime
effor
t. W
e re
cogn
ize
that
a s
ound
cor
pora
te c
ultu
re re
quire
s co
nsta
nt v
igila
nce
and
stea
dfas
t com
mitm
ent.
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E10 CO
MM
UN
ICAT
ING
OU
R C
OR
PO
RAT
E ST
AN
DA
RD
S
Effec
tive
corp
orat
e st
anda
rds
mus
t be
clea
rly
artic
-ul
ated
and
fully
und
erst
ood
by e
very
per
son
at th
e co
mpa
ny. T
he B
oard
and
sen
ior
man
agem
ent h
ave
been
dee
ply
invo
lved
in c
omm
unic
atin
g ou
r co
rpor
ate
stan
dard
s: m
akin
g su
re th
at a
ll of
our
em
ploy
ees
arou
nd
the
wor
ld —
from
ban
k te
llers
to in
vest
men
t ban
kers
—
are
prov
ided
with
cle
ar a
nd c
onsi
sten
t pre
sent
atio
ns
of o
ur c
orpo
rate
sta
ndar
ds a
nd th
at e
mpl
oyee
s ha
ve
regu
lar
oppo
rtun
ities
and
requ
irem
ents
to re
fres
h th
eir
fam
iliar
ity w
ith th
ese
stan
dard
s.
Infu
sing
and
mai
ntai
ning
con
sist
ent c
orpo
rate
sta
ndar
ds
in a
larg
e, d
iver
se g
loba
l org
aniz
atio
n is
cha
lleng
ing,
but
w
e be
lieve
the
chal
leng
e ca
n be
met
by
proc
esse
s w
e us
e to
com
mun
icat
e ou
r bus
ines
s ob
ject
ives
, sta
rtin
g w
ith c
lear
and
repe
ated
com
mun
icat
ion
of k
ey m
essa
ges
deliv
ered
by
firm
wid
e m
anag
emen
t and
rein
forc
ed b
y lin
e of
bus
ines
s, fu
nctio
nal a
nd re
gion
al m
anag
emen
t. To
be
fully
effe
ctiv
e, m
essa
ges
also
mus
t be
coup
led
with
act
ions
that
dem
onst
rate
our
com
mitm
ent t
o ou
r co
rpor
ate
stan
dard
s —
our
Bus
ines
s Pr
inci
ples
, Cod
e of
Co
nduc
t and
Cod
e of
Eth
ics
for F
inan
ce P
rofe
ssio
nals
—
and
we
desc
ribe
thes
e fu
rthe
r bel
ow.
Our
Bus
ines
s Pr
inci
ples
The
com
pany
’s O
pera
ting
Com
mitt
ee la
unch
ed a
pro
ject
in
the
fall
of 2
013
unde
r th
e le
ader
ship
of o
ur C
hair
man
an
d Ch
ief E
xecu
tive
Offi
cer
(CEO
) and
a g
roup
of o
ur
seni
or e
xecu
tives
to re
-exa
min
e, re
new
our
com
mitm
ent
to a
nd c
omm
unic
ate
our
core
bus
ines
s pr
inci
ples
.
The
initi
al p
hase
of t
he p
roje
ct w
as le
d by
a p
air
of
seni
or e
xecu
tives
, bot
h w
ell-r
ecog
nize
d w
ithin
the
com
pany
as
cultu
re c
arri
ers.
The
y in
terv
iew
ed o
ther
m
embe
rs o
f sen
ior
man
agem
ent f
or th
eir
view
s on
the
com
pany
’s cu
lture
and
pos
sibl
e st
eps
to re
info
rce
it.
They
als
o le
d th
e de
velo
pmen
t of c
ase
stud
ies
of is
sues
w
e ha
ve fa
ced,
incl
udin
g m
ista
kes
mad
e an
d le
sson
s le
arne
d th
roug
h ou
r ex
peri
ence
s w
ith fo
reig
n co
rre-
spon
dent
ban
king
; pay
day
lend
ing
over
draf
ts; c
lient
se
lect
ion
and
asso
ciat
ed re
gula
tory
and
repu
tatio
n ri
sk;
the
impo
rtan
ce o
f bal
anci
ng ra
pid
busi
ness
gro
wth
with
st
rong
con
trol
s; a
nd p
olic
ies
and
proc
edur
es d
esig
ned
to a
chie
ve c
ompl
ianc
e w
ith th
e Se
rvic
emem
bers
Civ
il Re
lief A
ct.
The
case
stu
dies
wer
e sh
ared
and
dis
cuss
ed d
urin
g ou
r 20
14 a
nnua
l sen
ior
lead
ers’
mee
ting,
whi
ch is
hos
ted
by o
ur C
EO a
nd a
tten
ded
by a
ppro
xim
atel
y 20
0 of
our
se
nior
-mos
t em
ploy
ees,
and
wer
e fo
llow
ed b
y fir
mw
ide
disc
ussi
ons
led
by o
ur C
EO a
nd th
ese
seni
or le
ader
s.
The
seni
or le
ader
s’ m
eetin
g an
d fo
llow
-up
sess
ions
th
roug
hout
the
com
pany
als
o st
ress
ed th
e im
port
ance
of
com
pany
lead
ers
carr
ying
thes
e m
essa
ges
to th
eir
team
s so
em
ploy
ees
thro
ugho
ut th
e co
mpa
ny w
ould
un
ders
tand
thei
r im
port
ance
.
The
proj
ect’s
sec
ond
phas
e w
as th
e re
-art
icul
atio
n of
20
core
pri
ncip
les
— o
ur B
usin
ess
Prin
cipl
es —
repr
esen
ting
four
cen
tral
cor
pora
te te
nets
:
1.
Exce
ptio
nal c
lient
ser
vice
2.
Ope
ratio
nal e
xcel
lenc
e
3.
A co
mm
itmen
t to
inte
grity
, fai
rnes
s an
d re
spon
sibi
lity
4. A
gre
at te
am a
nd w
inni
ng c
ultu
re
See
the
full
set o
f Bus
ines
s Pr
inci
ples
on
the
next
pag
e an
d in
the
Appe
ndix
sta
rtin
g on
pag
e 89
.
Thes
e pr
inci
ples
then
wer
e pu
blis
hed
as a
boo
klet
tit
led
“How
We
Do B
usin
ess”
and
dis
trib
uted
to e
very
em
ploy
ee a
cros
s th
e co
mpa
ny, a
s w
ell a
s po
sted
pro
mi-
nent
ly o
n th
e co
mpa
ny’s
intr
anet
and
Inte
rnet
site
s.
We
belie
ve th
at th
e Bu
sine
ss P
rinc
iple
s ar
e ce
ntra
l to
our
succ
ess
as a
com
pany
, and
we
have
em
bedd
ed
them
into
all
stag
es o
f our
tale
nt p
roce
ss: r
ecru
iting
, on
boar
ding
, tra
inin
g an
d pe
rfor
man
ce m
anag
emen
t. In
di
ssem
inat
ing
the
book
let,
care
was
take
n to
em
phas
ize
that
thes
e pr
inci
ples
mus
t gui
de o
ur c
ompa
ny a
nd e
ach
empl
oyee
as
we
stri
ve to
be
the
com
pany
that
we,
our
cu
stom
ers
and
our
shar
ehol
ders
exp
ect u
s to
be.
COM
MU
NIC
ATIN
G O
UR
CO
RPO
RAT
E ST
AN
DA
RD
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E11
Exce
ptio
nal c
lient
ser
vice
1.
Focu
s on
the
cust
omer
2.
Be fi
eld
and
clie
nt d
rive
n an
d op
erat
e at
the
loca
l lev
el
3.
Build
wor
ld-c
lass
fran
chis
es, i
nves
ting
for
the
long
term
, to
serv
e ou
r cl
ient
s
Ope
rati
onal
exc
elle
nce
4.
Set t
he h
ighe
st s
tand
ards
of p
erfo
rman
ce
5.
Dem
and
finan
cial
rig
or a
nd r
isk
disc
iplin
e: W
e w
ill a
lway
s m
aint
ain
a fo
rtre
ss b
alan
ce s
heet
6.
Stri
ve fo
r th
e be
st in
tern
al g
over
nanc
e an
d co
ntro
ls
7.
Act a
nd th
ink
like
owne
rs a
nd p
artn
ers
8.
Stri
ve to
bui
ld a
nd m
aint
ain
the
best
, mos
t effi
cien
t sys
tem
s an
d op
erat
ions
9.
Be d
isci
plin
ed in
eve
ryth
ing
we
do
10.
Exec
ute
with
bot
h sk
ill a
nd u
rgen
cy
A co
mm
itm
ent t
o in
tegr
ity,
fair
ness
and
res
pons
ibili
ty
11.
Do n
ot c
ompr
omis
e ou
r in
tegr
ity
12.
Face
fact
s
13.
Hav
e fo
rtitu
de
14.
Fost
er a
n en
viro
nmen
t of r
espe
ct, i
nclu
sive
ness
, hum
anity
and
hum
ility
15.
Hel
p st
reng
then
the
com
mun
ities
in w
hich
we
live
and
wor
k
A gr
eat t
eam
and
win
ning
cul
ture
16.
Hire
, tra
in a
nd re
tain
gre
at, d
iver
se e
mpl
oyee
s
17.
Build
team
wor
k, lo
yalty
and
mor
ale
18.
Mai
ntai
n an
ope
n, e
ntre
pren
euri
al m
erito
crac
y fo
r al
l
19.
Com
mun
icat
e ho
nest
ly, c
lear
ly a
nd c
onsi
sten
tly
20.
Stri
ve to
be
good
lead
ers
A m
ore
deta
iled
desc
ript
ion
of o
ur B
usin
ess
Prin
cipl
es c
an b
e fo
und
in th
e Ap
pend
ix s
tart
ing
on p
age
89.
The
JPM
orga
n Ch
ase
Busi
ness
Pri
ncip
les
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E11
COM
MU
NIC
ATIN
G O
UR
CO
RPO
RAT
E ST
AN
DA
RD
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
RPO
RAT
E CU
LTU
RE
12 Agai
n, s
peci
al a
tten
tion
was
giv
en to
com
mun
icat
ing
with
man
ager
s at
all
leve
ls o
f the
com
pany
so
they
w
ould
und
erst
and
the
prin
cipl
es a
nd c
omm
unic
ate
them
to
and
rein
forc
e th
em w
ith th
eir
empl
oyee
s. T
o as
sist
in
that
effo
rt, o
ur p
rinc
iple
s w
ere
rolle
d ou
t acr
oss
the
glob
e: S
enio
r m
anag
emen
t ran
tow
n ha
lls in
our
ke
y lo
catio
ns, T
V m
onito
rs in
com
mon
are
as a
nd o
ur
inte
rnal
new
spap
er fr
eque
ntly
incl
ude
the
prin
cipl
es,
copi
es o
f the
pri
ncip
les
are
in o
ur w
aitin
g ro
oms
and
lobb
ies,
and
a to
olki
t was
dev
elop
ed to
ena
ble
exec
u-tiv
es to
eng
age
thei
r em
ploy
ees
in c
onve
rsat
ions
and
fo
llow
-up
teac
h-in
s on
how
we
do b
usin
ess,
cul
ture
, co
nduc
t and
con
trol
s.
We
now
are
in a
thir
d ph
ase
of th
e pr
ojec
t. In
this
pha
se,
we
pilo
ted
a cu
lture
and
con
duct
ris
k pr
ogra
m in
the
Euro
pe, M
iddl
e Ea
st a
nd A
fric
a (E
MEA
) reg
ion,
whi
ch
we
then
laun
ched
for
the
Corp
orat
e &
Inve
stm
ent B
ank
(CIB
) glo
bally
. The
pro
gram
focu
ses
on k
ey d
rive
rs o
f be
havi
or b
eyon
d ju
st c
ontr
ols
and
way
s w
e ac
tivel
y m
anag
e ou
r cu
lture
. Thi
s eff
ort h
as in
volv
ed h
eari
ng
from
focu
s gr
oups
wha
t we
do w
ell a
nd w
hat w
e co
uld
do b
ette
r. W
e re
cogn
ize
that
som
etim
es th
ere
can
be
gaps
bet
wee
n w
hat s
enio
r m
anag
emen
t thi
nks
and
wha
t ot
hers
in a
n or
gani
zatio
n th
ink
abou
t the
ir c
ompa
ny’s
cultu
re. A
s pa
rt o
f thi
s pr
oces
s, w
e al
so a
sked
som
e of
ou
r m
ore
juni
or e
mpl
oyee
s fo
r th
eir
inpu
t. Th
is e
ffort
w
ill in
volv
e an
ass
essm
ent o
f con
duct
ris
ks, m
itiga
tion
plan
s ac
ross
thos
e ri
sks,
met
rics
and
trai
ning
.
To h
ave
a gl
obal
ly c
onsi
sten
t fra
mew
ork
and
ensu
re
that
our
cor
pora
te s
tand
ards
are
bro
adly
and
dee
ply
inte
grat
ed w
ithin
and
acr
oss
busi
ness
es a
nd g
eogr
a-ph
ies,
we
are
wor
king
tow
ard
esta
blis
hing
and
impl
e-m
entin
g a
firm
wid
e ap
proa
ch to
cul
ture
and
con
duct
. Th
is g
loba
l effo
rt w
ill le
vera
ge w
hat w
e ha
ve le
arne
d fr
om th
e EM
EA a
nd C
IB p
ilots
and
ada
pt th
e fir
mw
ide
appr
oach
to e
ach
line
of b
usin
ess.
We
also
are
re
view
ing
othe
r lin
e of
bus
ines
s cu
lture
and
con
duct
in
itiat
ives
and
will
use
som
e of
thei
r be
st p
ract
ices
to
enha
nce
the
firm
wid
e ap
proa
ch.
Code
of C
ondu
ct
If ou
r Bu
sine
ss P
rinc
iple
s pr
ovid
e th
e ro
ad m
ap fo
r ho
w a
ll em
ploy
ees
at JP
Mor
gan
Chas
e ar
e ex
pect
ed to
be
have
in th
eir
wor
k, o
ur C
ode
of C
ondu
ct (t
he C
ode)
is
desi
gned
to p
rovi
de th
e di
rect
ion
for
esse
ntia
l ele
men
ts
of th
at m
ap. A
s su
ch, o
ur C
ode
is o
ur c
ore
cond
uct
polic
y do
cum
ent.
We
have
und
erta
ken
a m
ajor
effo
rt o
ver
the
past
sev
eral
ye
ars
to m
ake
each
em
ploy
ee fa
mili
ar w
ith a
nd a
ble
to
appl
y th
e Co
de to
his
or
her
wor
k. A
ll ne
w h
ires
mus
t co
mpl
ete
Code
trai
ning
sho
rtly
aft
er th
eir
star
t dat
e.
All e
mpl
oyee
s ar
e re
quire
d to
com
plet
e ad
ditio
nal C
ode
trai
ning
and
pro
vide
a n
ew a
ffirm
atio
n of
thei
r co
mpl
i-an
ce w
ith th
e Co
de a
nnua
lly.
We
subs
tant
ially
rede
sign
ed th
e Co
de in
201
2 to
mak
e it
mor
e ac
cess
ible
to e
mpl
oyee
s, in
clud
ing
a re
new
ed
focu
s on
pla
in la
ngua
ge a
nd a
mor
e in
vitin
g fo
rmat
. W
e gr
oupe
d pr
ovis
ions
of t
he C
ode,
whi
ch is
ava
ilabl
e
on o
ur w
ebsi
te, i
nto
five
maj
or th
emes
:
To e
mph
asiz
e th
e im
port
ance
of c
ompl
ianc
e w
ith th
e Co
de, w
e al
so h
ave
unde
rtak
en s
yste
ms
enha
ncem
ents
th
at a
re d
esig
ned
to m
axim
ize
awar
enes
s an
d un
der-
stan
ding
of t
he C
ode,
alo
ng w
ith to
ols
to e
nabl
e re
spon
-si
ble
whi
stle
blow
ing.
Toda
y, C
ode
spec
ialis
ts a
re a
ssig
ned
to e
very
one
of
our
lines
of b
usin
ess,
cor
pora
te fu
nctio
ns a
nd re
gion
s to
ass
ist e
mpl
oyee
s w
ith a
ny q
uest
ion
on th
e Co
de o
r re
late
d po
licie
s.
COM
MU
NIC
ATIN
G O
UR
CO
RPO
RAT
E ST
AN
DA
RD
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E13
In a
dditi
on, w
e ha
ve u
nder
take
n a
num
ber
of s
teps
to
empo
wer
em
ploy
ees
to p
olic
e ad
here
nce
to o
ur C
ode.
W
e ha
ve m
ade
it ea
sier
for
empl
oyee
s to
repo
rt a
ny
know
n or
sus
pect
ed v
iola
tions
of t
he C
ode
via
the
Code
Re
port
ing
Hot
line
by p
hone
, web
, em
ail,
mai
l or
fax.
The
ho
tline
is a
nony
mou
s, e
xcep
t in
cert
ain
non-
U.S.
juri
s-di
ctio
ns w
here
law
s pr
ohib
it an
onym
ous
repo
rtin
g, a
nd
is a
vaila
ble
24/7
glo
bally
, with
tran
slat
ion
serv
ices
. It i
s m
aint
aine
d by
an
outs
ide
serv
ice
prov
ider
to e
nhan
ce
empl
oyee
con
fiden
tialit
y.
In s
uppo
rt o
f the
Cod
e, w
e m
aint
ain
coun
try-
spec
ific
w
hist
lebl
ower
pol
icie
s as
app
ropr
iate
, as
wel
l as
firm
wid
e hu
man
reso
urce
s po
licie
s aff
ordi
ng p
rote
c-tio
n fo
r the
goo
d fa
ith re
port
ing
of c
once
rns
rais
ed b
y em
ploy
ees.
We
also
pro
vide
trai
ning
to e
mpl
oyee
s in
ou
r Hum
an R
esou
rces
, Glo
bal I
nves
tigat
ions
and
Leg
al
depa
rtm
ents
rega
rdin
g th
e re
view
and
trea
tmen
t of
empl
oyee
-initi
ated
com
plai
nts,
incl
udin
g th
e pr
oper
es
cala
tion
of s
uspe
cted
or k
now
n vi
olat
ions
of t
he C
ode,
ot
her c
ompa
ny p
olic
y or
the
law
.
Code
of E
thic
s fo
r Fi
nanc
e Pr
ofes
sion
als
We
also
hav
e a
Code
of E
thic
s fo
r Fi
nanc
e Pr
ofes
sion
als
that
app
lies
to th
e CE
O, C
hief
Fin
anci
al O
ffice
r, Co
ntro
ller
and
all o
ther
pro
fess
iona
ls o
f the
com
pany
wor
ldw
ide
serv
ing
in a
fina
nce,
acc
ount
ing,
cor
pora
te tr
easu
ry,
tax
or in
vest
or re
latio
ns ro
le. T
he p
urpo
se o
f our
Cod
e of
Eth
ics
is to
pro
mot
e ho
nest
and
eth
ical
con
duct
and
co
mpl
ianc
e w
ith th
e la
w in
con
nect
ion
with
the
mai
nte-
nanc
e of
the
com
pany
’s fin
anci
al b
ooks
and
reco
rds
and
the
prep
arat
ion
of o
ur fi
nanc
ial s
tate
men
ts. E
mpl
oyee
s to
who
m th
e Co
de o
f Eth
ics
appl
ies
mus
t affi
rm
thei
r co
mpl
ianc
e w
ith th
e Co
de o
f Eth
ics
for
Fina
nce
Prof
essi
onal
s an
nual
ly w
hen
they
affi
rm c
ompl
ianc
e w
ith th
e Co
de o
f Con
duct
.
Mea
suri
ng s
ucce
ss
It is
our
goa
l to
even
mor
e de
eply
em
bed
our
corp
orat
e st
anda
rds
in o
ur d
aily
live
s. O
ne o
f the
way
s w
e in
tend
to
do
this
is th
roug
h th
e in
trod
uctio
n of
met
rics
to
mea
sure
our
per
form
ance
. The
se m
ay in
clud
e:
Clie
nt s
atis
fact
ion:
Res
earc
h cl
earl
y sh
ows
that
em
ploy
ees
who
feel
par
t of a
str
ong
wor
k cu
lture
“g
o th
e ex
tra
mile
” fo
r cl
ient
s. A
s su
ch, w
e ex
pect
im
prov
emen
ts in
our
em
ploy
ee c
ultu
re to
lead
to
mor
e sa
tisfie
d cl
ient
s.
Empl
oyee
sur
vey
resu
lts:
For
yea
rs, w
e ha
ve
cond
ucte
d em
ploy
ee s
urve
ys th
at in
clud
e qu
estio
ns
abou
t eth
ics
and
com
plia
nce.
With
this
yea
r’s s
urve
y,
we
bega
n be
nchm
arki
ng re
sults
on
thes
e to
pics
so
we
can
deve
lop
actio
n pl
ans
to a
ddre
ss o
ppor
tuni
ties
to s
tren
gthe
n cu
lture
whe
re th
e ne
ed a
rise
s.
Code
of C
ondu
ct is
sues
: We
incr
easi
ngly
trac
k is
sues
fo
und
thro
ugh
our
cont
rol p
roce
sses
rais
ed b
y em
ploy
ees
to th
eir
man
ager
s or
oth
ers
or re
port
ed
thro
ugh
our
Code
of C
ondu
ct h
otlin
e or
oth
er m
eans
.
Reg
ulat
ory
acti
ons:
Our
com
pany
’s pr
ogre
ss to
en
hanc
e ou
r cu
lture
will
be
mea
sure
d ag
ains
t the
go
al o
f red
ucin
g ad
vers
e re
gula
tory
eve
nts
so th
at
thos
e ev
ents
that
do
happ
en w
ill b
e re
cogn
ized
as
non-
syst
emic
bre
ache
s w
ithin
an
over
all s
tron
g co
ntro
l env
ironm
ent.
We
will
con
tinue
to re
info
rce
the
com
pany
’s cu
lture
an
d w
ill d
o so
for
the
bene
fit o
f our
clie
nts,
sha
reho
lder
s an
d co
mm
uniti
es.
COM
MU
NIC
ATIN
G O
UR
CO
RPO
RAT
E ST
AN
DA
RD
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
RPO
RAT
E CU
LTU
RE
14 Our
Inte
grity
Fir
st in
tran
et p
age
is e
asily
acc
essi
ble
to a
ll em
ploy
ees
from
a li
nk o
n th
e ho
me
page
of o
ur
inte
rnal
web
site
. It p
rovi
des
a w
ealth
of i
nfor
mat
ion
on
Case
stu
dy: I
nteg
rity
Fir
st
14H
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
RPO
RAT
E CU
LTU
RE
how
to p
rote
ct th
e fir
m a
nd it
s re
puta
tion,
incl
udin
g po
licie
s, w
hist
lebl
owin
g an
d re
port
ing
of h
otlin
e co
ntac
ts, a
nd d
escr
iptio
ns o
f our
con
trol
func
tions
.
COM
MU
NIC
ATIN
G O
UR
CO
RPO
RAT
E ST
AN
DA
RD
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E15
LEA
DER
SHIP
AN
D G
OV
ERN
AN
CE
Broa
dly
spea
king
, our
sen
ior
man
agem
ent t
eam
de
velo
ps th
e co
mpa
ny’s
stra
tegi
c di
rect
ion
and
over
sees
its
exe
cutio
n, w
hile
the
Boar
d is
cha
rged
with
pro
vidi
ng
effec
tive
over
sigh
t of m
anag
emen
t’s re
spon
sibi
litie
s.
Equa
lly im
port
ant,
the
Boar
d an
d th
e se
nior
man
age-
men
t tea
m a
re re
spon
sibl
e fo
r co
mm
unic
atin
g an
d en
forc
ing
the
com
pany
’s co
mm
itmen
t to
doin
g bu
sine
ss
in a
ccor
danc
e w
ith o
ur c
orpo
rate
sta
ndar
ds.
To fu
lfill
this
cor
e re
spon
sibi
lity,
it is
impe
rativ
e th
at o
ur
Boar
d an
d m
anag
emen
t tea
m b
e st
ruct
ured
and
ope
rate
in
a m
anne
r th
at is
fully
alig
ned
with
thes
e st
anda
rds.
Si
nce
the
finan
cial
cri
sis,
we
have
iden
tified
a n
umbe
r of
opp
ortu
nitie
s to
str
engt
hen
thos
e st
ruct
ures
, and
we
have
don
e so
.
Boar
d of
Dir
ecto
rs
A de
eply
eng
aged
Boa
rd o
f Dire
ctor
s is
vita
l to
our
com
pany
’s su
cces
s, a
nd o
ur d
irect
ors
brin
g a
stro
ng
com
bina
tion
of e
xper
ienc
e an
d ex
pert
ise
to th
eir
role
. O
ver
the
past
sev
eral
yea
rs, o
ur c
ompa
ny h
as lo
oked
at
way
s to
bui
ld u
pon
our
stro
ng fo
unda
tion
and
enha
nce
the
Boar
d’s
abili
ty to
hel
p le
ad o
ur c
ompa
ny fo
rwar
d.
Boar
d co
mpo
siti
on
Boar
d in
depe
nden
ce is
ess
entia
l to
effec
tive
gove
r-na
nce.
An
inde
pend
ent B
oard
ser
ves
the
inte
rest
s of
sha
reho
lder
s —
and
, in
the
case
of c
ompa
nies
like
ou
rs, t
he s
tabi
lity
of th
e fin
anci
al s
ervi
ces
syst
em —
by
effec
tivel
y ca
rryi
ng o
ut th
e fu
ndam
enta
l obl
igat
ion
of
over
sigh
t of m
anag
emen
t. Th
e Bo
ard
mus
t ass
ess
and
assi
st m
anag
emen
t by
aski
ng to
ugh
ques
tions
, mak
ing
or g
uidi
ng d
ifficu
lt de
cisi
ons
and
prov
idin
g an
effe
ctiv
e ch
alle
nge
to m
anag
emen
t on
an o
ngoi
ng b
asis
.
Our
gov
erna
nce
polic
ies
prov
ide
that
a s
ubst
an-
tial m
ajor
ity o
f our
Boa
rd w
ill b
e in
depe
nden
t, an
d,
curr
ently
, 10
of o
ur 1
1 Bo
ard
mem
bers
are
inde
pend
ent
unde
r th
e st
anda
rds
esta
blis
hed
by th
e N
ew Y
ork
Stoc
k Ex
chan
ge, a
s w
ell a
s ou
r ow
n in
tern
al s
tand
ards
.
In fu
rthe
ranc
e of
the
inde
pend
ence
of o
ur B
oard
, in
2013
, we
esta
blis
hed
the
Lead
Inde
pend
ent D
irect
or
role
. Our
Lea
d In
depe
nden
t Dire
ctor
is a
ppoi
nted
an
nual
ly b
y th
e in
depe
nden
t dire
ctor
s, a
nd th
e po
sitio
n in
clud
es th
e au
thor
ity a
nd re
spon
sibi
lity
to, a
mon
g ot
her
thin
gs, c
all a
Boa
rd m
eetin
g at
any
tim
e, a
ppro
ve
Boar
d m
eetin
g ag
enda
s, p
resi
de o
ver
exec
utiv
e se
ssio
ns
of in
depe
nden
t dire
ctor
s, a
nd g
uide
the
annu
al p
erfo
r-m
ance
eva
luat
ion
of th
e Ch
airm
an a
nd C
EO.
Our
Boa
rd a
lso
has
take
n st
eps
aim
ed a
t add
ress
ing
impo
rtan
t con
cern
s ra
ised
at o
ur a
nnua
l sha
reho
lder
m
eetin
g in
201
3. S
peci
fical
ly, a
num
ber
of s
hare
hold
ers
expr
esse
d a
desi
re fo
r th
e no
min
atio
n of
add
ition
al
dire
ctor
s w
ith e
xper
ienc
e in
ris
k m
anag
emen
t and
in
the
finan
cial
ser
vice
s in
dust
ry a
nd fo
r en
hanc
emen
ts to
ou
r co
rpor
ate
gove
rnan
ce p
ract
ices
. Tak
ing
into
acc
ount
th
at c
onst
ruct
ive
feed
back
, the
Boa
rd a
dded
, and
in M
ay
2014
sha
reho
lder
s el
ecte
d, tw
o ne
w B
oard
mem
bers
w
ith e
xper
ienc
e in
ris
k m
anag
emen
t and
the
finan
cial
se
rvic
es in
dust
ry.
Prac
tice
s an
d en
gage
men
t
In a
dditi
on to
the
chan
ges
desc
ribe
d ab
ove
unde
rsco
ring
th
e in
depe
nden
ce a
nd s
tren
gth
of th
e Bo
ard,
the
Boar
d co
ntin
ues
to c
onsi
der
and
impl
emen
t enh
ance
men
ts
to it
s ov
ersi
ght o
f man
agem
ent a
nd e
ngag
emen
t with
re
gula
tors
and
sha
reho
lder
s. It
has
form
aliz
ed a
num
ber
of im
prov
ed g
over
nanc
e pr
actic
es th
roug
h ch
ange
s to
th
e Bo
ard’
s Co
rpor
ate
Gove
rnan
ce P
rinc
iple
s, in
clud
ing
hold
ing
exec
utiv
e se
ssio
ns w
ithou
t com
pany
man
age-
men
t at e
very
regu
larl
y sc
hedu
led
Boar
d m
eetin
g an
d m
akin
g di
rect
ors
avai
labl
e, w
hen
appr
opri
ate,
for
cons
ulta
tion
with
maj
or s
hare
hold
ers
and
othe
r co
nstit
-ue
ncie
s. T
he B
oard
als
o ha
s en
dors
ed th
e Sh
areh
olde
r-
LEA
DER
SHIP
AN
D G
OV
ERN
AN
CEH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
RPO
RAT
E CU
LTU
RE
16 Dire
ctor
Exc
hang
e Pr
otoc
ol a
s a
guid
e fo
r eff
ectiv
e,
mut
ually
ben
efici
al e
ngag
emen
t bet
wee
n sh
areh
olde
rs
and
dire
ctor
s (s
ee p
age
78 fo
r m
ore
info
rmat
ion
abou
t th
e pr
otoc
ol).
In a
dditi
on, t
he B
oard
has
take
n m
eani
ngfu
l ste
ps to
se
e th
at re
gula
tory
obl
igat
ions
are
met
. Thi
s in
clud
es
esta
blis
hing
Spe
cific
Pur
pose
com
mitt
ees
to p
rovi
de
requ
ired
over
sigh
t in
conn
ectio
n w
ith c
erta
in re
gula
tory
or
ders
issu
ed b
y th
e Fe
dera
l Res
erve
and
the
Offi
ce o
f th
e Co
mpt
rolle
r of
the
Curr
ency
:
Com
plia
nce
Com
mitt
ee
Each
of t
hese
Spe
cific
Pur
pose
com
mitt
ees
has
betw
een
two
and
four
inde
pend
ent d
irect
ors.
The
y m
eet
regu
larl
y to
pro
vide
ove
rsig
ht o
f pro
gres
s ag
ains
t iss
ues
iden
tified
und
er th
e ap
plic
able
regu
lato
ry o
rder
.
In a
dditi
on to
thes
e co
mm
ittee
s, in
201
2, th
e Bo
ard
esta
blis
hed
a Re
view
Com
mitt
ee to
ove
rsee
an
inve
sti-
gatio
n by
the
com
pany
’s Ta
sk F
orce
and
to c
ondu
ct it
s ow
n re
view
of r
isk
man
agem
ent o
vers
ight
rela
ting
to th
e tr
adin
g lo
sses
in o
ur C
hief
Inve
stm
ent O
ffice
. In
Janu
ary
2013
, the
Rev
iew
Com
mitt
ee p
rodu
ced
its o
wn
repo
rt,
publ
ishe
d by
the
Boar
d, th
at in
clud
ed it
s fin
ding
s an
d re
com
men
datio
ns in
tend
ed to
str
engt
hen
the
com
pany
’s ov
eral
l ris
k m
anag
emen
t fun
ctio
n an
d Bo
ard
over
sigh
t of
that
func
tion.
Reco
mm
enda
tions
incl
uded
, am
ong
othe
r thi
ngs,
im
prov
ing
the
pres
enta
tion
of in
form
atio
n to
the
Boar
d of
Dire
ctor
s’ R
isk
Polic
y Co
mm
ittee
, cla
rifyi
ng th
e re
spec
-tiv
e ro
les
of th
at c
omm
ittee
and
the
Audi
t Com
mitt
ee,
enha
ncin
g th
e co
ntin
ued
inde
pend
ence
of t
he C
hief
Ris
k Offi
cer,
and
mak
ing
clea
r to
seni
or m
anag
emen
t tha
t the
pe
rfor
man
ce m
anag
emen
t pro
cess
tied
to c
ompe
nsat
ion
shou
ld in
clud
e an
ass
essm
ent o
f em
ploy
ees’
adh
eren
ce to
ap
plic
able
con
trol
sta
ndar
ds a
nd p
rom
otio
n of
com
pany
st
anda
rds.
The
com
pany
has
impl
emen
ted
and
cont
inue
s to
impl
emen
t the
com
mitt
ee’s
reco
mm
enda
tions
(cop
ies
of th
e Ta
sk F
orce
Rep
ort a
nd th
e Re
view
Com
mitt
ee
Repo
rt a
re a
vaila
ble
on o
ur w
ebsi
te).
The
Boar
d al
so u
nder
stan
ds th
e cr
itica
l rol
e it
play
s w
ith
resp
ect t
o th
e co
mpa
ny’s
cultu
re. T
he B
oard
has
bee
n en
gage
d w
ith m
anag
emen
t on
the
impo
rtan
ce o
f str
ong
corp
orat
e st
anda
rds,
wor
king
with
man
agem
ent t
o em
phas
ize
the
com
pany
’s co
mm
itmen
t to
doin
g th
ings
th
e ri
ght w
ay a
nd to
est
ablis
hing
a c
lear
and
com
mon
vo
cabu
lary
for
com
mun
icat
ing
this
com
mitm
ent.
Our d
irect
ors
enga
ge fr
eque
ntly
on
the
topi
c of
cul
ture
in
Boa
rd a
nd B
oard
com
mitt
ee m
eetin
gs, i
nclu
ding
in
the
Spec
ific
Purp
ose
com
mitt
ees,
in th
eir o
vers
ight
of
prog
ress
add
ress
ing
regu
lato
ry o
rder
issu
es. E
ngag
emen
t w
ork
also
incl
udes
the
Audi
t Com
mitt
ee’s
over
sigh
t of t
he
Code
of C
ondu
ct p
rogr
am, a
s w
ell a
s th
e Co
mpe
nsat
ion
& M
anag
emen
t Dev
elop
men
t Com
mitt
ee’s
revi
ew a
nd
appr
oval
of t
he c
ompa
ny’s
com
pens
atio
n an
d pe
rfor
-m
ance
man
agem
ent p
roce
ss. D
irect
ors
also
hig
hlig
ht
the
impo
rtan
ce o
f our
cor
pora
te s
tand
ards
thro
ugh
part
icip
atio
n in
less
form
al s
ettin
gs, s
uch
as to
wn
hall
and
othe
r mee
tings
hel
d by
the
lines
of b
usin
ess
and
othe
r fun
ctio
ns fo
r em
ploy
ees
and/
or le
ader
ship
team
s,
annu
al m
eetin
gs w
ith th
e co
mpa
ny’s
seni
or le
ader
s, a
nd
regu
larly
sch
edul
ed in
form
al s
essi
ons
with
mem
bers
of
the
Oper
atin
g Co
mm
ittee
and
oth
er s
enio
r lea
ders
.
LEA
DER
SHIP
AN
D G
OV
ERN
AN
CE
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E17
Man
agem
ent
Our m
anag
emen
t str
uctu
re is
des
igne
d to
enh
ance
our
ab
ility
to le
ad th
e co
mpa
ny e
ffect
ivel
y as
a w
hole
, as
wel
l as
eac
h of
our
bus
ines
ses,
in a
man
ner t
hat p
rom
otes
a
stro
ng c
orpo
rate
cul
ture
and
is c
onsi
sten
t with
our
co
rpor
ate
stan
dard
s. W
e ha
ve fo
und
that
the
mos
t eff
ectiv
e ap
proa
ch is
to m
anag
e on
a li
ne o
f bus
ines
s ba
sis,
cou
pled
with
str
ong
corp
orat
e fu
nctio
ns a
nd
appr
opria
te g
over
nanc
e of
the
com
pany
’s su
bsid
iarie
s.
JPM
orga
n Ch
ase
is o
rgan
ized
into
four
prim
ary
lines
of
busi
ness
: Con
sum
er &
Com
mun
ity B
anki
ng, C
orpo
rate
&
Inve
stm
ent B
ank,
Com
mer
cial
Ban
king
and
Ass
et
Man
agem
ent.
In a
dditi
on, t
he C
orpo
rate
seg
men
t is
the
foca
l poi
nt fo
r set
ting
and
impl
emen
ting
stan
dard
s fo
r fin
anci
al m
anag
emen
t, ca
pita
l allo
catio
n, li
quid
ity, r
eso-
lutio
n pl
anni
ng, r
isk
man
agem
ent,
cont
rols
, reg
ulat
ory
mat
ters
, hum
an re
sour
ces
mat
ters
, tec
hnol
ogy,
and
lega
l an
d co
mpl
ianc
e.
The
man
agem
ent s
truc
ture
of e
ach
line
of b
usin
ess
mirr
ors
that
of t
he c
ompa
ny a
s a
who
le. E
ach
is le
d by
a
CEO
and
has
a Ch
ief F
inan
cial
Offi
cer,
Chie
f Ris
k Offi
cer,
Chie
f Com
plia
nce
Office
r, Ch
ief C
ontr
ol O
ffice
r, Ge
nera
l Co
unse
l, Hu
man
Res
ourc
es E
xecu
tive
and
Chie
f Aud
itor.
Each
line
of b
usin
ess
also
has
a M
anag
emen
t Com
mitt
ee,
a Ri
sk C
omm
ittee
and
a C
ontr
ol C
omm
ittee
.
LEA
DER
SHIP
AN
D G
OV
ERN
AN
CE
Not
e: N
ot a
ll di
rect
repo
rts
to Ja
mie
Dim
on a
re s
how
n; d
irect
repo
rts
to li
ne o
f bus
ines
s CE
Os
incl
ude
busi
ness
and
regi
onal
hea
ds o
nly
Ashl
ey B
acon
Chie
f Ris
k Offi
cer
22 y
ears
at J
PMor
gan
Chas
e22
in in
dust
ry
Stev
e Cu
tler
Gene
ral C
ouns
el
8 ye
ars
at JP
Mor
gan
Chas
e14
in in
dust
ry
John
Don
nelly
Head
of H
uman
Reso
urce
s 6
year
s at
JPM
orga
n Ch
ase
36 in
indu
stry
Mar
iann
e La
ke
Chie
f Fin
anci
al O
ffice
r 15
yea
rs a
t JPM
orga
n Ch
ase
23 in
indu
stry
Mat
t Zam
es
Chie
f Ope
ratin
g Offi
cer
10 y
ears
at J
PMor
gan
Chas
e22
in in
dust
ry
Jam
ie D
imon
Chai
rman
and
Chi
ef E
xecu
tive
Office
r
6 di
rect
rep
orts
Aver
age
indu
stry
exp
erie
nce
~26
year
sAv
erag
e ye
ars
at th
e co
mpa
ny
~1
4 ye
ars
1-
9
10-1
9
20+
Tenu
re a
t JPM
orga
n Ch
ase
(yea
rs)
2
3
1
Gord
on S
mith
Chie
f Exe
cutiv
e Offi
cer,
Co
nsum
er &
Com
mun
ity B
anki
ng8
year
s at
JPM
orga
n Ch
ase
33 in
indu
stry
7 di
rect
rep
orts
Aver
age
indu
stry
exp
erie
nce
~2
9 ye
ars
Aver
age
year
s at
the
com
pany
~2
2 ye
ars
1-
9
10-1
9
20+
Tenu
re a
t JPM
orga
n Ch
ase
(yea
rs)
Dou
g Pe
tno
Chie
f Exe
cutiv
e Offi
cer,
Co
mm
erci
al B
anki
ng25
yea
rs a
t JPM
orga
n Ch
ase
25 in
indu
stry
11
5
15 d
irec
t rep
orts
Aver
age
indu
stry
exp
erie
nce
~2
5 ye
ars
Aver
age
year
s at
the
com
pany
~16
year
s
1-
9
10-1
9
20+
Tenu
re a
t JPM
orga
n Ch
ase
(yea
rs)
Dan
iel P
into
Chie
f Exe
cutiv
e Offi
cer,
Co
rpor
ate
& In
vest
men
t Ban
k31
yea
rs a
t JPM
orga
n Ch
ase
31 in
indu
stry
4
5
6
4 di
rect
rep
orts
Aver
age
indu
stry
exp
erie
nce
~2
3 ye
ars
Aver
age
year
s at
the
com
pany
~19
year
s
1-
9
10-1
9
20+
Tenu
re a
t JPM
orga
n Ch
ase
(yea
rs)
Mar
y Er
does
Chie
f Exe
cutiv
e Offi
cer,
As
set M
anag
emen
t19
yea
rs a
t JPM
orga
n Ch
ase
25 in
indu
stry
12
1
Ope
rati
ng C
omm
itte
e st
ruct
ure
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E18 Th
e lin
e of
bus
ines
s CE
Os s
it on
the
com
pany
’s Op
erat
ing
Com
mitt
ee, t
he c
ompa
ny’s
mos
t sen
ior m
anag
emen
t bo
dy, w
hich
als
o in
clud
es o
ur C
hairm
an a
nd C
EO, C
hief
Op
erat
ing
Office
r, Ch
ief F
inan
cial
Offi
cer,
Chie
f Ris
k Offi
cer,
Gene
ral C
ouns
el a
nd h
ead
of H
uman
Res
ourc
es.
The
Oper
atin
g Co
mm
ittee
is re
spon
sibl
e fo
r the
ove
rall
man
agem
ent o
f the
com
pany
, inc
ludi
ng d
evel
opin
g an
d im
plem
entin
g co
rpor
ate
stra
tegy
and
man
agin
g th
e co
mpa
ny’s
oper
atio
ns.
The
prev
ious
pag
e in
clud
es a
sch
emat
ic re
flect
ing
the
Ope
ratin
g Co
mm
ittee
str
uctu
re.
Each
line
of b
usin
ess
has
full
resp
onsi
bilit
y fo
r al
l as
pect
s of
its
busi
ness
, inc
ludi
ng fo
rmul
atio
n of
st
rate
gy, m
anag
emen
t of a
lloca
ted
capi
tal,
finan
cial
re
port
ing,
hum
an re
sour
ces,
ris
k, c
ontr
ol a
nd a
dher
ence
to
cor
pora
te s
tand
ards
. The
line
of b
usin
ess
CEO
s re
view
th
eir
resp
ectiv
e bu
sine
sses
with
the
Boar
d of
Dire
ctor
s,
esta
blis
h pr
iori
ties
for
each
yea
r, an
d re
port
per
iodi
cally
on
bus
ines
s re
sults
, ris
k m
atte
rs a
nd c
ontr
ol is
sues
.
In a
dditi
on to
our
line
s of
bus
ines
s go
vern
ance
str
uc-
ture
s, e
ach
of o
ur le
gal e
ntiti
es h
as a
Boa
rd o
f Dire
ctor
s an
d a
man
agem
ent t
eam
, gen
eral
ly d
raw
n fr
om th
e lin
es o
f bus
ines
s or
cor
pora
te fu
nctio
ns p
rinc
ipal
ly
resp
onsi
ble
for
such
ent
ity. F
or e
xam
ple,
som
e of
ou
r na
tiona
l ban
k su
bsid
iari
es, i
nclu
ding
JPM
orga
n Ch
ase
Bank
, N.A
., ha
ve th
eir
own
sepa
rate
Boa
rd a
nd
Ope
ratin
g Co
mm
ittee
.
Furt
herm
ore,
in S
epte
mbe
r 20
14, t
he O
ffice
of t
he
Com
ptro
ller
of th
e Cu
rren
cy fi
naliz
ed H
eigh
tene
d St
anda
rds
for
natio
nal b
anks
, whi
ch s
et m
inim
um
stan
dard
s fo
r th
e de
sign
and
impl
emen
tatio
n of
a r
isk
gove
rnan
ce fr
amew
ork
that
is o
vers
een
by a
ban
k’s
Boar
d of
dire
ctor
s. W
e ar
e ut
ilizi
ng th
e fir
mw
ide
busi
ness
, ris
k an
d co
ntro
l fra
mew
orks
to th
e ex
tent
po
ssib
le to
mee
t the
se s
tand
ards
, whi
le re
cogn
izin
g ou
r di
stin
ct re
spon
sibi
lity
to m
aint
ain
the
safe
ty a
nd
soun
dnes
s of
JPM
orga
n Ch
ase
Bank
, N.A
., an
d th
e sa
nctit
y of
its
char
ter.
LEA
DER
SHIP
AN
D G
OV
ERN
AN
CE
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E19
In 2
013
, glo
bally
, 48%
of o
ur n
ew
hire
s w
ere
wom
en, a
nd in
the
Uni
ted
Stat
es, 5
5% o
f our
hir
es w
ere
raci
ally
or e
thni
cally
div
erse
.
OU
R E
MP
LOY
EE L
IFE
CYCL
E
Our
em
ploy
ees
are
the
livin
g, b
reat
hing
em
bodi
men
t of
our
cultu
re. A
ccor
ding
ly, w
e se
ek to
alig
n al
l pha
ses
of
the
empl
oyee
life
cyc
le —
recr
uitin
g, o
nboa
rdin
g, c
aree
r de
velo
pmen
t and
trai
ning
, per
form
ance
eva
luat
ions
, co
mpe
nsat
ion
and
prom
otio
n —
with
our
cor
pora
te
stan
dard
s. O
ver
the
last
sev
eral
yea
rs, w
e ha
ve fo
cuse
d pa
rtic
ular
att
entio
n on
recr
uitm
ent a
nd tr
aini
ng a
t all
leve
ls w
ithin
the
com
pany
, enh
anci
ng o
ur e
ffort
s to
de
velo
p ou
r fu
ture
lead
ers,
dev
elop
ing
succ
essi
on p
lans
to
ena
ble
our
com
pany
to c
ontin
ue o
pera
ting
in a
ccor
-da
nce
with
its
stan
dard
s an
d pr
inci
ples
ove
r th
e lo
ng
term
, and
inst
itutin
g pe
rfor
man
ce m
anag
emen
t and
co
mpe
nsat
ion
prac
tices
that
bet
ter
alig
n co
mpe
nsat
ion
with
our
com
mitm
ent t
o do
ing
busi
ness
the
righ
t way
.
Recr
uitm
ent
We
hire
thou
sand
s of
em
ploy
ees
each
yea
r ac
ross
all
our
glob
al b
usin
esse
s, a
nd w
e tr
ain
them
to u
nder
-st
and
our
cultu
re, p
rodu
cts,
reg
ulat
ory
requ
irem
ents
, se
rvic
es a
nd c
usto
mer
s, a
s w
ell a
s on
wha
t the
y ne
ed
to k
now
to d
o th
eir
jobs
wel
l. Th
e hi
ring
of t
he h
igh-
est-
qual
ity p
eopl
e is
ess
entia
l to
the
ongo
ing
succ
ess
of th
e co
mpa
ny. I
t als
o is
impo
rtan
t tha
t we
have
a
broa
dly
dive
rse
team
at a
ll le
vels
of t
he c
ompa
ny.
Tow
ard
that
end
, we
have
des
igne
d a
Blue
prin
t for
M
anag
ers
on D
iver
sity
that
enc
oura
ges
man
ager
s at
all
leve
ls to
mak
e di
vers
ity a
bus
ines
s pr
iori
ty,
expa
nd th
eir
scop
e in
sou
rcin
g an
d at
trac
ting
tale
nt,
crea
te a
mor
e in
clus
ive
wor
k en
viro
nmen
t to
empo
wer
em
ploy
ees,
and
fost
er a
wor
kpla
ce th
at is
res
pect
ful
and
incl
usiv
e of
diff
eren
ces.
Our
hir
ing
prac
tices
are
bas
ed o
n th
e fo
llow
ing
set o
f st
anda
rds
that
hel
p us
mai
ntai
n hi
gh le
vels
of i
nteg
rity
du
ring
the
proc
ess
and
base
em
ploy
men
t dec
isio
ns o
n m
erit
and
alig
nmen
t with
our
Bus
ines
s Pr
inci
ples
:
and
outs
ide
the
com
pany
.
-ua
ls, a
t all
leve
ls o
f the
com
pany
, who
em
body
the
com
pany
’s cu
lture
and
val
ues.
-da
tes
to p
ut th
e ri
ght p
eopl
e in
the
righ
t job
s.
Give
n th
e sc
ope
and
geog
raph
ic d
iver
sity
of o
ur b
usi-
ness
es, i
t is
impo
rtan
t tha
t we
mai
ntai
n pr
oces
ses
that
ev
alua
te c
andi
date
s co
nsis
tent
ly u
sing
obj
ectiv
e cr
iteri
a th
at w
eigh
onl
y ap
prop
riat
e co
nsid
erat
ions
. Tha
t con
sis-
tenc
y is
vita
l bec
ause
we
belie
ve th
at th
e hi
ring
pro
cess
is
the
first
ste
p to
cul
tivat
ing
a so
und
corp
orat
e cu
lture
.
Trai
ning
Onc
e em
ploy
ees
join
the
com
pany
, it’s
our
resp
onsi
bilit
y to
hel
p th
em b
uild
thei
r kn
owle
dge,
ski
lls a
nd e
xper
i-en
ce. A
mor
e en
gage
d an
d be
tter
trai
ned
wor
kfor
ce
not o
nly
incr
ease
s em
ploy
ee s
atis
fact
ion,
it c
ontr
ibut
es
to a
bet
ter
cust
omer
exp
erie
nce
and
help
s dr
ive
the
com
pany
’s lo
ng-t
erm
suc
cess
. The
com
pany
spe
nds
an e
stim
ated
$30
0 m
illio
n pe
r ye
ar g
loba
lly o
n fo
rmal
tr
aini
ng p
rogr
ams
at a
ll le
vels
. Pro
gram
s ra
nge
from
en
try-
leve
l tra
inin
g to
lead
ersh
ip a
nd m
anag
emen
t co
urse
s an
d ar
e ta
ilore
d to
indi
vidu
al fu
nctio
ns, l
ines
of
busi
ness
or
geog
raph
ic re
gion
s. W
e ha
ve c
ompr
ehen
sive
pr
ogra
ms
focu
sed
on o
ur re
gula
tory
con
trol
and
com
pli-
ance
obj
ectiv
es.
OU
R E
MPL
OYE
E LI
FE C
YCLE
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E20 Si
nce
a si
gnifi
cant
am
ount
of e
ntry
-leve
l hir
ing
is d
one
at th
e an
alys
t and
ass
ocia
te le
vels
, we
spen
d a
sign
ifi-
cant
am
ount
of t
ime
trai
ning
thes
e em
ploy
ees
on h
ow
we
do b
usin
ess
and
help
ing
them
bui
ld th
e te
chni
cal
expe
rtis
e th
ey w
ill n
eed
for
thei
r jo
bs. T
o pu
t thi
s in
co
ntex
t, la
st y
ear:
mor
e th
an 5
00 fu
ll-tim
e an
alys
ts a
nd a
ssoc
iate
s an
d ov
er 8
00 s
umm
er a
naly
sts
and
asso
ciat
es.
Ope
ratio
ns, F
inan
ce a
nd H
uman
Res
ourc
es h
ired
and
trai
ned
over
700
full-
time
anal
ysts
.
anal
ysts
, ass
ocia
tes
and
sum
mer
ana
lyst
s.
and
sum
mer
ana
lyst
s.
mor
e th
an 1
60 fu
ll-tim
e an
d su
mm
er a
naly
sts
and
asso
ciat
es.
It al
so is
impo
rtan
t to
deve
lop
a st
rong
team
of
dedi
cate
d, ta
lent
ed a
nd c
omm
itted
lead
ers
thro
ugho
ut
all l
evel
s of
man
agem
ent.
At th
e to
p of
our
org
ani-
zatio
n, w
e w
ork
to d
evel
op a
pip
elin
e of
qua
lified
le
ader
s th
roug
h ex
pans
ive
trai
ning
and
dev
elop
men
t pr
ogra
ms,
bol
ster
ed b
y a
disc
iplin
ed p
roce
ss o
f tal
ent
revi
ews
focu
sed
on th
orou
gh a
sses
smen
ts, e
xecu
tive
deve
lopm
ent p
rogr
ams
and
rota
tions
of t
op e
xecu
tives
to
pre
pare
them
for
grea
ter
resp
onsi
bilit
y. W
e ha
ve a
nu
mbe
r of
leve
ls o
f man
agem
ent t
rain
ing
desi
gned
to
prep
are
empl
oyee
s fo
r m
anag
emen
t rol
es a
nd le
ader
-sh
ip re
spon
sibi
litie
s. A
mon
g th
em:
CEO
Boo
tcam
p tr
ains
our
sen
ior
lead
ers
on b
oth
inte
rnal
cha
lleng
es a
nd e
xter
nal p
ress
ures
that
face
a
CEO
or
head
of a
larg
e bu
sine
ss u
nit f
unct
ion.
Lead
ers
Mor
gan
Chas
e is
ano
ther
sen
ior
lead
er
prog
ram
that
is d
esig
ned
to d
evel
op c
erta
in le
ad-
ersh
ip o
bjec
tives
, inc
ludi
ng d
evel
opin
g st
rate
gies
an
d pe
rspe
ctiv
es fr
om a
ll bu
sine
sses
and
taki
ng a
fir
mw
ide
pers
pect
ive
in d
ecis
ion
mak
ing.
Lead
ing
Acr
oss
the
Fran
chis
e is
a tr
aini
ng p
rogr
am
for
the
next
leve
l of l
eade
rs th
at is
mod
eled
aft
er,
and
teac
hes
sim
ilar
topi
cs to
, Lea
ders
Mor
gan
Chas
e.
Trai
ning
the
Nex
t 40
,00
0 M
anag
ers
is a
glo
bal e
ffort
cu
rren
tly u
nder
way
to d
evel
op a
firm
wid
e ap
proa
ch
to tr
aini
ng th
e ne
xt s
et o
f mor
e th
an 4
0,00
0 m
anag
ers.
Our
lead
ersh
ip a
nd d
evel
opm
ent e
xecu
-tiv
es fr
om a
roun
d th
e w
orld
are
bri
ngin
g to
geth
er
thei
r be
st p
ract
ices
to d
evel
op a
sta
te-o
f-the
-art
pr
ogra
m th
at is
foun
ded
on o
ur B
usin
ess
Prin
cipl
es
and
lead
ersh
ip a
ttri
bute
s.
Thro
ugh
all o
f our
man
agem
ent t
rain
ing
prog
ram
s, w
e ai
m to
bui
ld a
str
ong
cultu
re o
f doi
ng th
e ri
ght t
hing
and
do
ing
first
-cla
ss b
usin
ess
in a
firs
t-cl
ass
way
.
OU
R E
MPL
OYE
E LI
FE C
YCLE
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E21
Perf
orm
ance
man
agem
ent a
nd
prom
otio
n
Regu
lar f
eedb
ack
is c
ritic
al to
our
em
ploy
ees’
suc
cess
. Ou
r gui
ding
prin
cipl
es fo
r per
form
ance
man
agem
ent a
re:
how
the
empl
oyee
has
ach
ieve
d it,
incl
udin
g qu
an-
titat
ive
(res
ults
) and
qua
litat
ive
(beh
avio
ral)
perf
or-
man
ce in
dica
tors
Our
ann
ual p
erfo
rman
ce m
anag
emen
t pro
cess
see
ks
to ta
ke a
com
preh
ensi
ve a
nd b
alan
ced
view
of o
ur
empl
oyee
s’ p
erfo
rman
ce b
y as
sess
ing
empl
oyee
s in
fo
ur k
ey a
reas
:
Our p
roce
ss lo
oks
at p
erfo
rman
ce h
olis
tical
ly, s
olic
iting
in
put f
rom
mul
tiple
sou
rces
, inc
ludi
ng p
eers
, sub
ordi
-na
tes,
and
risk
and
con
trol
func
tions
. We
rein
forc
e ou
r co
nduc
t and
con
trol
s cu
lture
with
com
mon
exp
ecta
tions
an
d as
sess
men
t too
ls. F
or o
ur m
ore
seni
or e
mpl
oyee
s,
we
have
a s
tand
ard,
firm
wid
e 36
0 de
gree
-typ
e su
rvey
to
ol to
col
lect
feed
back
from
pee
rs a
nd s
ubor
dina
tes
on
beha
vior
s th
ey d
emon
stra
te d
ay to
day
. The
firs
t que
stio
n in
that
sur
vey
asks
whe
ther
the
empl
oyee
exe
mpl
ifies
the
high
est s
tand
ard
of e
thic
s an
d in
tegr
ity. T
his
info
rmat
ion
is a
ver
y im
port
ant i
nput
into
the
man
ager
’s ov
eral
l eva
lu-
atio
n of
the
empl
oyee
.
We
also
reco
gniz
e th
e im
port
ance
of a
per
form
ance
re
view
pro
cess
that
enc
oura
ges
seni
or m
anag
emen
t to
take
resp
onsi
bilit
y, o
wne
rshi
p an
d ac
coun
tabi
lity
for r
isk
and
cont
rol i
ssue
s. W
e ha
ve e
nhan
ced
our r
evie
w p
roce
ss
for o
ur m
ater
ial r
isk
take
rs to
driv
e he
ight
ened
exp
ecta
-tio
ns a
cros
s th
e or
gani
zatio
n w
ith s
tand
ard
chec
klis
ts a
nd
cons
iste
nt e
valu
atio
n of
risk
and
con
trol
s. In
add
ition
, we
solic
it di
rect
feed
back
from
the
rele
vant
risk
and
con
trol
le
ads
on o
ur m
ost m
ater
ial r
isk
take
rs a
nd c
ontr
olle
rs.
The
eval
uatio
n of
a p
oten
tial p
rom
otio
n in
clud
es a
revi
ew
of th
e sc
ope,
resp
onsi
bilit
ies,
per
form
ance
and
oth
er k
ey
lead
ersh
ip a
ttrib
utes
ass
ocia
ted
with
the
role
. Pro
mot
ions
ar
e ba
sed
on th
e in
divi
dual
’s st
rong
per
form
ance
(ove
r a
sust
aine
d pe
riod)
and
ski
lls n
eede
d to
mee
t the
dem
ands
of
the
busi
ness
or f
unct
ion.
Risk
and
con
trol
con
side
ratio
ns a
re a
n im
port
ant p
art
of o
ur p
rom
otio
n pr
oces
s. F
urth
er, f
or m
ore
seni
or-
leve
l pro
mot
ions
, we
have
impl
emen
ted
an e
nhan
ced
revi
ew p
roce
ss, i
nclu
ding
bac
kgro
und
and
perf
orm
ance
hi
stor
y ch
ecks
.
The
com
pany
doe
s no
t tol
erat
e m
isco
nduc
t. W
here
pe
rfor
man
ce re
view
s or
oth
er c
ircum
stan
ces
show
that
an
indi
vidu
al is
not
mee
ting
expe
ctat
ions
or a
cts
cont
rary
to
our
cor
pora
te s
tand
ards
, the
com
pany
will
und
erta
ke
a se
ries
of m
easu
res
that
may
incl
ude
chan
ges
in jo
b re
spon
sibi
lity,
add
ition
al tr
aini
ng, f
urth
er fo
rmal
revi
ews
or d
isci
plin
ary
actio
n, in
clud
ing
term
inat
ion
for m
isco
n-du
ct. P
erfo
rman
ce a
sses
smen
ts, p
rom
otio
n re
view
s an
d co
mpe
nsat
ion
act t
oget
her t
o re
info
rce
the
beha
vior
s th
at
refle
ct o
ur B
usin
ess
Prin
cipl
es.O
UR
EM
PLO
YEE
LIFE
CYC
LEH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
RPO
RAT
E CU
LTU
RE
22 Com
pens
atio
n
Com
pens
atio
n is
a c
ritic
al to
ol to
att
ract
and
reta
in to
p ta
lent
that
act
s w
ith in
tegr
ity. T
he p
rinc
ipal
und
erpi
n-ni
ngs
of o
ur c
ompe
nsat
ion
syst
em a
re s
tron
g go
ver-
nanc
e, a
n ac
ute
focu
s on
per
form
ance
, sha
reho
lder
al
ignm
ent,
sens
itivi
ty to
the
rele
vant
mar
ketp
lace
and
a
long
-ter
m o
rien
tatio
n, a
s ill
ustr
ated
in th
e fo
llow
ing
prin
cipl
es a
dopt
ed b
y ou
r Bo
ard:
com
pens
atio
n pr
actic
es a
nd p
rinc
iple
s an
d th
eir
impl
emen
tatio
n sh
ould
ens
ure
prop
er g
over
nanc
e an
d re
gula
tory
com
plia
nce.
help
att
ract
and
reta
in th
e be
st ta
lent
nec
essa
ry to
gr
ow a
nd s
usta
in o
ur b
usin
ess.
cultu
re s
houl
d be
enc
oura
ged
and
rew
arde
d.
perf
orm
ance
and
rew
ardi
ng b
ehav
ior
that
gen
erat
es
sust
aine
d va
lue
for
the
com
pany
thro
ugh
busi
ness
cy
cles
mea
ns c
ompe
nsat
ion
shou
ld n
ot b
e ov
erly
ri
gid,
form
ulai
c or
sho
rt-t
erm
ori
ente
d.
vest
ing)
sho
uld
crea
te a
mea
ning
ful o
wne
rshi
p st
ake
in th
e co
mpa
ny, s
hare
hold
er a
lignm
ent a
nd
rete
ntio
n of
top
tale
nt.
and
repa
ymen
t pol
icie
s sh
ould
be
robu
st e
noug
h to
de
ter
exce
ssiv
e ri
sk ta
king
and
str
ike
a ba
lanc
e in
m
akin
g co
mpe
nsat
ion-
rela
ted
deci
sion
s.
of
exe
cutiv
e pe
rqui
site
s, s
peci
al e
xecu
tive
re
tirem
ent b
enefi
ts, s
peci
al s
ever
ance
pla
ns
and
gold
en p
arac
hute
s.
We
desi
gn o
ur c
ompe
nsat
ion
prog
ram
s to
be
supp
ortiv
e of
our
com
pany
goa
ls a
nd s
trat
egic
impe
r-at
ives
and
to d
rive
sha
reho
lder
val
ue. T
o ac
hiev
e th
at
end,
we
have
und
erta
ken
a nu
mbe
r of
act
ions
with
the
aim
of i
nteg
ratin
g ri
sk m
anag
emen
t with
com
pens
a-tio
n pr
oces
ses,
rei
nfor
cing
str
ong
gove
rnan
ce p
ract
ices
an
d ty
ing
pay
to p
erfo
rman
ce.
Firs
t and
fore
mos
t, w
e op
erat
e un
der
a pa
y-fo
r-
perf
orm
ance
fram
ewor
k. A
ccor
ding
ly, o
ur v
aria
ble
ince
ntiv
e aw
ards
refl
ect b
usin
ess
unit
and
indi
vidu
al
perf
orm
ance
ove
r a
mul
ti-ye
ar ti
me
fram
e; a
ccou
nt
for
risk
and
con
trol
out
com
es; a
nd a
sses
s ac
hiev
e-m
ent t
owar
d sh
ort-
and
long
-ter
m o
bjec
tives
. We
care
no
t onl
y ab
out w
hat r
esul
ts a
re b
ut a
lso
how
they
ar
e ac
hiev
ed. T
his
enab
les
us to
rew
ard
actio
ns a
nd
outc
omes
that
may
not
incr
ease
rev
enue
but
ser
ve th
e co
mpa
ny’s
inte
rest
s in
oth
er r
espe
cts
— e
.g.,
deve
l-op
ing
a pr
omis
ing
busi
ness
or
even
arr
angi
ng fo
r th
e pr
uden
t dis
posi
tion
of a
sset
s or
bus
ines
s or
dec
idin
g no
t to
ente
r a
part
icul
ar b
usin
ess.
To a
chie
ve a
bal
ance
d, h
olis
tic a
ppro
ach,
we
utili
ze th
e fo
llow
ing
pay
prac
tices
:
Pay
at r
isk.
A m
eani
ngfu
l am
ount
of v
aria
ble
com
pen-
satio
n (a
maj
ority
for o
ur O
pera
ting
Com
mitt
ee
mem
bers
) is
“at r
isk”
and
con
tinge
nt o
n ac
hiev
emen
t of
bus
ines
s go
als
that
are
inte
gral
ly li
nked
to s
hare
-ho
lder
val
ue a
nd s
afet
y an
d so
undn
ess.
We
mea
sure
th
e pe
rfor
man
ce o
f our
Ope
ratin
g Co
mm
ittee
m
embe
rs o
ver a
mul
ti-ye
ar h
oriz
on a
cros
s fo
ur b
road
ca
tego
ries
(peo
ple
man
agem
ent a
nd le
ader
ship
, ris
k an
d co
ntro
l foc
us, c
usto
mer
focu
s an
d bu
sine
ss
perf
orm
ance
) in
orde
r to
appr
opria
tely
bal
ance
sh
ort-,
med
ium
- and
long
-ter
m g
oals
that
driv
e su
stai
ned
shar
ehol
der v
alue
whi
le a
ccou
ntin
g fo
r ris
k an
d co
ntro
l out
com
es.
OU
R E
MPL
OYE
E LI
FE C
YCLE
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E23
Pay
for
sust
aine
d pe
rfor
man
ce. F
or m
ore
than
30,
000
of o
ur e
mpl
oyee
s, a
mea
ning
ful a
mou
nt o
f var
iabl
e co
mpe
nsat
ion
(and
a m
ajor
ity o
f var
iabl
e co
mpe
n-sa
tion
for
our
Ope
ratin
g Co
mm
ittee
mem
bers
) is
in
rest
rict
ed s
tock
uni
ts th
at a
re m
anda
tori
ly d
efer
red
for
thre
e ye
ars,
with
fina
l pay
out l
evel
s ba
sed
on o
ur
stoc
k pr
ice
whe
n aw
ards
ves
t (i.e
., if
our
stoc
k pr
ice
goes
dow
n, a
war
d va
lues
go
dow
n an
d vi
ce v
ersa
). In
ad
ditio
n, d
efer
red
stoc
k aw
ards
are
sub
ject
to fo
rfei
-tu
re in
the
even
t of s
epar
atio
n fr
om s
ervi
ce a
nd, f
or
our
Ope
ratin
g Co
mm
ittee
mem
bers
and
mat
eria
l ris
k ta
kers
, a s
ubst
antia
l por
tion
is s
ubje
ct to
can
cella
-tio
n if
perf
orm
ance
thre
shol
ds a
re n
ot m
et.
Impa
ct o
f ris
k ev
ents
. We
cons
ider
mat
eria
l ris
k an
d co
ntro
l iss
ues
at th
e co
mpa
ny, l
ine
of b
usin
ess
and
indi
vidu
al le
vels
and
mak
e ad
just
men
ts to
com
pen-
satio
n, w
hen
appr
opri
ate,
for
rele
vant
em
ploy
ees.
Stro
ng s
hare
ow
ners
hip
guid
elin
es a
nd h
oldi
ng
requ
irem
ents
. Ope
ratin
g Co
mm
ittee
mem
bers
now
ar
e re
quire
d to
ow
n a
min
imum
of 2
00,0
00 to
40
0,00
0 sh
ares
of o
ur c
omm
on s
tock
, and
the
CEO
m
ust o
wn
a m
inim
um o
f 1,0
00,0
00 s
hare
s. T
he p
olic
y w
as u
pdat
ed in
201
3, a
llow
ing
Oper
atin
g Co
mm
ittee
m
embe
rs u
p to
six
yea
rs to
com
ply.
In a
dditi
on,
Oper
atin
g Co
mm
ittee
mem
bers
mus
t hol
d (fo
r as
long
as
they
are
on
the
Oper
atin
g Co
mm
ittee
) 50%
of
net s
hare
s th
at v
est a
s pa
rt o
f our
equ
ity c
ompe
nsa-
tion
prog
ram
, whi
ch s
erve
s to
alig
n th
eir s
hort
- and
lo
ng-t
erm
inte
rest
s w
ith th
ose
of s
hare
hold
ers.
Stro
ng c
law
back
pol
icy.
Com
preh
ensi
ve re
cove
ry
prov
isio
ns e
nabl
e us
, whe
re le
gally
per
mis
sibl
e,
to c
ance
l or r
educ
e un
vest
ed a
war
ds o
r req
uire
re
paym
ent o
f cas
h or
equ
ity c
ompe
nsat
ion
alre
ady
paid
in c
erta
in s
ituat
ions
, inc
ludi
ng a
mat
eria
l fin
anci
al re
stat
emen
t, em
ploy
ee m
isco
nduc
t, fa
ilure
to
ach
ieve
min
imum
fina
ncia
l thr
esho
lds
and
othe
r ri
sk-r
elat
ed e
vent
s. W
e al
so re
tain
the
righ
t to
redu
ce c
urre
nt-y
ear
ince
ntiv
es to
redr
ess
any
prio
r im
bala
nce
that
we
subs
eque
ntly
det
erm
ine
may
hav
e
exis
ted.
The
se p
rovi
sion
s ho
ld e
xecu
tives
acc
ount
-ab
le, w
hen
appr
opri
ate,
for
sign
ifica
nt a
ctio
ns o
r ite
ms
that
neg
ativ
ely
affec
t bus
ines
s pe
rfor
man
ce
in c
urre
nt o
r fu
ture
yea
rs. F
or th
e CI
O in
cide
nt, f
or
exam
ple,
the
com
pany
cla
wed
bac
k or
can
cele
d
mor
e th
an $
100
mill
ion
of c
ompe
nsat
ion
thro
ugh
thes
e m
echa
nism
s.
Hed
ging
/ple
dgin
g po
licy.
All
empl
oyee
s ar
e pr
ohib
-ite
d fr
om th
e he
dgin
g of
unv
este
d re
stri
cted
sto
ck
units
, and
une
xerc
ised
opt
ions
or
stoc
k ap
prec
iatio
n ri
ghts
, and
, for
Ope
ratin
g Co
mm
ittee
mem
bers
, the
he
dgin
g of
any
sha
res
owne
d ou
trig
ht o
r th
roug
h de
ferr
ed c
ompe
nsat
ion
also
is p
rohi
bite
d.
Com
peti
tive
ben
chm
arki
ng. T
o m
ake
fully
info
rmed
de
cisi
ons
on p
ay le
vels
and
pay
pra
ctic
es, w
e be
nchm
ark
ours
elve
s ag
ains
t pee
r gr
oups
des
ig-
nate
d by
our
Boa
rd. W
e be
lieve
ext
erna
l mar
ket
data
is a
n im
port
ant c
ompo
nent
of s
ettin
g pa
y le
vels
to a
ttra
ct a
nd r
etai
n to
p ta
lent
whi
le d
rivi
ng
shar
ehol
der
valu
e.
Shar
ehol
der
outr
each
. Eac
h ye
ar, w
e so
licit
inve
stor
fe
edba
ck o
n ou
r co
mpe
nsat
ion
prog
ram
s an
d pr
actic
es, i
nclu
ding
thro
ugh
the
annu
al s
hare
hold
er
advi
sory
vot
e on
exe
cutiv
e co
mpe
nsat
ion
(“sa
y on
pa
y”),
and
cons
ider
suc
h fe
edba
ck in
det
erm
inin
g fu
ture
pay
pra
ctic
es.
Ove
r th
e co
urse
of 2
013,
and
con
tinui
ng in
201
4, w
e to
ok a
num
ber
of s
teps
to e
nhan
ce o
ur r
isk
and
cont
rol
prac
tices
as
they
rela
te to
com
pens
atio
n, in
clud
ing:
Enha
nced
ris
k re
view
pro
cess
. We
impl
emen
ted
an
enha
nced
ris
k re
view
pro
cess
acr
oss
the
com
pany
th
at fu
rthe
r st
reng
then
s th
e co
nnec
tion
amon
g ri
sk,
cont
rols
and
com
pens
atio
n. T
he p
roce
ss id
entifi
es
and
eval
uate
s re
leva
nt r
isk
and
cont
rol i
ssue
s th
at
surf
ace
in v
ario
us fo
rum
s (in
clud
ing
Risk
com
mitt
ees
and
the
line
of b
usin
ess
Cont
rol c
omm
ittee
s) a
nd,
whe
n ap
prop
riat
e, in
itiat
es h
uman
reso
urce
s-
rela
ted
rem
edia
l act
ions
, suc
h as
redu
ctio
n of
va
riab
le c
ompe
nsat
ion
or s
epar
atio
n of
em
ploy
men
t.
OU
R E
MPL
OYE
E LI
FE C
YCLE
HO
W W
E D
O B
USI
NES
S —
OU
R C
OR
POR
ATE
CULT
UR
E24
Focu
sed
com
pens
atio
n po
ol r
evie
ws.
We
rest
ruct
ured
ou
r va
riab
le c
ompe
nsat
ion
pool
revi
ew p
roce
ss.
Busi
ness
per
form
ance
, inc
ludi
ng th
e im
pact
of r
isk
and
cont
rol i
tem
s, is
con
side
red
prio
r to
dev
elop
ing
prel
imin
ary
ince
ntiv
e po
ol g
uida
nce.
We
then
take
in
to a
ccou
nt o
ther
qua
litat
ive
fact
ors,
incl
udin
g pr
ogre
ss a
gain
st s
trat
egic
pri
oriti
es, r
isk
and
cont
rol
outc
omes
, sta
ffing
cha
nges
, peo
ple
man
agem
ent
prio
ritie
s an
d co
mpe
titiv
e m
arke
t tre
nds.
Bro
aden
ed s
hare
ret
enti
on/o
wne
rshi
p gu
idel
ines
. W
e br
oade
ned
our
shar
e re
tent
ion
guid
elin
es fo
r Op
erat
ing
Com
mitt
ee m
embe
rs, a
s ou
tline
d ab
ove,
to
incl
ude
a sh
are
owne
rshi
p re
quire
men
t tha
t mus
t be
met
with
in s
ix y
ears
.
Enha
nced
dis
clos
ure.
The
Apr
il 20
14 p
roxy
sta
tem
ent
incl
udes
a n
ew C
ompe
nsat
ion
Disc
ussi
on &
Ana
lysi
s pr
esen
tatio
n to
resp
ond
to s
hare
hold
er fe
edba
ck a
nd
to im
prov
e cl
arity
and
tran
spar
ency
.
Succ
essi
on p
lann
ing
Mai
ntai
ning
our
cor
pora
te s
tand
ards
and
str
ong
finan
cial
per
form
ance
for
the
long
term
requ
ires
a pi
pelin
e of
sup
erio
r ta
lent
, aug
men
ted
from
tim
e to
tim
e by
ext
erna
l hire
s, to
pro
vide
con
tinui
ty o
f suc
ces-
sion
for
our
Ope
ratin
g Co
mm
ittee
, inc
ludi
ng th
e CE
O
posi
tion,
and
sen
ior
posi
tions
bel
ow th
e O
pera
ting
Com
mitt
ee. B
uild
ing
on o
ur d
isci
plin
ed a
ppro
ach
to
man
agem
ent d
evel
opm
ent,
the
com
pany
regu
larl
y re
view
s ca
ndid
ates
to a
sses
s w
heth
er th
ey c
urre
ntly
are
re
ady
for
a ne
xt-le
vel r
ole,
as
wel
l as
futu
re p
oten
tial
succ
esso
rs to
eac
h m
embe
r of
the
Ope
ratin
g Co
mm
ittee
an
d to
eac
h m
embe
r’s d
irect
repo
rts.
Sim
ilar
succ
es-
sion
pla
nnin
g pr
oces
ses
focu
sed
on p
rese
nt a
nd fu
ture
le
ader
s oc
cur
in e
ach
of th
e co
mpa
ny’s
lines
of b
usin
ess
and
func
tions
.
Our
inde
pend
ent d
irect
ors
are
deep
ly in
volv
ed in
su
cces
sion
pla
nnin
g. S
ucce
ssio
n pl
anni
ng is
requ
ired
to b
e di
scus
sed
at le
ast a
nnua
lly b
y th
e in
depe
nden
t di
rect
ors
with
the
CEO.
Our
Lea
d In
depe
nden
t Dire
ctor
gu
ides
the
full
Boar
d co
nsid
erat
ion
of C
EO s
ucce
ssio
n.
The
Com
pens
atio
n &
Man
agem
ent D
evel
opm
ent
Com
mitt
ee o
f the
Boa
rd re
view
s th
e su
cces
sion
pla
ns
for
the
CEO
and
Ope
ratin
g Co
mm
ittee
. The
com
mitt
ee
advi
ses
the
Boar
d on
tale
nt d
evel
opm
ent,
dive
rsity
an
d su
cces
sion
pla
nnin
g fo
r ke
y ex
ecut
ives
. Boa
rd
mem
bers
freq
uent
ly in
tera
ct w
ith s
enio
r ex
ecut
ives
as
part
of B
oard
and
com
mitt
ee m
eetin
gs a
nd in
oth
er, l
ess
form
al s
ettin
gs. T
his
expo
sure
allo
ws
Boar
d m
embe
rs to
ob
serv
e th
e le
ader
ship
pot
entia
l and
sty
le o
f the
sen
ior
exec
utiv
es o
n a
mor
e pe
rson
al b
asis
.
The
CEO
als
o co
nduc
ts fo
rmal
tale
nt re
view
dis
cuss
ions
on
an
annu
al b
asis
with
eac
h O
pera
ting
Com
mitt
ee
mem
ber.
Duri
ng th
ese
mee
tings
, pot
entia
l suc
cess
ors
and
dire
ct re
port
s to
the
Ope
ratin
g Co
mm
ittee
mem
bers
ar
e di
scus
sed.
Act
ion
item
s de
velo
ped
for
succ
essi
on
plan
s ar
e tr
acke
d an
d as
sess
ed th
roug
hout
the
year
.
Out
stan
ding
peo
ple,
str
ong
lead
ersh
ip a
nd e
ffect
ive
gove
rnan
ce a
re th
e fo
unda
tion
of o
ur s
ucce
ss. T
he
com
pany
has
set
hig
h co
rpor
ate
stan
dard
s, a
nd u
nder
th
e le
ader
ship
of o
ur B
oard
and
man
agem
ent,
we
are
com
mitt
ed to
cre
atin
g an
env
ironm
ent i
n w
hich
all
our
peop
le o
pera
te w
ith in
tegr
ity, f
airn
ess
and
acco
unt-
abili
ty. W
e w
ill c
ontin
ue to
revi
ew a
nd a
naly
ze o
ur
peop
le p
ract
ices
, lea
ders
hip
stru
ctur
e an
d go
vern
ance
m
odel
s to
ens
ure
that
they
refle
ct a
nd s
uppo
rt o
ur
adhe
renc
e to
our
cor
pora
te s
tand
ards
and
that
we
are
wel
l-pos
ition
ed to
ser
ve o
ur c
usto
mer
s, s
hare
hold
ers
and
com
mun
ities
toda
y an
d in
the
futu
re.
OU
R E
MPL
OYE
E LI
FE C
YCLE
III.
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T26
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T27
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T
Ove
r th
e pa
st s
ever
al y
ears
, our
con
trol
age
nda
has
been
a to
p pr
iori
ty. T
his
com
mitm
ent i
s ev
iden
ced
by
fund
amen
tal c
hang
es th
at h
ave
been
impl
emen
ted
acro
ss th
e co
mpa
ny to
enh
ance
gov
erna
nce
and
over
sigh
t of o
ur c
ontr
ol e
nviro
nmen
t and
to s
impl
ify
and
appr
opri
atel
y de
-ris
k ou
r op
erat
ions
, as
wel
l as
by
the
subs
tant
ial a
dditi
onal
inve
stm
ents
in fi
nanc
ial a
nd
hum
an c
apita
l ded
icat
ed to
the
effor
ts.
Our
con
trol
env
ironm
ent c
an b
e th
ough
t of i
n te
rms
of
the
busi
ness
es, t
he c
ontr
ol fu
nctio
ns a
nd In
tern
al A
udit:
Firs
t lin
e of
def
ense
. The
line
s of
bus
ines
s ea
ch a
re
resp
onsi
ble
for
deve
lopi
ng a
nd m
aint
aini
ng e
ffect
ive
inte
rnal
con
trol
s fo
r th
eir
resp
ectiv
e bu
sine
ss
lines
. The
y al
so a
re a
ccou
ntab
le fo
r id
entif
ying
and
ad
dres
sing
the
risk
s pr
esen
ted
by th
eir
resp
ectiv
e bu
sine
sses
and
for
oper
atin
g w
ithin
a s
ound
con
trol
en
viro
nmen
t. Th
e fir
st li
ne o
f def
ense
als
o in
clud
es
Ove
rsig
ht &
Con
trol
, whi
ch is
des
igne
d to
ens
ure
a st
rong
and
con
sist
ent c
ontr
ol e
nviro
nmen
t acr
oss
the
orga
niza
tion.
Cont
rol f
unct
ions
. In
addi
tion
to O
vers
ight
&
Cont
rol,
our
cont
rol f
unct
ions
incl
ude
Risk
, Fin
ance
Co
mpl
ianc
e an
d Le
gal.
They
eac
h ha
ve th
eir
own
set o
f res
pons
ibili
ties
but w
ork
toge
ther
to p
rovi
de
over
sigh
t of t
he b
usin
esse
s an
d se
t firm
wid
e co
ntro
l pol
icie
s.
Inte
rnal
Aud
it. T
he In
tern
al A
udit
func
tion
oper
ates
in
depe
nden
tly fr
om o
ther
par
ts o
f the
com
pany
, pr
ovid
ing
test
ing
and
eval
uatio
n of
pro
cess
es a
nd
cont
rols
acr
oss
the
entir
e en
terp
rise
. The
Inte
rnal
Au
dit t
eam
ass
esse
s th
e eff
ectiv
enes
s of
our
gov
er-
nanc
e, ri
sk m
anag
emen
t and
inte
rnal
con
trol
s;
eval
uate
s ou
r com
plia
nce
with
law
s an
d re
gula
-tio
ns; a
nd id
entifi
es o
ppor
tuni
ties
for
impr
ovem
ent.
Thro
ugh
this
str
uctu
re, w
e se
ek to
sub
ject
bus
ines
s de
cisi
ons
and
actio
ns to
rig
orou
s co
nsid
erat
ion,
te
stin
g an
d re
view
for
com
plia
nce
with
rele
vant
law
s an
d re
gula
tions
, as
wel
l as
cons
iste
ncy
with
our
Bu
sine
ss P
rinc
iple
s.
We
have
take
n nu
mer
ous
step
s an
d sp
ent c
onsi
dera
ble
time
and
mon
ey e
nhan
cing
our
con
trol
env
ironm
ent.
To
prov
ide
cont
ext f
or th
e br
eadt
h of
this
effo
rt, t
hree
dat
a po
ints
are
wor
th n
otin
g:
sinc
e th
e be
ginn
ing
of 2
012
thro
ugh
the
end
of 2
014
to s
uppo
rt o
ur re
gula
tory
, com
plia
nce
and
cont
rol
effor
ts a
cros
s th
e en
tire
com
pany
, and
dur
ing
2013
, ou
r em
ploy
ees
com
plet
ed m
ore
than
1 m
illio
n ho
urs
of tr
aini
ng re
late
d to
ris
k, c
ontr
ol a
nd c
ompl
ianc
e.
was
spe
nt in
201
2 fo
r ad
ditio
nal e
xpen
ses
on
regu
lato
ry a
nd c
ontr
ol is
sues
.
on te
chno
logy
focu
sed
on o
ur re
gula
tory
, con
trol
and
co
ntro
l-rel
ated
age
nda
acro
ss th
e fir
m.
On
the
next
pag
es, w
e pr
ovid
e fu
rthe
r de
tail
on h
ow w
e ha
ve e
nhan
ced
our c
ontr
ol e
nviro
nmen
t.
Each
line
of b
usin
ess
owns
the
risk
s in
here
nt in
its
oper
atio
ns
and
is a
ccou
ntab
le fo
r m
aint
aini
ng
effec
tive
inte
rnal
con
trol
s to
safe
guar
d th
e co
mpa
ny.
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T28 EN
HA
NCI
NG
GO
VER
NA
NCE
To h
elp
stre
ngth
en th
e go
vern
ance
of o
ur c
ontr
ol e
nvi-
ronm
ent,
we
crea
ted
seve
ral n
ew g
over
nanc
e co
mm
it-te
es a
t a fi
rmw
ide,
line
of b
usin
ess,
con
trol
func
tion
and
regi
on le
vel.
Firm
wid
e co
mm
ittee
s en
able
us
to b
ette
r un
ders
tand
an
d ad
dres
s is
sues
by
serv
ing
as c
entr
al fo
rum
s fo
r di
scus
sing
and
reso
lvin
g is
sues
that
affe
ct th
e co
mpa
ny
as a
who
le o
r on
e or
mor
e lin
es o
f bus
ines
s. E
qual
ly
impo
rtan
t, th
ese
com
mitt
ees
give
us
the
oppo
rtun
ity
to s
hare
bes
t pra
ctic
es a
nd le
sson
s le
arne
d ac
ross
the
com
pany
. Som
e of
the
com
mitt
ees
we
have
cre
ated
du
ring
the
past
few
yea
rs a
re:
Firm
wid
e Ri
sk C
omm
itte
e (e
stab
lishe
d in
201
2):
Co-c
haire
d by
the
com
pany
’s CE
O a
nd C
hief
Ris
k O
ffice
r, th
is is
our
hig
hest
man
agem
ent-
leve
l Ris
k co
mm
ittee
. It s
erve
s as
an
esca
latio
n po
int f
or r
isk
topi
cs a
nd is
sues
rais
ed b
y its
mem
bers
, the
line
of
bus
ines
s Ri
sk c
omm
ittee
s, a
nd o
ther
sub
ordi
-na
te c
omm
ittee
s, s
uch
as th
e Fi
rmw
ide
Cont
rol
Com
mitt
ee, F
irm
wid
e Fi
duci
ary
Risk
Com
mitt
ee,
Repu
tatio
n Ri
sk c
omm
ittee
s an
d re
gion
al R
isk
com
mitt
ees.
The
com
mitt
ee e
scal
ates
sig
nific
ant
issu
es to
the
Boar
d of
Dire
ctor
s, a
s ap
prop
riat
e.
Firm
wid
e Co
ntro
l Com
mit
tee
(est
ablis
hed
in
2013
): Co
-cha
ired
by th
e co
mpa
ny’s
Chie
f Con
trol
O
ffice
r an
d th
e he
ad o
f Fir
mw
ide
Ope
ratio
nal R
isk
Gove
rnan
ce/M
odel
Ris
k an
d De
velo
pmen
t, th
is
com
mitt
ee p
rovi
des
a m
onth
ly fo
rum
for
revi
ewin
g an
d di
scus
sing
firm
wid
e op
erat
iona
l ris
k, in
clud
ing
exis
ting
and
emer
ging
issu
es, m
etri
cs a
nd m
anag
e-m
ent,
and
revi
ews
exec
utio
n ag
ains
t the
ope
ratio
nal
risk
man
agem
ent f
ram
ewor
k (d
iscu
ssed
on
the
next
pa
ge).
It se
rves
as
an e
scal
atio
n po
int f
or th
e lin
e of
bu
sine
ss, f
unct
iona
l and
regi
onal
Con
trol
com
mit-
tees
and
furt
her
esca
late
s si
gnifi
cant
issu
es to
the
Firm
wid
e Ri
sk C
omm
ittee
, as
appr
opri
ate.
Firm
wid
e Fi
duci
ary
Risk
Com
mit
tee
(est
ablis
hed
in 2
013)
: Thi
s co
mm
ittee
pro
vide
s a
foru
m fo
r ri
sk
mat
ters
rela
ted
to th
e co
mpa
ny’s
fiduc
iary
act
iviti
es
and
over
sees
the
firm
wid
e fid
ucia
ry r
isk
gove
rnan
ce
fram
ewor
k, w
hich
sup
port
s th
e co
nsis
tent
iden
ti-fic
atio
n an
d es
cala
tion
of fi
duci
ary
risk
mat
ters
by
the
rele
vant
line
s of
bus
ines
s or
cor
pora
te fu
nctio
ns
resp
onsi
ble
for
man
agin
g fid
ucia
ry a
ctiv
ities
. Th
e co
mm
ittee
esc
alat
es s
igni
fican
t iss
ues
to th
e Fi
rmw
ide
Risk
Com
mitt
ee, t
he B
oard
of D
irect
ors’
Ri
sk P
olic
y Co
mm
ittee
and
Aud
it Co
mm
ittee
, and
any
ot
her
com
mitt
ee c
onsi
dere
d ap
prop
riat
e.
We
also
hav
e a
Firm
wid
e Re
puta
tion
Risk
Gov
erna
nce
grou
p th
at s
eeks
to p
rom
ote
cons
iste
nt m
anag
emen
t of
repu
tatio
nal r
isk
acro
ss th
e co
mpa
ny. I
ts o
bjec
tives
ar
e to
incr
ease
vis
ibili
ty o
f rep
utat
ion
risk
gov
erna
nce;
pr
omot
e an
d m
aint
ain
a gl
obal
ly c
onsi
sten
t gov
erna
nce
mod
el fo
r re
puta
tion
risk
acr
oss
lines
of b
usin
ess;
pr
omot
e ea
rly
self-
iden
tifica
tion
of p
oten
tial r
eput
atio
n ri
sks
to th
e co
mpa
ny; a
nd p
rovi
de th
ough
t lea
ders
hip
on
cros
s-lin
e of
bus
ines
s re
puta
tion
risk
issu
es. R
ecen
tly,
the
grou
p he
lped
impr
ove
repu
tatio
n ri
sk m
anag
emen
t th
roug
h th
e ad
optio
n of
one
firm
wid
e po
licy
and
the
impl
emen
tatio
n of
app
ropr
iate
ly c
onsi
sten
t gov
erna
nce
with
in th
e lin
es o
f bus
ines
s.
As p
art o
f our
gov
erna
nce
stru
ctur
e, w
e al
so h
ave
Risk
and
Con
trol
com
mitt
ees
for
our
lines
of b
usin
ess,
co
rpor
ate
func
tions
and
regi
ons:
ENH
AN
CIN
G G
OV
ERN
AN
CE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T29
line
of b
usin
ess,
func
tion
or re
gion
al R
isk
com
mitt
ee
and
also
esc
alat
e si
gnifi
cant
ris
k is
sues
(and
/or
risk
issu
es w
ith p
oten
tial fi
rmw
ide
impa
ct) t
o th
e Fi
rmw
ide
Cont
rol C
omm
ittee
.
In a
dditi
on to
thes
e co
mm
ittee
s, th
ere
are
othe
r m
anag
emen
t com
mitt
ees
and
foru
ms
at th
e co
mpa
ny,
line
of b
usin
ess
and
regi
onal
leve
ls, w
here
ris
k-re
late
d to
pics
and
a b
road
rang
e of
oth
er to
pics
, suc
h as
cap
ital
and
stra
tegy
, are
dis
cuss
ed.
Ris
k co
mm
itte
es o
vers
ee th
e in
here
nt r
isks
in th
e re
spec
tive
line
of b
usin
ess,
func
tion
or re
gion
, in
clud
ing
the
revi
ew, a
sses
smen
t and
dec
isio
n m
akin
g re
latin
g to
spe
cific
ris
ks, r
isk
stra
tegy
, pol
icy
and
cont
rols
. The
se c
omm
ittee
s es
cala
te is
sues
to
the
Firm
wid
e Ri
sk C
omm
ittee
, as
appr
opri
ate.
Cont
rol c
omm
ittee
s ov
erse
e th
e op
erat
iona
l ris
ks
and
cont
rol e
nviro
nmen
t of t
he re
spec
tive
line
of
busi
ness
, fun
ctio
n or
regi
on. T
hese
com
mitt
ees
esca
late
ope
ratio
nal r
isk
issu
es to
thei
r re
spec
tive
Boar
d of
Dir
ecto
rsBo
ard
of D
irec
tors
’ Ris
k Po
licy
Com
mitt
ee, A
udit
Com
mitt
ee a
nd C
ompe
nsat
ion
& M
anag
emen
t Dev
elop
men
t Com
mitt
ee
Ope
rati
ng C
omm
itte
e
Chie
f Exe
cuti
ve
Offi
cer
Line
of
Busi
ness
CEO
sH
ead
of H
uman
Reso
urce
sCh
ief O
pera
ting
Offi
cer
Firm
wid
e As
set L
iabi
lity
Com
mit
tee
Firm
wid
e Ri
skCo
mm
itte
e
Firm
wid
e Va
luat
ion
Gove
rnan
ce F
orum
Asse
tM
anag
emen
tRi
sk
Com
mit
tee
CIO,
Tre
asur
yan
d Co
rpor
ate
Risk
Co
mm
itte
e
Com
mer
cial
Bank
ing
Risk
Co
mm
itte
e
Corp
orat
e &
Inve
stm
ent B
ank
Risk
Co
mm
itte
e
Cons
umer
&Co
mm
unit
y Ba
nkin
g Ri
sk
Com
mit
tee
1
As a
pplic
able
CE
O =
Chi
ef E
xecu
tive
Offi
cer
C
IO =
Chi
ef In
vest
men
t Offi
ce
Line
of B
usin
ess
and
Func
tion
Con
trol
Com
mit
tees
1
Line
of B
usin
ess
Fidu
ciar
y Ri
sk C
omm
itte
es1
Line
of B
usin
ess
Repu
tati
on R
isk
Com
mit
tees
1
Inte
rnal
Au
dit
Firm
wid
e Co
ntro
lCo
mm
itte
e
Firm
wid
e Re
puta
tion
Ris
kGo
vern
ance
Firm
wid
e Fi
duci
ary
Risk
Com
mit
tee
Firm
wid
e Ca
pita
l Gov
erna
nce
Com
mit
tee
Chie
f Ris
kO
ffice
rCh
ief F
inan
cial
Offi
cer
Gene
ral
Coun
sel
ENH
AN
CIN
G G
OV
ERN
AN
CE
Gov
erna
nce
stru
ctur
e
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T30 FI
RST
LIN
E O
F D
EFEN
SE
Our
line
s of
bus
ines
s ar
e re
spon
sibl
e fo
r dev
elop
ing
and
mai
ntai
ning
an
effec
tive
cont
rol e
nviro
nmen
t for
thei
r re
spec
tive
busi
ness
es. A
s th
e fir
st li
ne o
f def
ense
, the
lin
es o
f bus
ines
s he
lp fa
cilit
ate
early
iden
tifica
tion
and
esca
latio
n of
issu
es. T
his
enab
les
us to
find
pot
entia
l is
sues
bef
ore
they
bec
ome
larg
er p
robl
ems
and
brin
g in
th
e ap
prop
riate
reso
urce
s to
add
ress
thes
e is
sues
qui
ckly
.
Ove
rsig
ht &
Con
trol
als
o is
par
t of t
he fi
rst l
ine
of
defe
nse.
It is
des
igne
d to
ens
ure
a st
rong
and
con
sist
ent
cont
rol e
nviro
nmen
t acr
oss
the
orga
niza
tion.
Ove
rsig
ht
& Co
ntro
l Offi
cers
(Con
trol
Offi
cers
) are
em
bedd
ed in
th
e bu
sine
sses
(and
, sim
ilarl
y, in
the
corp
orat
e fu
nctio
ns
and
regi
ons)
to h
elp
driv
e th
e co
ntro
l age
nda
acro
ss a
co
mm
on fi
rmw
ide
fram
ewor
k.
In th
is c
apac
ity, t
he C
ontr
ol O
ffice
rs s
erve
as
part
of t
he
first
line
of d
efen
se to
hel
p m
aint
ain
an e
ffect
ive
cont
rol
envi
ronm
ent.
Cont
rol O
ffice
rs re
port
dire
ctly
to th
e lin
e of
bus
ines
s, w
ith a
n ad
ditio
nal r
epor
ting
line
to th
e co
mpa
ny’s
Chie
f Con
trol
Offi
cer.
The
step
s w
e ar
e ta
king
to im
prov
e th
e fir
st li
ne o
f de
fens
e ar
e re
late
d to
five
com
mon
are
as:
busi
ness
Enha
ncin
g ou
r co
ntro
l pra
ctic
es in
the
lines
of b
usin
ess
Acro
ss o
ur c
ompa
ny, w
e ha
ve e
nhan
ced
our
cont
rol
prac
tices
with
the
obje
ctiv
e th
at e
ach
busi
ness
w
ill o
pera
te in
a w
ay th
at e
mbo
dies
our
cor
pora
te
stan
dard
s. B
elow
are
sev
eral
initi
ativ
es th
at d
emon
-st
rate
the
brea
dth
and
dept
h of
thes
e eff
orts
.
Ente
rpri
se-w
ide
prog
ram
s
A se
ries
of e
nter
pris
e-w
ide
prog
ram
s ha
s be
en a
pr
imar
y fo
cus.
The
se p
rogr
ams,
whi
ch a
re d
riven
by
the
Oper
atin
g Co
mm
ittee
and
repo
rted
to o
ur B
oard
, add
ress
si
gnifi
cant
, com
plex
, con
trol
-rel
ated
mat
ters
that
are
of
ten
cros
s-lin
e of
bus
ines
s an
d cr
oss-
geog
raph
ies.
Th
ey a
re m
atte
rs w
e be
lieve
sho
uld
be e
xam
ined
on
an
ente
rpris
e-w
ide
basi
s an
d, in
som
e in
stan
ces,
are
driv
en
by re
gula
tory
requ
irem
ents
. Our
goa
l is
to a
ppro
pria
tely
an
d co
nsis
tent
ly m
anag
e th
e as
soci
ated
risk
s an
d bu
ild
sust
aina
ble
and
cons
iste
nt s
olut
ions
. We
cont
inue
to
mak
e pr
ogre
ss o
n th
ese
prog
ram
s, in
clud
ing:
initi
ativ
es to
pro
perl
y as
sess
and
und
erst
and
the
risk
s to
the
com
pany
and
our
clie
nts/
cust
omer
s be
fore
we
intr
oduc
e ne
w p
rodu
cts,
ser
vice
s or
re
late
d ac
tiviti
es
and
back
offi
ces
to m
anag
e th
ese
rela
tions
hips
and
th
eir
asso
ciat
ed r
isks
to a
com
mon
set
of h
ighl
y de
velo
ped
stan
dard
s
Fede
ral R
eser
ve B
oard
’s Co
mpr
ehen
sive
Cap
ital a
nd
Anal
ysis
Rev
iew
and
Dod
d-Fr
ank
Act S
tres
s Te
stin
g ca
pita
l req
uire
men
ts, a
s w
ell a
s th
e co
ordi
natio
n of
the
com
pany
’s im
plem
enta
tion
of th
e Ba
sel
Com
mitt
ee o
n Ba
nkin
g Su
perv
isio
n’s
prin
cipl
es fo
r eff
ectiv
e ri
sk d
ata
aggr
egat
ion
and
risk
repo
rtin
g
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T31
As p
rogr
am w
ork
tran
sitio
ns to
the
norm
al c
ours
e of
bu
sine
ss, w
e le
vera
ge o
ur e
xist
ing
gove
rnan
ce (R
isk
and
Cont
rol c
omm
ittee
s an
d ris
k an
d co
ntro
l sel
f-ass
essm
ents
) to
ach
ieve
ong
oing
sus
tain
abili
ty.
Anti
-Mon
ey L
aund
erin
g an
d Kn
ow Y
our
Cust
omer
The
com
pany
dev
otes
spe
cial
ized
att
entio
n to
com
pli-
ance
with
the
law
s an
d re
gula
tions
gov
erni
ng a
nti-
mon
ey la
unde
ring
(AM
L) a
nd te
rror
ist fi
nanc
ing,
ec
onom
ic s
anct
ions
and
ant
i-cor
rupt
ion
effor
ts. W
orki
ng
clos
ely
with
the
Glob
al F
inan
cial
Cri
mes
Com
plia
nce
(GFC
C) g
roup
(dis
cuss
ed o
n pa
ge 5
1), t
he b
usin
esse
s ha
ve m
ade
a nu
mbe
r of
enh
ance
men
ts to
Kno
w Y
our
Cust
omer
(KYC
) and
AM
L pr
oces
ses,
incl
udin
g th
e de
velo
pmen
t of m
ore
stri
ngen
t sta
ndar
ds th
at re
quire
ca
ptur
ing
and
fully
doc
umen
ting
deta
iled
clie
nt in
form
a-tio
n be
fore
an
acco
unt i
s op
ened
. Exa
mpl
es o
f spe
cific
im
prov
emen
ts in
clud
e:
AML/
KYC
oper
atin
g m
odel
with
regi
onal
AM
L/KY
C su
ppor
t tea
ms
that
alig
n to
sub
-line
s of
bus
ines
s.
This
incl
udes
add
ing
KYC
Offi
cers
who
par
tner
clo
sely
w
ith b
anke
rs to
ens
ure
timel
y an
d th
orou
gh c
ompl
e-tio
n of
clie
nt d
ocum
enta
tion
prog
ram
man
agem
ent a
nd c
reat
ing
team
s of
sub
ject
m
atte
r ex
pert
s th
at s
it w
ithin
the
busi
ness
es
-m
entin
g cl
ient
info
rmat
ion
and
refin
ing
clie
nt
onbo
ardi
ng te
chno
logy
to a
utom
ate
prev
ious
ly
man
ual p
roce
sses
clie
nts
enab
le u
s to
bet
ter
mon
itor
AML/
KYC
activ
ities
busi
ness
sta
ff in
ord
er to
incr
ease
acc
ount
abili
ty
AML/
KYC
trai
ning
pro
gram
for
fron
t offi
ce a
nd o
per-
atio
ns p
erso
nnel
Confl
icts
of i
nter
est
Due
to th
e br
eadt
h of
our
bus
ines
ses,
pot
entia
l con
flict
s of
inte
rest
may
aris
e in
a n
umbe
r of w
ays
and
form
s.
We
have
an
oblig
atio
n to
trea
t all
clie
nts
fairl
y. T
he
com
pany
’s po
licie
s an
d pr
oced
ures
are
des
igne
d to
ens
ure
that
the
com
pany
pay
s du
e re
gard
to th
e in
tere
sts
of e
ach
clie
nt a
nd m
anag
es a
ny p
oten
tial
confl
ict o
f int
eres
t app
ropr
iate
ly a
nd c
onsi
sten
tly w
ith
our C
ode
of C
ondu
ct a
nd B
usin
ess
Prin
cipl
es.
Sinc
e co
nflic
ts m
ay d
iffer
con
side
rabl
y ac
ross
line
s of
bu
sine
ss, i
n ad
ditio
n to
our
pol
icie
s an
d pr
oced
ures
, m
ultip
le c
ompl
emen
tary
con
trol
gro
ups,
incl
udin
g a
Confl
icts
Offi
ce, O
vers
ight
& C
ontr
ol, C
ompl
ianc
e an
d Le
gal,
wor
k cl
osel
y w
ith o
ur b
usin
ess
exec
utiv
es to
id
entif
y an
d m
anag
e th
e co
nflic
ts th
at a
rise,
bot
h re
al
and
perc
eive
d.
In g
ener
al, p
rior t
o se
ekin
g or
acc
eptin
g ne
w fi
nanc
ial
advi
sory
eng
agem
ents
, und
erw
ritin
g en
gage
men
ts (d
ebt
and
equi
ty),
arra
ngin
g ba
nk fi
nanc
ing
or m
akin
g ne
w
priv
ate
equi
ty in
vest
men
ts, a
s w
ell a
s en
gagi
ng in
cer
tain
ot
her t
rans
actio
ns, s
uch
as u
nusu
al o
r lar
ge e
quity
der
iv-
ativ
e tr
ansa
ctio
ns, t
he C
onfli
cts
Office
revi
ews
and
clea
rs
the
prop
osed
act
ivity
in c
onsu
ltatio
n w
ith th
e ap
pro-
pria
te m
anag
ers
and,
whe
re a
ppro
pria
te, o
ther
con
trol
fu
nctio
ns. C
lear
ance
from
the
Confl
icts
Offi
ce a
lso
is
requ
ired
for a
ny u
nder
taki
ngs
or a
gree
men
ts w
ith c
lient
s th
at re
stric
t the
com
pany
’s ab
ility
to e
ngag
e in
act
iviti
es
for o
ther
clie
nts,
whe
ther
thos
e ar
e fin
anci
ng a
ctiv
ities
, ad
viso
ry a
ctiv
ities
or o
ther
wis
e. In
add
ition
, for
fina
ncin
g an
d ad
viso
ry a
ctiv
ities
, the
Con
flict
s Offi
ce e
valu
ates
pr
opos
ed d
eal t
eam
sta
ffing
to h
elp
ensu
re th
at c
onfi-
dent
ial c
lient
info
rmat
ion
is a
ppro
pria
tely
saf
egua
rded
.
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T32 Ac
ross
our
bus
ines
ses,
we
cont
inue
to re
fine
and
stre
ngth
en o
ur c
onfli
cts
man
agem
ent p
ract
ices
. For
ex
ampl
e, A
sset
Man
agem
ent h
as re
cent
ly c
reat
ed a
n en
hanc
ed c
onfli
cts
of in
tere
st fr
amew
ork
that
pro
vide
s a
disc
iplin
ed a
nd s
truc
ture
d ap
proa
ch to
con
flict
s,
incl
udin
g id
entifi
catio
n of
pot
entia
l con
flict
s pr
esen
t in
a b
usin
ess
unit’
s pr
oces
ses
and
a se
lf-as
sess
men
t to
dete
rmin
e w
heth
er c
ontr
ols
are
oper
atin
g as
exp
ecte
d.
Each
con
flict
is a
sses
sed
usin
g fo
ur p
illar
s: p
olic
ies
and
proc
edur
es, g
over
nanc
e an
d ov
ersi
ght,
disc
losu
res
and
valid
atio
n. T
he p
illar
fram
ewor
k pr
ovid
es m
inim
um
stan
dard
s to
driv
e gl
obal
con
sist
ency
whi
le a
llow
ing
for a
ppro
pria
te re
gion
al d
iffer
ence
s. T
he b
usin
ess
has
trai
ned
mor
e th
an 7
00 k
ey p
erso
nnel
on
confl
icts
m
anag
emen
t, th
e co
ntro
l fra
mew
ork
and
the
step
s to
co
nduc
t an
asse
ssm
ent.
Thro
ugh
the
enha
ncem
ent a
nd
impl
emen
tatio
n of
the
confl
icts
fram
ewor
k, e
mpl
oyee
s ha
ve b
een
furt
her e
duca
ted
on th
e id
entifi
catio
n an
d m
anag
emen
t of p
oten
tial c
onfli
cts.
We
now
are
impl
e-m
entin
g a
sim
ilar f
ram
ewor
k fo
r con
flict
s m
anag
emen
t ac
ross
the
com
pany
.
Man
agin
g en
viro
nmen
tal a
nd s
ocia
l ris
k in
tr
ansa
ctio
ns
Our f
ront
-line
sta
ff al
so is
trai
ned
to id
entif
y an
d ev
alua
te p
oten
tial e
nviro
nmen
tal a
nd s
ocia
l ris
ks
asso
ciat
ed w
ith c
erta
in tr
ansa
ctio
ns in
volv
ing
corp
orat
e le
ndin
g, d
ebt a
nd e
quity
und
erw
ritin
g, a
nd a
dvis
ory
serv
ices
. The
com
pany
pro
vide
s fin
anci
al s
ervi
ces
to
clie
nts
in in
dust
ries
that
are
crit
ical
ena
bler
s of
eco
nom
ic
grow
th a
nd s
ocia
l dev
elop
men
t, su
ch a
s oi
l and
gas
, m
inin
g an
d el
ectr
ic p
ower
– b
ut th
at a
lso
have
the
pote
ntia
l to
crea
te a
rang
e of
adv
erse
env
ironm
enta
l and
so
cial
impa
cts.
Thro
ugh
our c
onfli
cts
of in
tere
st p
roce
ss, w
e ap
ply
spec
ific
crite
ria to
tran
sact
ions
with
bot
h ne
w a
nd
exis
ting
clie
nts
to d
eter
min
e w
heth
er a
n en
viro
n-m
enta
l and
soc
ial r
isk
revi
ew is
nee
ded
and
to e
stab
lish
wha
t lev
el o
f due
dili
genc
e is
requ
ired.
The
se c
riter
ia
are
desc
ribed
in o
ur E
nviro
nmen
tal a
nd S
ocia
l Pol
icy
fram
ewor
k an
d in
clud
e:
oper
atin
g, a
s w
ell a
s th
e pr
opos
ed u
se o
f pro
ceed
s fr
om th
e tr
ansa
ctio
n
oil p
rodu
ctio
n an
d un
conv
entio
nal o
il an
d ga
s de
vel-
opm
ent,
incl
udin
g hy
drau
lic fr
actu
ring
, and
exp
lora
-tio
n an
d de
velo
pmen
t in
the
Arct
ic
Equa
tor
Prin
cipl
es, w
hich
app
ly to
the
follo
win
g fin
anci
al p
rodu
cts:
pro
ject
fina
nce,
pro
ject
-rel
ated
co
rpor
ate
loan
s an
d br
idge
loan
s
evid
ence
of f
orce
d or
chi
ld la
bor
All t
rans
actio
ns th
at re
quire
revi
ew a
re e
scal
ated
to th
e Gl
obal
Env
ironm
enta
l and
Soc
ial R
isk
Man
agem
ent t
eam
an
d ar
e ca
tego
rized
bas
ed o
n w
heth
er th
e pe
rcei
ved
leve
l of e
nviro
nmen
tal a
nd s
ocia
l ris
k is
hig
h, m
ediu
m o
r lo
w. R
ecen
t enh
ance
men
ts in
clud
e:
Polic
y fr
amew
ork
impa
ct m
anag
emen
t for
ons
hore
Nor
th A
mer
ican
cl
ient
s en
gage
d in
sha
le o
il an
d ga
s op
erat
ions
2013
; tra
inin
g ha
s co
ntin
ued
in 2
014
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T33
Sale
s an
d tr
adin
g pr
acti
ces
In th
e fir
st q
uart
er o
f 201
4, th
e CI
B la
unch
ed a
com
pre-
hens
ive
revi
ew to
ana
lyze
and
mak
e im
prov
emen
ts to
ou
r sa
les
and
trad
ing
prac
tices
and
rela
ted
com
mun
i-ca
tions
. We
expe
ct o
ur s
ales
and
trad
ing
pers
onne
l not
on
ly to
trea
t cus
tom
ers
fair
ly b
ut to
act
in a
man
ner
that
su
ppor
ts w
ell-f
unct
ioni
ng, t
rans
pare
nt m
arke
ts.
We
reco
gniz
ed th
at e
nhan
cing
mar
ket c
ondu
ct w
ould
re
quire
usi
ng m
ultip
le p
reve
ntiv
e an
d de
tect
ive
leve
rs
in a
coo
rdin
ated
way
. For
exa
mpl
e, th
e re
view
took
into
co
nsid
erat
ion
vari
ous
mea
ns to
est
ablis
h in
form
atio
n ba
rrie
rs; c
ondu
ct c
omm
unic
atio
ns a
nd tr
ansa
ctio
n su
rvei
llanc
e; a
dopt
pol
icie
s; im
plem
ent t
rain
ing;
and
in
corp
orat
e en
hanc
ed s
uper
visi
on, c
ompe
nsat
ion
and
disc
losu
re p
ract
ices
.
In th
e fir
st p
hase
of t
he re
view
, the
bus
ines
s en
hanc
ed
info
rmat
ion
barr
iers
by
impl
emen
ting
new
pol
icie
s ar
ound
ele
ctro
nic
chat
and
laun
ched
an
effor
t to
incr
ease
and
impr
ove
com
mun
icat
ions
gui
delin
es a
nd
surv
eilla
nce
of c
hat a
nd e
mai
l. In
the
seco
nd p
hase
, we
are
carr
ying
out
a re
view
of i
nfor
mat
ion
flow
s in
the
Mar
kets
bus
ines
ses,
furt
her
refin
ing
elec
tron
ic c
hat
guid
elin
es, c
ontin
uing
enh
ance
men
t of s
urve
illan
ce a
nd
prio
ritiz
ing
othe
r is
sues
for
revi
ew.
The
proj
ect s
eeks
to id
entif
y ce
rtai
n pe
r se
pro
hibi
ted
com
mun
icat
ions
and
set
fort
h pr
inci
ples
gov
erni
ng
perm
itted
com
mun
icat
ions
— in
clud
ing
info
rmat
ion
to
be s
hare
d on
a n
eed-
to-k
now
bas
is a
nd o
nly
for
legi
t-im
ate
busi
ness
pur
pose
s, s
uch
as tr
ade
exec
utio
n or
cl
arifi
catio
n of
ope
ratio
nal d
etai
ls. O
ur e
ffort
s ov
er th
e pa
st y
ear
incl
ude:
glob
al g
over
nanc
e fr
amew
ork.
The
com
mitt
ee is
ch
arge
d w
ith s
ettin
g po
licy
and
stan
dard
s an
d cr
eatin
g an
ope
ratin
g m
odel
to s
uppo
rt a
glo
bal
com
mun
icat
ions
sur
veill
ance
pro
gram
. The
co
mm
ittee
als
o is
inte
grat
ing
curr
ent p
ilot p
roje
cts
and
iden
tifyi
ng te
chno
logy
opt
ions
that
sup
port
en
hanc
emen
ts a
nd a
targ
et-s
tate
vis
ion
adde
d Co
mpl
ianc
e su
rvei
llanc
e em
ploy
ees
glob
ally
th
roug
h th
e se
cond
and
third
qua
rter
s of
201
4
-no
logy
for
surv
eilla
nce
by p
artic
ipat
ing
in a
pilo
t as
sess
men
t exp
ecte
d to
be
com
plet
ed b
y m
id-2
015
vend
ors
arou
nd c
urre
nt a
nd fu
ture
ava
ilabi
lity
of
enha
nced
tool
s to
mon
itor
chat
room
par
ticip
atio
n
Addi
tiona
lly, i
n De
cem
ber
2013
, the
CIB
impl
emen
ted
a po
licy
that
pro
hibi
ts s
taff
from
par
ticip
atin
g in
ele
c-tr
onic
cha
ts o
r in
stan
t mes
sagi
ng g
roup
s w
ith tw
o or
m
ore
othe
r ba
nks/
deal
ers.
The
pro
hibi
tion
appl
ies
to
com
mun
icat
ions
with
thir
d-pa
rty
trad
ing
desk
s th
at a
re
com
petit
ors
or m
arke
t-m
aker
s, a
s w
ell a
s br
oker
s or
in
ter-
deal
er b
roke
rs.
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T34 Ca
se s
tudy
: Cyb
erse
curi
ty
Defe
ndin
g th
e in
form
atio
n of
our
cus
tom
ers,
em
ploy
ees
and
the
com
pany
’s cy
ber
asse
ts is
of p
aram
ount
impo
r-ta
nce.
Rec
ent e
vent
s, b
oth
at th
e co
mpa
ny a
nd a
t oth
er
larg
e co
rpor
atio
ns, d
emon
stra
te th
e in
crea
sing
impa
ct
and
risk
from
ext
erna
l and
inte
rnal
thre
ats.
Impo
rtan
tly,
to d
ate,
cyb
er a
ttac
ks o
n JP
Mor
gan
Chas
e by
mal
icio
us
acto
rs h
ave
not r
esul
ted
in m
ater
ial h
arm
to o
ur
cust
omer
s an
d ha
ve n
ot h
ad a
mat
eria
l adv
erse
effe
ct
on o
ur re
sults
or
oper
atio
ns.
We
have
est
ablis
hed
a cy
ber d
efen
se s
trat
egy
and
firm
- w
ide
cybe
rsec
urity
pro
gram
bui
lt on
five
key
prin
cipl
es:
cybe
r ac
tivity
-m
ent a
nd th
roug
hout
the
cybe
rspa
ce e
cosy
stem
We
devo
te s
igni
fican
t res
ourc
es to
the
firm
wid
e cy
ber-
secu
rity
prog
ram
to p
rote
ct th
e co
mpa
ny’s
com
pute
r sy
stem
s, s
oftw
are,
net
wor
ks a
nd o
ther
tech
nolo
gy a
sset
s ag
ains
t att
empt
s by
third
par
ties
to o
btai
n un
auth
oriz
ed
acce
ss to
con
fiden
tial c
ompa
ny a
nd c
usto
mer
info
rma-
tion,
des
troy
dat
a, d
isru
pt o
r deg
rade
ser
vice
, sab
otag
e sy
stem
s or
cau
se o
ther
dam
age.
By
the
end
of 2
014,
the
com
pany
will
hav
e sp
ent m
ore
than
$25
0 m
illio
n an
nual
ly
and
will
hav
e ab
out 1
,000
peo
ple
focu
sed
on c
yber
secu
-rit
y. W
e pl
an to
gro
w th
ese
effor
ts o
ver t
he c
omin
g ye
ars.
Foun
datio
nal i
nitia
tives
with
in th
e pr
ogra
m in
clud
e:
prot
ectin
g th
e cu
stom
er; p
rote
ctin
g th
e co
mpa
ny’s
core
sy
stem
s; e
ncry
ptio
n; id
entit
y an
d ac
cess
man
agem
ent;
asse
t man
agem
ent;
and
build
ing
a se
curi
ty c
ultu
re. O
ur
Prot
ectin
g th
e Co
mpa
ny’s
Core
Sys
tem
s in
itiat
ive
is a
ce
ntra
l com
pone
nt o
f our
long
-ter
m e
ffort
s. W
e ha
ve
esta
blis
hed
an a
sses
smen
t fra
mew
ork
to id
entif
y cr
itica
l bu
sine
ss s
ervi
ces
with
hig
h se
nsiti
vity
to c
yber
thre
ats,
id
entif
y ri
sks
and
asse
ss e
nhan
cem
ent o
ppor
tuni
ties,
an
d ex
ecut
e re
med
iatio
n.
In a
dditi
on to
our
long
-ter
m e
ffort
s, w
e ar
e ta
king
oth
er
step
s to
impr
ove
our c
yber
secu
rity
capa
bilit
ies,
incl
udin
g:
prov
ide
over
sigh
t and
gui
danc
e to
our
cyb
erse
-cu
rity
pro
gram
thro
ugh
wee
kly
upda
tes
with
the
com
pany
’s C
hief
Ope
ratin
g O
ffice
r an
d th
e cr
eatio
n of
a C
yber
secu
rity
Exe
cutiv
e Co
unci
l, w
hich
mee
ts
on a
mon
thly
bas
is a
nd is
com
pris
ed o
f bus
ines
s,
cont
rol a
nd te
chno
logy
lead
ers
Ope
ratio
ns C
ente
rs in
our
regi
onal
hea
dqua
rter
s in
As
ia, E
urop
e an
d th
e Un
ited
Stat
es, p
rovi
ding
poi
nts
of c
oord
inat
ion
for
iden
tifyi
ng th
reat
s, e
xecu
ting
resp
onse
pro
cedu
res
and
coor
dina
ting
our
glob
al
Cybe
rsec
urity
ope
ratio
ns
initi
ativ
e to
hel
p us
enh
ance
our
sec
urity
pra
ctic
es,
with
a p
artic
ular
focu
s on
mul
tifac
tor
auth
entic
a-tio
n, s
ecur
e se
rver
bui
lds,
acc
ess
self-
atte
stat
ion,
pe
rim
eter
lock
dow
n, v
ulne
rabi
lity
rem
edia
tion
and
info
rmat
ion
tech
nolo
gy r
isk
exce
ptio
n
self-
asse
ssm
ent p
roce
sses
with
in th
e bu
sine
sses
We
reco
gniz
e th
at c
yber
secu
rity
nee
ds to
be
an o
ngoi
ng
effor
t and
bel
ieve
our
mul
tifac
eted
app
roac
h of
bot
h sh
ort-
and
long
-ter
m p
rogr
ams
will
ena
ble
us to
pro
tect
th
e co
mpa
ny to
day
and
be fl
exib
le to
add
ress
evo
lvin
g th
reat
s in
the
futu
re.
34H
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T35
Suit
abili
ty
In A
sset
Man
agem
ent’s
Glo
bal W
ealth
Man
agem
ent
busi
ness
, an
impo
rtan
t con
side
ratio
n w
hen
advi
sing
cl
ient
s is
the
suita
bilit
y an
d ap
prop
riat
enes
s of
reco
m-
men
ded
inve
stm
ents
. Tha
t is
why
our
adv
isor
s pe
rfor
m
and
docu
men
t a c
lient
sui
tabi
lity
asse
ssm
ent t
hat
dete
rmin
es if
our
bro
kera
ge, a
dvis
ory
and
inve
stm
ent
man
agem
ent s
ervi
ces
are
suita
ble
for
that
par
ticul
ar
clie
nt. T
he b
usin
ess’
sui
tabi
lity
fram
ewor
k ha
s be
en
enha
nced
dur
ing
the
past
sev
eral
yea
rs a
nd in
clud
es:
clie
nt’s
risk
tole
ranc
e (e
.g.,
the
clie
nt’s
pers
onal
co
mfo
rt le
vel i
n ta
king
ris
ks),
as w
ell a
s ri
sk c
apac
ity
(e.g
., th
e cl
ient
’s fin
anci
al a
bilit
y to
bea
r a
loss
)
incl
udes
eva
luat
ing
the
com
plex
ity o
f the
pro
duct
an
d its
leve
l of r
isk
addi
tiona
l lev
el o
f che
cks
and
bala
nces
Inve
stin
g in
tech
nolo
gy
Tech
nolo
gy is
a c
ritic
al to
ol in
enh
anci
ng o
ur c
ontr
ol
effor
ts, e
nabl
ing
us to
aut
omat
e pr
evio
usly
man
ual
proc
esse
s an
d co
ntro
ls to
red
uce
com
plex
ity a
nd
impr
ove
accu
racy
. In
addi
tion
to in
vest
men
ts m
ade
by
cont
rol f
unct
ions
, eac
h lin
e of
bus
ines
s ha
s in
vest
ed
sign
ifica
ntly
in im
prov
ing
cont
rol-r
elat
ed te
chno
logy
. Sp
ecifi
cally
, the
line
s of
bus
ines
s ar
e im
plem
entin
g si
gnifi
cant
tech
nolo
gy im
prov
emen
ts r
elat
ed to
AM
L an
d KY
C pr
ogra
ms,
incl
udin
g:
all c
lient
s, ta
ilore
d to
the
spec
ific
char
acte
rist
ics,
ri
sk p
rofil
es, i
nfor
mat
ion
requ
irem
ents
and
eva
l-ua
tion
crite
ria
of d
iffer
ent c
lient
type
s. T
he n
ew
KYC
syst
ems
also
incl
ude
acco
unt a
nd p
rodu
ct d
ue
dilig
ence
for
risk
ier
prod
uct t
ypes
and
an
Offi
ce o
f Fo
reig
n As
sets
Con
trol
onb
oard
ing
ques
tionn
aire
activ
ity-s
peci
fic tr
igge
rs to
esc
alat
e ce
rtai
n si
tuat
ions
to
KYC
and
GFC
C ex
pert
s fo
r fur
ther
revi
ew a
s ne
eded
. Th
is a
lso
incl
udes
cha
nnel
s al
low
ing
our f
ront
-line
em
ploy
ees
to ro
ute
info
rmat
ion
rega
rdin
g po
tent
ially
su
spic
ious
act
ivity
to o
ur In
vest
igat
ions
team
syst
ems
to e
nhan
ce c
ompl
ianc
e w
ith o
ur re
gula
tory
re
port
ing
oblig
atio
ns
-ac
tion
mon
itori
ng a
nd s
anct
ions
scr
eeni
ng. F
or
exam
ple,
inst
ead
of h
avin
g m
ultip
le s
epar
ate
sanc
tions
scr
eeni
ng s
olut
ions
, the
line
s of
bus
ines
s w
ill u
se th
e fir
mw
ide
sanc
tions
scr
eeni
ng u
tility
, w
hich
bri
ngs
cons
iste
ncy
and
incr
ease
d tr
ansp
aren
cy
to s
anct
ions
scr
eeni
ng
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T36 To
faci
litat
e be
tter
mon
itori
ng a
nd m
anag
emen
t of t
he
com
pany
’s co
ntro
l env
ironm
ent,
Ove
rsig
ht &
Con
trol
has
es
tabl
ishe
d a
tech
nolo
gy-e
nabl
ed C
ontr
ols
Room
at o
ur
corp
orat
e he
adqu
arte
rs. T
he C
ontr
ols
Room
mai
ntai
ns a
re
posi
tory
of fi
rmw
ide
cont
rol-r
elat
ed in
form
atio
n an
d en
able
s ra
pid
acce
ss to
rele
vant
dat
a, re
port
ing
capa
bil-
ities
and
sop
hist
icat
ed a
naly
tics.
It h
as a
cen
tral
team
of
data
sci
entis
ts a
nd re
port
ing
anal
ysts
.
Sim
plif
ying
and
de-
risk
ing
our
busi
ness
Our
line
s of
bus
ines
s ha
ve u
nder
take
n an
agg
res-
sive
pro
gram
to s
impl
ify a
nd d
e-ri
sk o
ur b
usin
ess.
Sp
ecifi
cally
, our
bus
ines
ses
look
ed to
elim
inat
e pr
oduc
ts
and
serv
ices
that
are
not
ess
entia
l to
serv
ing
our
cust
omer
s or
pro
mot
ing
our
busi
ness
es a
nd to
dis
con-
tinue
cer
tain
bus
ines
s w
ith s
elec
t clie
nts.
Thi
s en
able
s ou
r bu
sine
sses
to fo
cus
on th
e m
ost i
mpo
rtan
t act
iviti
es
for
our
core
clie
nts
and
bett
er m
anag
e ou
r op
erat
iona
l, re
gula
tory
and
lega
l ris
ks.
To d
eter
min
e ho
w to
sim
plify
and
de-
risk
our
bus
ines
s,
each
line
of b
usin
ess
cond
ucte
d du
e di
ligen
ce o
n its
po
rtfo
lio to
revi
ew a
var
iety
of f
acto
rs, i
nclu
ding
:
cust
omer
s fo
r whi
ch m
oney
laun
derin
g ris
k is
too
high
for w
hich
val
ue to
our
cus
tom
ers
does
not
mee
t cos
ts,
incl
udin
g co
mpl
ianc
e an
d ris
k m
anag
emen
t cos
ts
Exam
ples
of d
e-ris
king
thro
ugh
the
elim
inat
ion
of
prod
ucts
and
ser
vice
s th
at a
re n
ot c
ore
to o
ur c
usto
mer
s or
that
hav
e ou
tsiz
ed o
pera
tiona
l ris
k in
clud
e:
Exam
ples
of d
e-ri
skin
g th
roug
h cl
ient
sel
ectio
n an
d di
scon
tinua
tion
of c
erta
in b
usin
ess
with
sel
ect c
lient
s in
clud
e:
clie
nts
expo
sed
pers
ons
Impo
rtan
tly, w
e do
not
bel
ieve
thes
e ch
ange
s w
ill
adve
rsel
y aff
ect o
ur c
ore
fran
chis
es. W
hile
dev
elop
ing
and
pilo
ting
new
pro
duct
s, s
ervi
ces
and
busi
ness
line
s is
a c
ritic
al p
art o
f wha
t we
do, s
o, to
o, is
the
proc
ess
of
regu
larl
y an
d ca
refu
lly p
runi
ng th
ose
item
s th
at h
ave
not m
et o
ur e
xpec
tatio
ns o
r th
at d
o no
t fit w
ith o
ur
cont
rol e
nviro
nmen
t or
busi
ness
str
ateg
y.
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T37
Case
stu
dy: E
nhan
ced
cont
rols
for
payd
ay le
ndin
g
JPM
orga
n Ch
ase
does
not
eng
age
in th
e bu
sine
ss o
f pa
yday
lend
ing.
How
ever
, som
e of
our
cus
tom
ers
do r
ely
on p
ayda
y lo
ans
— s
mal
l, sh
ort-
term
loan
s th
at u
sual
ly c
arry
a h
igh
inte
rest
rat
e —
from
thir
d-pa
rty
lend
ers
to m
anag
e da
y-to
-day
exp
ense
s an
d em
erge
ncy
finan
cial
nee
ds.
Unfo
rtun
atel
y, s
ome
of th
ese
thir
d-pa
rty
lend
ers
use
unfa
ir a
nd a
busi
ve c
olle
ctio
n pr
actic
es th
at c
an c
ause
ou
r cu
stom
ers
finan
cial
har
dshi
p. F
or e
xam
ple,
lend
ers
may
sub
mit
pote
ntia
lly u
naut
hori
zed
tran
sact
ions
to
a cu
stom
ers’
pri
mar
y ba
nk a
nd/o
r de
bit f
unds
from
a
bank
acc
ount
mul
tiple
tim
es in
a d
ay, w
hich
can
resu
lt in
m
ultip
le re
turn
ed it
em fe
es.
Bank
s ca
me
unde
r cr
itici
sm fr
om re
gula
tors
and
co
nsum
er a
dvoc
acy
grou
ps fo
r no
t lim
iting
som
e pa
yday
le
nder
s’ c
olle
ctio
n pr
actic
es. A
s a
resu
lt, w
e re
view
ed
our
polic
ies,
sys
tem
s an
d pr
oces
ses
to d
ecre
ase
finan
cial
bur
dens
on
our
cust
omer
s an
d hi
nder
pay
day
lend
ers’
abi
lity
to e
ngag
e in
pre
dato
ry c
olle
ctio
n pr
actic
es. S
ome
of th
e im
prov
emen
ts w
e ha
ve m
ade
are
disc
usse
d be
low
.
Elim
inat
ing
mul
tipl
e re
turn
ed it
em fe
es
In th
e pa
st, w
hen
payd
ay le
nder
s at
tem
pted
to d
ebit
fund
s fr
om a
n ac
coun
t mul
tiple
tim
es in
one
day
, an
acco
unt w
as c
harg
ed a
max
imum
of t
hree
retu
rned
ite
m fe
es p
er d
ay. W
e re
vise
d ou
r po
licie
s an
d sy
stem
s so
that
acc
ount
s w
ould
be
char
ged
a re
turn
ed it
em fe
e on
ly o
nce
per
mon
th fo
r th
e sa
me
paym
ent r
eque
st.
This
has
resu
lted
in a
34%
dec
reas
e in
tota
l ret
urne
d ite
m fe
es fo
r ou
r cu
stom
ers.
Enha
nced
pol
icy
trai
ning
and
sys
tem
s fo
r st
op
paym
ent r
eque
sts
Our
revi
ew re
veal
ed th
at s
ome
cust
omer
s fo
und
it di
fficu
lt to
initi
ate
stop
pay
men
t req
uest
s an
d th
at p
ayda
y le
nder
s co
uld
avoi
d be
ing
subj
ect t
o a
stop
pay
men
t by
subm
ittin
g tr
ansa
ctio
ns o
f var
ying
am
ount
s. A
s a
resu
lt, w
e m
ade
it ea
sier
for
cust
omer
s to
initi
ate
stop
pay
men
ts a
nd im
prov
ed o
ur s
yste
ms
by:
on e
xist
ing
polic
ies
for
taki
ng a
nd p
roce
ssin
g st
op
paym
ent r
eque
sts
by a
mer
chan
t sub
ject
to a
sto
p pa
ymen
t req
uest
w
ould
be
reje
cted
eve
n w
here
the
tran
sact
ion
amou
nts
vari
ed
Sinc
e th
ese
chan
ges,
sto
p pa
ymen
t req
uest
s ha
ve
incr
ease
d by
app
roxi
mat
ely
30%
, and
the
num
ber
of
aut
omat
ed c
lear
ing
hous
e de
bit t
rans
actio
ns
that
wer
e re
turn
ed d
ue to
a s
top
paym
ent r
ose
by
appr
oxim
atel
y 15
0%.
37H
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T38H
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
38
NAC
HA
init
iati
ves
We
are
wor
king
clo
sely
with
the
Nat
iona
l Aut
omat
ed
Clea
ring
Hou
se A
ssoc
iatio
n (N
ACH
A) to
dev
elop
new
st
anda
rds
to a
ddre
ss c
once
rns
rela
ting
to p
ayda
y le
nder
pra
ctic
es. E
nhan
cem
ents
in w
hich
we
have
bee
n in
volv
ed in
clud
e:
will
allo
w N
ACH
A to
initi
ate
an in
quir
y pr
oces
s in
to
orig
inat
ors
that
hav
e ex
cess
ive
retu
rns
entit
ies
that
hav
e un
auth
oriz
ed a
utom
ated
cle
arin
g ho
use
debi
t tra
nsac
tions
retu
rned
We
are
oppo
sed
to u
nfai
r, ab
usiv
e or
ille
gal a
ctiv
ity
by p
ayda
y le
nder
s. N
ot a
ll pa
yday
lend
ers
enga
ge in
th
ese
pred
ator
y ac
tiviti
es, b
ut fo
r th
ose
that
do,
we
are
com
mitt
ed to
hel
p pr
otec
t our
cus
tom
ers.
Acco
unt c
losu
re w
ith
a pe
ndin
g tr
ansa
ctio
n an
d/or
a n
egat
ive
bala
nce
Unde
r ou
r pr
ior
polic
y, a
cus
tom
er w
as n
ot a
ble
to c
lose
hi
s or
her
acc
ount
if, f
or e
xam
ple,
the
acco
unt h
ad a
pe
ndin
g tr
ansa
ctio
n or
a n
egat
ive
bala
nce.
As
a re
sult,
pa
yday
lend
ers
coul
d co
ntin
ue to
sub
mit
paym
ent
requ
ests
to a
n ac
coun
t a c
usto
mer
was
tryi
ng to
clo
se,
whi
ch le
d to
add
ition
al re
turn
ed it
em fe
es a
nd th
e cu
stom
er’s
cont
inue
d in
abili
ty to
clo
se a
n ac
coun
t.
To m
ake
it ea
sier
for
cust
omer
s to
clo
se a
n ac
coun
t, ou
r sy
stem
s an
d po
licie
s w
ere
revi
sed
so th
at a
ccou
nts
can
be c
lose
d ev
en if
ther
e is
an
open
or
pend
ing
char
ge
or if
an
acco
unt h
as a
neg
ativ
e ba
lanc
e. A
fter
thes
e ch
ange
s, a
ppro
xim
atel
y 15
% to
20%
of t
he a
ccou
nts
clos
ed e
ach
mon
th h
ave
a pe
ndin
g tr
ansa
ctio
n or
a
nega
tive
bala
nce
at th
e tim
e a
cust
omer
requ
ests
cl
osin
g an
acc
ount
.
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T3838
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
TFI
RST
LIN
E O
F D
EFEN
SE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T39
Build
ing
and
stre
ngth
enin
g O
vers
ight
&
Cont
rol
Ove
rsig
ht &
Con
trol
was
est
ablis
hed
in 2
012
to b
ring
gr
eate
r fo
cus
and
disc
iplin
e to
our
con
trol
effo
rts
both
w
ithin
and
acr
oss
our
lines
of b
usin
ess,
cor
pora
te
func
tions
and
regi
ons.
The
com
pany
has
dev
oted
su
bsta
ntia
l res
ourc
es to
form
aliz
ing
the
Ove
rsig
ht &
Co
ntro
l fun
ctio
n. T
he fu
nctio
n w
ill h
ave
mor
e th
an 2
,400
em
ploy
ees
by th
e en
d of
201
4 th
roug
h a
com
bina
tion
of th
e re
depl
oym
ent o
f exi
stin
g st
aff d
oing
this
type
of
wor
k an
d ne
w h
ires.
The
Chie
f Con
trol
Offi
cer
repo
rts
to th
e Ch
ief O
pera
ting
Offi
cer
of th
e co
mpa
ny a
nd p
artn
ers
clos
ely
with
the
Chie
f Com
plia
nce
Offi
cer,
Chie
f Ris
k O
ffice
r, Ge
nera
l Co
unse
l and
bus
ines
s he
ads,
am
ong
othe
rs. L
ine
of
busi
ness
and
cor
pora
te fu
nctio
n Co
ntro
l Offi
cers
dua
lly
repo
rt in
to th
eir
line
of b
usin
ess
or c
orpo
rate
func
tion
and
the
Chie
f Con
trol
Offi
cer.
Ove
rsig
ht &
Con
trol
als
o in
clud
es s
ever
al c
entr
al te
ams
repo
rtin
g to
the
Chie
f Co
ntro
l Offi
cer,
incl
udin
g th
e Co
ntro
ls R
oom
team
, the
Su
perv
isor
y Re
gula
tory
Str
ateg
y te
am a
nd th
e Pr
oces
s &
Cont
rol O
vers
ight
team
.
Area
s of
focu
s fo
r O
vers
ight
& C
ontr
ol in
clud
e:
End-
to-e
nd o
vers
ight
of i
ssue
man
agem
ent —
Id
entifi
catio
n, m
easu
rem
ent,
mon
itori
ng a
nd
man
agem
ent o
f ris
ks a
nd s
tren
gthe
ning
of c
ontr
ols
and
self-
iden
tifica
tion
proc
esse
s
Stan
dard
ized
rep
orti
ng a
nd a
naly
sis
of is
sues
for
tren
ds a
nd p
oten
tial
impa
ct to
oth
er b
usin
esse
s an
d fu
ncti
ons
— R
egul
ar re
port
ing
and
esca
latio
n of
con
trol
-rel
ated
issu
es in
the
lines
of b
usin
ess,
fu
nctio
ns a
nd re
gion
s an
d co
nsid
erat
ion
of p
oten
tial
appl
icab
ility
to o
ther
rele
vant
are
as
Sust
aina
ble
rem
edia
tion
(inc
ludi
ng r
egul
ator
y is
sues
) — D
evel
opm
ent o
f a c
onsi
sten
t app
roac
h to
(i) r
esol
ve c
ontr
ol is
sues
in a
tim
ely
man
ner,
(ii)
addr
ess
root
cau
ses
(not
sym
ptom
s), a
nd (i
ii) e
nsur
e ac
tions
take
n ar
e su
stai
nabl
e ov
er th
e lo
ng te
rm
Maj
or c
ontr
ol p
rogr
ams
— Im
plem
enta
tion
of
risk
and
con
trol
sel
f-as
sess
men
ts (d
escr
ibed
be
low
), as
wel
l as
eith
er d
irect
ow
ners
hip
or p
rogr
am
over
sigh
t of t
he c
ompa
ny’s
ente
rpris
e-w
ide
prog
ram
s (d
escr
ibed
on
page
30)
, suc
h as
our
New
Bus
ines
s In
itiat
ive
Appr
oval
pro
cess
and
thir
d-pa
rty
over
sigh
t, am
ong
othe
rs
Cont
rol g
over
nanc
e m
odel
— E
xecu
tion
of th
is m
odel
w
ithin
the
lines
of b
usin
ess,
func
tions
and
regi
ons
Impl
emen
ting
Ris
k an
d Co
ntro
l Se
lf-As
sess
men
ts
Cont
rol O
ffice
rs h
ave
impl
emen
ted
a co
mm
on r
isk
and
cont
rol s
elf-a
sses
smen
t pro
cess
, whi
ch w
as d
esig
ned
by
Risk
as
part
of a
bro
ader
ope
ratio
nal r
isk
man
agem
ent
fram
ewor
k. T
he C
ontr
ols
Room
with
in O
vers
ight
&
Cont
rol f
acili
tate
s co
nsis
tent
impl
emen
tatio
n of
ris
k an
d co
ntro
l sel
f-ass
essm
ents
by
Cont
rol O
ffice
rs. T
he
prog
ram
pro
vide
s co
mm
on s
tand
ards
for
all l
ines
of
busi
ness
and
func
tions
to:
plac
e to
miti
gate
key
risk
s
loss
es, o
pera
tiona
l fai
lure
s, re
gula
tory
impa
ct o
r in
tern
al p
olic
y vi
olat
ions
-ne
sses
, with
spe
cific
acc
ount
abili
ty a
nd re
spon
sibi
lity
assi
gned
for
timel
y re
solu
tion
impr
ovem
ent p
rior
ities
The
asse
ssm
ent o
f ris
ks a
nd c
ontr
ols
is a
n on
goin
g pr
oces
s th
at re
quire
s fo
rmal
revi
ew a
t lea
st a
nnua
lly.
FIR
ST L
INE
OF
DEF
ENSE
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T40 CO
NTR
OL
FUN
CTIO
NS
Acro
ss th
e co
mpa
ny, w
e ha
ve m
ade
subs
tant
ial i
nves
t-m
ents
and
tran
sfor
mat
ive
chan
ges
aim
ed a
t str
engt
h-en
ing
our
cont
rol f
unct
ions
. Our
end
-to-
end
cont
rol
agen
da fo
cuse
s on
ear
ly is
sue
iden
tifica
tion,
sw
ift
esca
latio
n an
d su
stai
nabl
e re
med
iatio
n. In
add
ition
to
Ove
rsig
ht &
Con
trol
, the
follo
win
g fo
ur fu
nctio
ns a
re
part
of o
ur c
ontr
ol fr
amew
ork:
Ove
rsig
ht &
Con
trol
is d
escr
ibed
on
prev
ious
pag
es in
this
se
ctio
n. C
onsi
sten
t with
its
wor
k as
par
t of t
he b
usin
esse
s,
Over
sigh
t & C
ontr
ol h
as C
ontr
ol O
ffice
rs e
mbe
dded
in
each
of t
he fu
nctio
ns. T
hey
repo
rt d
irect
ly to
thei
r res
pec-
tive
func
tion
and
have
an
addi
tiona
l rep
ortin
g lin
e to
the
com
pany
’s Ch
ief C
ontr
ol O
ffice
r.
The
follo
win
g pa
ges
desc
ribe
act
ions
we
have
take
n to
en
hanc
e Ri
sk, F
inan
ce, C
ompl
ianc
e an
d Le
gal.
Risk
Risk
is a
n in
here
nt p
art o
f our
com
pany
’s bu
sine
ss a
ctiv
-iti
es. W
hen
we
exte
nd a
con
sum
er o
r co
mm
erci
al lo
an,
advi
se c
usto
mer
s on
thei
r in
vest
men
t dec
isio
ns, m
ake
mar
kets
in s
ecur
ities
, or
cond
uct a
ny n
umbe
r of
oth
er
serv
ices
or
activ
ities
, we
take
on
som
e de
gree
of r
isk.
W
e ai
m to
man
age
and
bala
nce
risk
in a
man
ner
that
se
rves
the
inte
rest
s of
our
clie
nts,
cus
tom
ers
and
shar
e-ho
lder
s, a
s w
ell a
s th
e he
alth
of t
he fi
nanc
ial s
yste
m.
The
com
pany
’s ap
proa
ch to
ris
k m
anag
emen
t cov
ers
a br
oad
spec
trum
of r
isk
area
s, s
uch
as c
redi
t, m
arke
t, liq
uidi
ty, m
odel
, str
uctu
ral i
nter
est r
ate,
pri
ncip
al,
coun
try,
ope
ratio
nal,
fiduc
iary
and
repu
tatio
n.
We
belie
ve th
at e
ffect
ive
risk
man
agem
ent r
equi
res
acce
ptan
ce o
f res
pons
ibili
ty b
y al
l ind
ivid
uals
with
in th
e co
mpa
ny, o
wne
rshi
p of
risk
man
agem
ent w
ithin
eac
h lin
e of
bus
ines
s an
d fir
mw
ide
stru
ctur
es fo
r ris
k go
vern
ance
. Th
e co
mpa
ny’s
risk
man
agem
ent f
ram
ewor
k is
inte
nded
to
cre
ate
a cu
lture
of t
rans
pare
ncy,
aw
aren
ess
and
pers
onal
resp
onsi
bilit
y th
roug
h re
port
ing,
col
labo
ratio
n,
disc
ussi
on, e
scal
atio
n an
d sh
arin
g of
info
rmat
ion.
Org
aniz
atio
n
The
Risk
org
aniz
atio
n is
man
aged
on
a fir
mw
ide
basi
s. It
op
erat
es in
depe
nden
tly fr
om th
e re
venu
e-ge
nera
ting
busi
-ne
sses
, whi
ch e
nabl
es it
to p
rovi
de c
redi
ble
chal
leng
e to
th
em. O
ur C
hief
Ris
k Offi
cer (
CRO)
is th
e he
ad o
f the
Ris
k or
gani
zatio
n an
d is
resp
onsi
ble
for t
he o
vera
ll di
rect
ion
of
Risk
ove
rsig
ht.
The
CRO
is s
uppo
rted
by
indi
vidu
als
and
orga
niza
tions
th
at a
lign
to li
nes
of b
usin
ess
and
func
tions
, as
wel
l as
oth
ers
that
alig
n to
spe
cific
ris
k ty
pes.
The
aim
of
this
str
uctu
re is
to a
ssig
n ow
ners
hip
and
acco
unt-
abili
ty w
ithin
the
busi
ness
are
as w
hile
dis
sem
inat
ing
best
pra
ctic
es th
roug
h de
ep s
ubje
ct m
atte
r ex
pert
ise.
O
ver
the
past
few
yea
rs, w
e ha
ve m
ade
a nu
mbe
r of
en
hanc
emen
ts to
our
org
aniz
atio
nal s
truc
ture
and
st
affing
, inc
ludi
ng:
firm
wid
e Ri
sk fu
nctio
ns a
nd w
ithin
the
line
of
busi
ness
Ris
k ar
eas.
Exa
mpl
es in
clud
e:
— A
ppoi
ntin
g ex
ecut
ives
to o
vers
ee m
arke
t ris
k,
mod
el r
isk
and
fiduc
iary
ris
k ac
ross
the
com
pany
— C
reat
ing
or e
xpan
ding
role
s w
ithin
the
line
of
busi
ness
Ris
k ar
eas,
suc
h as
the
appo
intm
ent o
f an
Ope
ratio
nal R
isk
Offi
cer
in e
ach
line
of b
usin
ess
and
the
appo
intm
ent o
f des
igna
ted
indi
vidu
als
to
over
see
fiduc
iary
ris
k in
eac
h lin
e of
bus
ines
s
CON
TRO
L FU
NCT
ION
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T41
the
Risk
func
tions
. Exa
mpl
es in
clud
e:
— A
ppoi
ntin
g a
Cont
rol O
ffice
r to
prov
ide
over
sigh
t of
the
cont
rol e
nviro
nmen
t with
in th
e Ri
sk o
rgan
izat
ion
— C
reat
ing
Chie
f Fin
anci
al O
ffice
r and
Chi
ef
Info
rmat
ion
Office
r rol
es th
at s
pan
Risk
, Fin
ance
an
d Te
chno
logy
in o
rder
to s
tren
gthe
n th
e st
rate
gic
busi
ness
sup
port
, inf
rast
ruct
ure
and
cont
rol
fram
ewor
k ac
ross
Ris
k, F
inan
ce a
nd T
echn
olog
y
— A
ppoi
ntin
g a
firm
wid
e Ch
ief D
ata
Offi
cer,
as w
ell
as a
Dat
a O
ffice
r fo
r ea
ch li
ne o
f bus
ines
s to
dr
ive
firm
wid
e po
licy,
con
sist
ent p
roce
dure
s an
d co
mm
on s
tand
ards
for
data
man
agem
ent
Gove
rnan
ce
The
inde
pend
ent s
tatu
re o
f the
Ris
k or
gani
zatio
n is
su
ppor
ted
by a
gov
erna
nce
stru
ctur
e th
at p
rovi
des
for
esca
latio
n of
ris
k is
sues
up
to s
enio
r m
anag
emen
t and
th
e Bo
ard.
We
have
take
n si
gnifi
cant
ste
ps to
str
engt
hen
our
risk
gov
erna
nce
prac
tices
and
str
uctu
re, i
nclu
ding
:
shar
ed w
ith th
e Bo
ard
of D
irect
ors’
Ris
k Po
licy
Com
mitt
ee a
nd e
nhan
cing
eng
agem
ent w
ith th
e m
embe
rs o
f the
com
mitt
ee. M
embe
rs o
f the
Ris
k or
gani
zatio
n m
eet w
ith th
e Bo
ard
of D
irect
ors’
Ris
k Po
licy
Com
mitt
ee o
ften
to p
rovi
de u
pdat
es o
n ke
y ri
sk is
sues
. In
thei
r ro
le a
s pa
rt o
f the
firs
t lin
e of
de
fens
e, e
ach
line
of b
usin
ess
CEO
als
o pa
rtic
ipat
es
duri
ng th
is u
pdat
e to
pro
vide
a b
usin
ess
pers
pect
ive
com
mitt
ee is
the
high
est m
anag
emen
t-le
vel R
isk
com
mitt
ee w
ithin
the
com
pany
and
is c
o-ch
aire
d by
th
e co
mpa
ny’s
CEO
and
CRO
. It s
erve
s as
an
esca
-la
tion
poin
t for
ris
k to
pics
and
issu
es ra
ised
by
its
mem
bers
, the
line
of b
usin
ess
Risk
com
mitt
ees,
and
ot
her
subo
rdin
ate
com
mitt
ees
like
the
Firm
wid
e Co
ntro
l Com
mitt
ee, F
irm
wid
e Fi
duci
ary
Risk
Co
mm
ittee
, Rep
utat
ion
Risk
com
mitt
ees
and
regi
onal
Ri
sk c
omm
ittee
s
to th
e CE
O a
nd to
the
Boar
d of
Dire
ctor
s’ R
isk
Polic
y Co
mm
ittee
(see
pag
e 28
)
Addi
tiona
l inf
orm
atio
n ab
out i
mpr
ovem
ents
to r
isk
gove
rnan
ce is
ava
ilabl
e be
ginn
ing
on p
age
28. T
he
sche
mat
ic o
n pa
ge 2
9 re
flect
s th
e co
mpa
ny’s
ris
k go
vern
ance
str
uctu
re a
nd c
erta
in k
ey m
anag
e-m
ent-
leve
l com
mitt
ees
that
are
pri
mar
ily r
espo
nsib
le
for
key
risk
-rel
ated
func
tions
. The
re a
re a
dditi
onal
co
mm
ittee
s no
t rep
rese
nted
in th
e ch
art (
e.g.
, som
e fu
nctio
nal f
orum
s th
at c
ompr
ise
our
risk
gov
erna
nce
fram
ewor
k) th
at a
lso
are
resp
onsi
ble
for
man
agem
ent
and
over
sigh
t of r
isk.
Risk
app
etit
e
The
risk
app
etite
fram
ewor
k is
a to
ol to
mea
sure
the
com
pany
’s ca
paci
ty to
take
ris
k ag
ains
t its
sta
ted
guid
elin
es. T
he c
ompa
ny’s
over
all r
isk
appe
tite
is e
stab
-lis
hed
by m
anag
emen
t in
acco
rdan
ce w
ith th
e Bo
ard
of
Dire
ctor
s’ R
isk
Appe
tite
polic
y, ta
king
into
con
side
ratio
n th
e co
mpa
ny’s
capi
tal a
nd li
quid
ity p
ositi
ons,
ear
ning
s po
wer
and
div
ersi
fied
busi
ness
mod
el.
Vari
ous
initi
ativ
es h
ave
been
und
erw
ay to
impr
ove
the
com
pany
’s ri
sk a
ppet
ite fr
amew
ork,
incl
udin
g:
proc
esse
s to
info
rm d
ecis
ions
on
sett
ing
the
risk
ap
petit
e
abou
t ris
k ap
petit
e
CON
TRO
L FU
NCT
ION
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
42 Risk
man
agem
ent a
ppro
ach
by r
isk
area
In it
s ro
le a
s an
org
aniz
atio
n in
depe
nden
t of t
he re
ve-
nue-
gene
ratin
g bu
sine
sses
, the
Ris
k or
gani
zatio
n de
sign
s an
d ov
erse
es a
ris
k m
anag
emen
t fra
mew
ork
acro
ss th
e co
mpa
ny. T
he fo
llow
ing
page
s de
scri
be h
ow
we
have
enh
ance
d ou
r ab
ility
to m
anag
e ri
sk.
Cred
it r
isk
The
com
pany
pro
vide
s cr
edit
to a
var
iety
of c
usto
mer
s,
rang
ing
from
larg
e co
rpor
ate
and
inst
itutio
nal c
lient
s to
in
divi
dual
con
sum
ers
and
smal
l bus
ines
ses.
Cre
dit r
isk
is th
e ri
sk o
f los
s ar
isin
g fr
om th
e de
faul
t of a
cus
tom
er,
clie
nt o
r co
unte
rpar
ty. T
he C
redi
t Ris
k M
anag
emen
t fu
nctio
n id
entifi
es, m
easu
res,
lim
its, m
anag
es a
nd
mon
itors
cre
dit r
isk
acro
ss o
ur b
usin
esse
s.
Rece
nt w
hole
sale
cre
dit r
isk
deve
lopm
ents
incl
ude:
and
limits
acr
oss
all l
ines
of b
usin
ess
in o
rder
to
fost
er b
est p
ract
ices
-w
orks
and
allo
wan
ce p
roce
ss
Rece
nt c
onsu
mer
cre
dit r
isk
deve
lopm
ents
incl
ude:
finan
cial
fore
cast
ing,
incl
udin
g im
prov
ed in
form
atio
n te
chno
logy
and
dat
a in
fras
truc
ture
with
enh
ance
d m
etri
cs a
nd m
onito
ring
Bank
ing
busi
ness
es’ (
e.g.
, Bus
ines
s Ba
nkin
g, D
eale
r Co
mm
erci
al S
ervi
ces)
pol
icie
s an
d pr
actic
es w
ith
Com
mer
cial
Ban
king
Mar
ket r
isk
Mar
ket r
isk
is th
e po
tent
ial f
or a
dver
se c
hang
es in
the
valu
e of
the
com
pany
’s as
sets
and
liab
ilitie
s re
sulti
ng
from
cha
nges
in m
arke
t var
iabl
es. T
he M
arke
t Ris
k fu
nctio
n se
eks
to c
ontr
ol r
isk,
faci
litat
e effi
cien
t ris
k/re
turn
dec
isio
ns, r
educ
e vo
latil
ity in
ope
ratin
g pe
rfor
-m
ance
and
pro
vide
tran
spar
ency
into
the
com
pany
’s m
arke
t ris
k pr
ofile
. We
have
mad
e va
riou
s en
hanc
e-m
ents
to th
e m
arke
t ris
k fr
amew
ork,
incl
udin
g:
prom
ote
cons
iste
ncy
acro
ss th
e co
mpa
ny’s
line
of
busi
ness
Mar
ket R
isk
team
s
to in
clud
e ad
ditio
nal e
scal
atio
n of
age
d or
sig
nific
ant
limit
brea
ches
the
com
pany
Liqu
idit
y ri
sk
Liqu
idity
ris
k m
anag
emen
t is
inte
nded
to e
nsur
e th
at
the
com
pany
has
the
appr
opri
ate
amou
nt, c
ompo
si-
tion
and
teno
r of
fund
ing
and
liqui
dity
in s
uppo
rt o
f its
ass
ets.
The
pri
mar
y ob
ject
ives
of e
ffect
ive
liqui
dity
m
anag
emen
t are
to e
nsur
e th
at th
e co
mpa
ny’s
core
bu
sine
sses
can
mee
t con
trac
tual
and
con
tinge
nt o
blig
a-tio
ns th
roug
h no
rmal
eco
nom
ic c
ycle
s an
d m
arke
t str
ess
even
ts. R
ecen
t im
prov
emen
ts in
clud
e:
Over
sigh
t fun
ctio
n in
to th
e Ri
sk o
rgan
izat
ion,
whi
ch
prov
ides
inde
pend
ent a
sses
smen
t, m
onito
ring,
con
trol
an
d tr
ansp
aren
cy o
f liq
uidi
ty ri
sks
acro
ss th
e co
mpa
ny
CON
TRO
L FU
NCT
ION
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T43
incl
udin
g en
hanc
ing
stre
ss te
stin
g as
sum
ptio
ns,
stre
ngth
enin
g th
e co
ntro
l and
gov
erna
nce
mod
el,
and
impr
ovin
g id
entifi
catio
n of
liqu
idity
ris
ks
plat
form
(liq
uidi
ty r
isk
infr
astr
uctu
re) t
o m
ater
i-al
ly e
nhan
ce th
e au
tom
atio
n of
liqu
idity
and
str
ess
test
ing
func
tiona
lity
Mod
el r
isk
The
com
pany
em
ploy
s m
odel
s to
val
ue a
nd m
anag
e fin
anci
al p
rodu
cts,
ass
ess
port
folio
ris
k an
d co
mpu
te
risk
-wei
ghte
d as
sets
, inf
orm
dec
isio
ns a
bout
ext
en-
sion
s of
cre
dit,
and
supp
ort o
r au
tom
ate
trad
ing
and
inve
stm
ent d
ecis
ions
, am
ong
othe
r pu
rpos
es.
For
exam
ple,
val
uatio
n m
odel
s ar
e em
ploy
ed b
y th
e co
mpa
ny to
val
ue c
erta
in fi
nanc
ial i
nstr
umen
ts th
at
othe
rwis
e ca
nnot
be
valu
ed u
sing
quo
ted
pric
es. T
hese
va
luat
ion
mod
els
also
may
be
empl
oyed
as
inpu
ts to
ri
sk m
anag
emen
t mod
els,
incl
udin
g Va
lue-
at-R
isk
(VaR
) an
d ec
onom
ic s
tres
s m
odel
s.
Our
Mod
el R
isk
and
Deve
lopm
ent u
nit p
rovi
des
over
sigh
t of t
he fi
rmw
ide
Mod
el R
isk
polic
y, p
rovi
des
guid
ance
with
resp
ect t
o th
e ap
prop
riat
e us
age
of o
ur
mod
els
and
cond
ucts
inde
pend
ent r
evie
ws
of m
odel
s.
We
are
cont
inui
ng to
str
engt
hen
the
team
and
its
prac
tices
, inc
ludi
ng th
roug
h:
into
Mod
el R
evie
w a
nd G
over
nanc
e fu
nctio
ns
prac
tices
to e
stab
lish
firm
wid
e st
anda
rds
for
mod
el r
isk
man
agem
ent
Stru
ctur
al in
tere
st r
ate
risk
The
com
pany
man
ages
inte
rest
rate
ris
k (i.
e., e
xpos
ure
rela
ted
to c
hang
es in
inte
rest
rate
s as
they
affe
ct o
ur
asse
ts a
nd li
abili
ties)
on
a co
nsol
idat
ed, fi
rmw
ide
basi
s. B
usin
ess
units
effe
ctiv
ely
tran
sfer
thei
r in
tere
st
rate
ris
k to
the
Trea
sury
and
Chi
ef In
vest
men
t Offi
ce
to b
e m
anag
ed c
entr
ally
. The
com
pany
man
ages
the
inte
rest
rate
risk
prim
arily
thro
ugh
the
inve
stm
ent
secu
ritie
s po
rtfo
lio a
nd o
ther
mar
ket-
base
d in
stru
men
ts.
Stru
ctur
al in
tere
st ra
te r
isk
is s
ubje
ct to
tole
ranc
es
set b
y th
e in
depe
nden
t Str
uctu
ral I
nter
est R
ate
Risk
fu
nctio
n. O
ur re
cent
enh
ance
men
ts to
str
engt
hen
the
func
tion
incl
ude:
gove
rnan
ce m
odel
and
inst
ill th
ough
tful
bes
t pr
actic
es w
ith m
arke
t-ba
sed
disc
iplin
e
polic
y as
a B
oard
-leve
l pol
icy
-ri
ally
enh
ance
the
auto
mat
ion
of in
tere
st ra
te r
isk
mea
sure
men
t, m
odel
dev
elop
men
t, re
port
ing
and
data
inte
grat
ion
Prin
cipa
l ris
k
Prin
cipa
l inv
estm
ents
gen
eral
ly a
re in
tend
ed to
be
held
ove
r ex
tend
ed in
vest
men
t per
iods
, and
, acc
ord-
ingl
y, th
e co
mpa
ny h
as n
o ex
pect
atio
n fo
r sh
ort-
term
gai
n w
ith r
espe
ct to
thes
e in
vest
men
ts. S
uch
inve
stin
g ac
tiviti
es in
clud
e pr
ivat
e eq
uity
inve
stm
ents
, m
ezza
nine
fina
ncin
g an
d ta
x-or
ient
ed in
vest
men
ts.
A nu
mbe
r of
pri
ncip
al in
vest
ing
busi
ness
es a
re b
eing
re
posi
tione
d or
exi
ted,
con
sist
ent w
ith th
e co
mpa
ny’s
st
rate
gic
focu
s an
d bu
sine
ss s
impl
ifica
tion
prog
ram
s,
ongo
ing
capi
tal a
nd b
alan
ce s
heet
liqu
idity
pri
oriti
es,
and
regu
lato
ry d
evel
opm
ents
.
CON
TRO
L FU
NCT
ION
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
44 Coun
try
risk
Coun
try
risk
is th
e ri
sk th
at a
sov
erei
gn e
vent
or
actio
n al
ters
the
valu
e or
term
s of
con
trac
tual
obl
igat
ions
of
oblig
ors,
cou
nter
part
ies
and
issu
ers
or a
dver
sely
affe
cts
mar
kets
rela
ted
to a
par
ticul
ar c
ount
ry. T
he c
ompa
ny
has
a co
mpr
ehen
sive
cou
ntry
ris
k m
anag
emen
t fr
amew
ork
for
asse
ssin
g co
untr
y ri
sks,
det
erm
inin
g ri
sk
tole
ranc
e, a
nd m
easu
ring
and
mon
itori
ng d
irect
cou
ntry
ex
posu
res
in th
e co
mpa
ny. O
ur re
cent
enh
ance
men
ts to
st
reng
then
the
gove
rnan
ce a
nd m
anag
emen
t of c
ount
ry
risk
incl
ude:
coun
try
a ro
bust
set
of m
arke
t sho
cks
on a
sset
s
capi
tal m
easu
res
Ope
rati
onal
ris
k
Ope
ratio
nal r
isk
is in
here
nt in
eac
h of
the
com
pany
’s lin
es o
f bus
ines
s an
d co
rpor
ate
func
tions
. Ope
ratio
nal
risk
can
man
ifest
itse
lf in
var
ious
way
s, in
clud
ing
erro
rs,
frau
dule
nt a
cts,
bus
ines
s in
terr
uptio
ns, i
napp
ropr
iate
be
havi
or o
f em
ploy
ees,
failu
re to
com
ply
with
app
licab
le
law
s an
d re
gula
tions
or
failu
re o
f ven
dors
to p
erfo
rm
in a
ccor
danc
e w
ith th
eir
arra
ngem
ents
. To
mon
itor
and
cont
rol o
pera
tiona
l ris
k, th
e co
mpa
ny h
as d
evel
oped
an
ope
ratio
nal r
isk
man
agem
ent f
ram
ewor
k (O
RMF)
th
at c
onsi
sts
of fo
ur c
ompo
nent
s: o
vers
ight
and
gov
er-
nanc
e, c
apita
l mea
sure
men
t, ri
sk s
elf-a
sses
smen
t, an
d re
port
ing
and
mon
itori
ng.
Ope
ratio
nal r
isk
gove
rnan
ce d
efine
s an
d m
aint
ains
th
e O
RMF
thro
ugh
the
deve
lopm
ent o
f pol
icie
s an
d st
anda
rds
appl
icab
le to
all
lines
of b
usin
ess
and
corp
orat
e fu
nctio
ns, i
nclu
ding
Ris
k, F
inan
ce,
Com
plia
nce,
Tec
hnol
ogy
and
Hum
an R
esou
rces
. Lin
es
of b
usin
ess
and
corp
orat
e fu
nctio
ns a
re re
spon
sibl
e fo
r ex
ecut
ion
agai
nst t
he O
RMF.
Ope
ratio
nal r
isk
gove
r-na
nce
may
inde
pend
ently
cha
lleng
e th
e ex
ecut
ion
of th
e O
RMF
acro
ss th
e co
mpa
ny. V
ario
us in
itiat
ives
und
erw
ay
to im
prov
e th
e O
RMF
incl
ude:
deci
sion
s, a
s w
ell a
s op
erat
iona
l ris
k ap
petit
e as
sess
men
ts
Fidu
ciar
y ri
sk
Fidu
ciar
y ris
k is
the
risk
of a
failu
re to
exe
rcis
e th
e ap
pli-
cabl
e hi
gh s
tand
ard
of c
are,
to a
ct in
the
best
inte
rest
s of
clie
nts
or to
trea
t clie
nts
fairl
y, a
s re
quire
d un
der
appl
icab
le la
w o
r reg
ulat
ion.
We
have
enh
ance
d se
vera
l as
pect
s of
our
gov
erna
nce
of fi
duci
ary
risk,
incl
udin
g:
outli
nes
role
s an
d re
spon
sibi
litie
s ac
ross
bus
ines
ses
prov
ides
ove
rsig
ht o
f the
inhe
rent
ris
ks in
the
firm
’s fid
ucia
ry a
ctiv
ities
CON
TRO
L FU
NCT
ION
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T45
Rep
utat
ion
risk
Mai
ntai
ning
the
com
pany
’s re
puta
tion
is th
e re
spon
si-
bilit
y of
eac
h in
divi
dual
em
ploy
ee o
f the
com
pany
. The
co
mpa
ny’s
Repu
tatio
n Ri
sk p
olic
y ex
plic
itly
vest
s ea
ch
empl
oyee
with
the
resp
onsi
bilit
y to
con
side
r th
e re
puta
-tio
n of
the
com
pany
whe
n en
gagi
ng in
any
act
ivity
. Ove
r th
e pa
st s
ever
al y
ears
, the
com
pany
has
take
n st
eps
to
prom
ote
the
cons
iste
nt m
anag
emen
t of r
eput
atio
n ri
sk
firm
wid
e, in
clud
ing:
grou
p
repu
tatio
n ri
sk g
over
nanc
e fr
amew
ork
agai
nst
benc
hmar
k cr
iteri
a
each
line
of b
usin
ess
has
impl
emen
ted
in g
uide
lines
re
flect
ive
of it
s bu
sine
ss m
odel
Fina
nce
The
Fina
nce
grou
p pl
ays
an e
ssen
tial r
ole
in th
e da
y-to
-day
man
agem
ent o
f the
com
pany
and
is a
cri
tical
co
mpo
nent
of t
he e
nd-t
o-en
d co
ntro
l env
ironm
ent.
Fina
nce
is a
ccou
ntab
le fo
r th
e ac
cura
cy, i
nteg
rity
and
tim
elin
ess
of th
e co
mpa
ny’s
book
s an
d re
cord
s an
d ex
tern
al re
port
s an
d fil
ings
in a
ccor
danc
e w
ith a
ppli-
cabl
e ac
coun
ting
prin
cipl
es a
nd re
gula
tory
requ
ire-
men
ts. T
he F
inan
ce fu
nctio
n ac
ts a
s a
stew
ard
on b
ehal
f of
sha
reho
lder
s th
roug
h th
e pr
omot
ion
of a
ppro
pria
te
acco
untin
g pr
actic
es, f
ortr
ess
bala
nce
shee
t pri
ncip
les
and
capi
tal m
anag
emen
t.
In a
dditi
on, F
inan
ce fa
cilit
ates
the
deve
lopm
ent a
nd
exec
utio
n of
bus
ines
s st
rate
gy th
roug
h bu
sine
ss
man
agem
ent a
nd p
lann
ing
and
anal
ysis
, whi
ch s
uppo
rt
man
agem
ent’s
dec
isio
n-m
akin
g pr
oces
s. T
he c
ompa
ny’s
over
all s
trat
egic
and
fina
ncia
l obj
ectiv
es a
re m
easu
red
thro
ugh
a se
ries
of fi
nanc
ial a
nd re
gula
tory
targ
ets
and
ratio
s, b
oth
at th
e fir
mw
ide
and
line
of b
usin
ess
leve
l.
Org
aniz
atio
n
Ove
rall
resp
onsi
bilit
y fo
r Fi
nanc
e lie
s w
ith th
e co
mpa
ny’s
Chie
f Fin
anci
al O
ffice
r, a
mem
ber
of th
e O
pera
ting
Com
mitt
ee w
ho re
port
s to
the
CEO
of t
he
com
pany
. The
com
pany
’s ne
arly
8,1
00 F
inan
ce p
rofe
s-si
onal
s ar
e or
gani
zed
into
cor
pora
te fu
nctio
ns a
nd li
ne
of b
usin
ess-
alig
ned
func
tions
, with
the
line
of b
usi-
ness
-alig
ned
func
tions
hav
ing
mat
rixe
d re
port
ing
lines
to
the
Chie
f Fin
anci
al O
ffice
r. In
this
way
, eac
h lin
e of
bu
sine
ss is
acc
ount
able
for
man
agin
g its
fina
nce-
rela
ted
activ
ities
, with
ove
rall
resp
onsi
bilit
y fo
r th
e fu
nctio
n in
to
talit
y re
mai
ning
with
the
Chie
f Fin
anci
al O
ffice
r.
Ove
r the
pas
t sev
eral
yea
rs, w
e ha
ve m
ade
nota
ble
chan
ges
with
in th
e Fi
nanc
e or
gani
zatio
n to
bet
ter a
lign
the
func
tion
with
how
we
man
age
our b
usin
ess
and
to
inco
rpor
ate
new
regu
lato
ry re
quire
men
ts. I
mpo
rtan
t ex
ampl
es in
clud
e in
vest
ing
sign
ifica
nt a
dditi
onal
re
sour
ces
in k
ey fi
rmw
ide
cont
rol f
unct
ions
, inc
ludi
ng
CON
TRO
L FU
NCT
ION
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
46 regu
lato
ry c
apita
l man
agem
ent,
valu
atio
n co
ntro
l, qu
ality
as
sura
nce,
and
ded
icat
ed c
ontr
olle
rshi
p fu
nctio
ns fo
r Ri
sk, T
ax, C
apita
l and
JPM
orga
n Ch
ase
Bank
, N.A
.
As p
art o
f our
goa
l to
impr
ove
cons
iste
ncy
acro
ss th
e co
mpa
ny, w
e al
so e
xpan
ded
the
Valu
atio
n Co
ntro
l gro
up
to b
e a
firm
wid
e fu
nctio
n. T
he V
alua
tion
Cont
rol g
roup
is
acc
ount
able
for
inde
pend
ently
ver
ifyin
g th
e va
luat
ion
of a
sset
s an
d lia
bilit
ies
reco
rded
on
the
com
pany
’s ba
lanc
e sh
eet a
t fai
r va
lue.
As
part
of t
he e
xpan
sion
of
the
grou
p’s
resp
onsi
bilit
ies,
we
also
mad
e si
gnifi
cant
in
vest
men
ts in
infr
astr
uctu
re, i
ncre
ased
ski
ll le
vels
and
th
e nu
mbe
r of
reso
urce
s de
dica
ted
to th
is e
ffort
, and
re
valid
ated
the
grou
p’s
polic
ies
and
proc
edur
es.
Gove
rnan
ce
The
finan
cial
per
form
ance
of t
he c
ompa
ny a
nd k
ey
Fina
nce-
rela
ted
issu
es a
re re
gula
rly
sche
dule
d ag
enda
ite
ms
for
the
Boar
d of
Dire
ctor
s. B
elow
are
sev
eral
im
port
ant e
xam
ples
of t
he B
oard
of D
irect
ors’
ove
rsig
ht:
annu
ally
by
the
Audi
t Com
mitt
ee o
f the
Boa
rd o
f Di
rect
ors
Anal
ysis
and
Rev
iew
, and
the
Base
l cap
ital p
rogr
am
are
peri
odic
ally
revi
ewed
with
the
Boar
d of
Dire
ctor
s’
Risk
Pol
icy
Com
mitt
ee a
nd A
udit
Com
mitt
ee a
nd th
e fu
ll Bo
ard
of D
irect
ors
Ove
r th
e pa
st s
ever
al y
ears
, we
also
revi
ewed
and
st
reng
then
ed o
ur g
over
nanc
e pr
actic
es to
ens
ure
we
have
the
appr
opri
ate
seni
or m
anag
emen
t ove
rsig
ht
of c
ritic
al p
roce
sses
and
sus
tain
able
rem
edia
tion
of
issu
es th
at a
rise
. We
crea
ted
and
enha
nced
a n
umbe
r of
Fi
nanc
e go
vern
ance
foru
ms,
incl
udin
g:
-lis
hed
in M
arch
201
3, w
hich
rev
iew
s, a
sses
ses
and
prov
ides
ove
rsig
ht o
f ris
k an
d co
ntro
l iss
ues
acro
ss
glob
al F
inan
ce
also
est
ablis
hed
in M
arch
201
3, w
hich
ove
rsee
s th
e ca
pita
l ade
quac
y as
sess
men
t pro
cess
and
is
resp
onsi
ble
for
revi
ewin
g th
e co
mpa
ny’s
Capi
tal
Man
agem
ent p
olic
y an
d th
e pr
inci
ples
und
erly
ing
issu
ance
and
dis
trib
utio
n al
tern
ativ
es a
nd d
ecis
ions -
lishe
d in
the
four
th q
uart
er o
f 201
2, w
hich
ove
rsee
s th
e m
anag
emen
t of a
ll ri
sks
aris
ing
from
the
com
pany
’s ba
lanc
e sh
eet v
alua
tion
activ
ities
Com
mitt
ee, c
reat
ed in
Janu
ary
2014
, whi
ch
gove
rns
the
lead
ban
k’s
activ
ities
in c
ompl
ianc
e
with
regu
lato
ry H
eigh
tene
d St
anda
rds
The
Fina
nce
& R
isk
Road
Map
The
com
pany
’s CF
O a
nd th
e Fi
nanc
e m
anag
emen
t te
am a
naly
zed
the
stab
ility
of t
he e
nd-t
o-en
d Fi
nanc
e pr
oces
ses
and
laun
ched
a m
ulti-
year
impr
ovem
ent
prog
ram
, cal
led
the
Fina
nce
& Ri
sk R
oad
Map
. Thi
s pr
ogra
m is
des
igne
d to
enh
ance
dat
a qu
ality
, man
age-
men
t and
con
trol
at t
he p
oint
of t
rans
actio
n or
igin
atio
n to
sim
plify
and
inte
grat
e th
e te
chno
logy
infr
astr
uc-
ture
acr
oss
Risk
, Fin
ance
and
Tre
asur
y, a
s w
ell a
s to
impl
emen
t a ro
bust
ope
ratin
g m
odel
des
igne
d to
en
sure
a m
ore
effici
ent a
nd e
ffect
ive
orga
niza
tion
with
si
gnifi
cant
ly lo
wer
def
ect r
ates
. In
orde
r to
faci
litat
e th
e su
cces
s of
this
pro
gram
, key
sen
ior-
leve
l hire
s ha
ve
been
mad
e, in
clud
ing
a Ch
ief F
inan
cial
Offi
cer
who
w
orks
for
both
Ris
k an
d Fi
nanc
e an
d w
ho a
lso
serv
es
as th
e pr
ogra
m’s
seni
or s
pons
or; a
Chi
ef In
form
atio
n O
ffice
r ac
ross
Ris
k an
d Fi
nanc
e; a
Chi
ef D
ata
Offi
cer
for
the
com
pany
; and
Chi
ef D
ata
Offi
cers
for
each
of
our
busi
ness
es a
nd fu
nctio
ns. T
his
effor
t is
reco
gniz
ed
and
supp
orte
d by
the
Ope
ratin
g Co
mm
ittee
as
a ke
y st
rate
gic
initi
ativ
e fo
r th
e co
mpa
ny.
CON
TRO
L FU
NCT
ION
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T47
Regu
lato
ry in
itia
tive
s
Firm
wid
e pr
ogra
ms
also
wer
e la
unch
ed to
add
ress
ke
y re
gula
tory
initi
ativ
es, m
ost n
otab
ly R
ecov
ery
and
Reso
lutio
n an
d Co
mpr
ehen
sive
Cap
ital A
naly
sis
and
Revi
ew. T
hrou
gh th
ese
prog
ram
s, w
e ha
ve m
ade
fund
a-m
enta
l enh
ance
men
ts to
our
cap
ital p
lann
ing
and
stre
ss
test
ing
fram
ewor
ks, a
s w
ell a
s le
gal e
ntity
and
cri
tical
op
erat
ions
repo
rtin
g. T
hese
impr
ovem
ents
incl
ude
adop
ting
prod
uct-
cent
ric
fore
cast
ing
met
hodo
logi
es,
build
ing
new
or
enha
nced
sta
tistic
al m
odel
s to
faci
litat
e m
ore
gran
ular
fore
cast
ing,
cen
tral
izin
g go
vern
ance
of
mac
roec
onom
ic v
aria
bles
, aut
omat
ing
and
prod
ucin
g tim
ely
lega
l ent
ity-r
elat
ed in
form
atio
n, a
nd a
chie
ving
re
solu
tion
and
reco
very
cap
abili
ties.
The
se p
rogr
ams
invo
lve
hund
reds
of r
esou
rces
and
spa
n th
e or
gani
zatio
n ac
ross
bus
ines
ses,
geo
grap
hies
and
lega
l ent
ities
. The
y in
volv
e po
licy
sett
ing;
gov
erna
nce;
ope
ratin
g m
odel
; and
en
d-to
-end
con
trol
des
ign
and
deve
lopm
ent,
mod
el a
nd
tech
nolo
gy d
evel
opm
ent,
and
docu
men
ted
proc
edur
es.
Impr
oved
con
trol
s
In a
dditi
on to
the
orga
niza
tiona
l cha
nges
, gov
erna
nce
com
mitt
ees
and
regu
lato
ry in
itiat
ives
des
crib
ed a
bove
, w
e ha
ve m
ade
a nu
mbe
r of
enh
ance
men
ts to
our
cor
e Fi
nanc
e co
ntro
l pro
gram
s in
rece
nt y
ears
. Am
ong
them
:
Oxle
y Co
mpl
ianc
e pr
ogra
m a
nd G
ener
al L
edge
r Re
conc
iliat
ion
and
Subs
tant
iatio
n pr
ogra
m. B
oth
are
corn
erst
ones
to e
nsur
ing
the
inte
grity
of o
ur
book
s an
d re
cord
s. F
or th
ese
prog
ram
s, s
copi
ng w
as
revi
ewed
, rev
ised
and
acc
eler
ated
; tes
ting
has
been
en
hanc
ed w
ith m
ore
gran
ular
mile
ston
es; t
rain
ing
has
been
upd
ated
; and
repo
rtin
g ha
s be
en e
nhan
ced
Man
agem
ent p
olic
y, F
inan
ce re
view
ed a
nd e
nhan
ced
its r
isk
and
cont
rol s
elf-a
sses
smen
ts, r
eval
idat
ing
the
func
tion’
s in
here
nt r
isks
, und
erta
king
det
aile
d pr
oces
s m
appi
ng, i
dent
ifyin
g an
d re
view
ing
the
desi
gn o
f key
fina
ncia
l con
trol
s, a
nd, u
ltim
atel
y,
test
ing
the
effec
tiven
ess
of th
ese
cont
rols
. Thi
s is
a
criti
cal o
ngoi
ng s
trat
egic
initi
ativ
e in
volv
ing
cont
in-
uous
effo
rts
to im
prov
e
Qua
lity
Assu
ranc
e pr
ogra
m, w
hich
initi
ally
focu
sed
on th
e ac
cura
cy o
f reg
ulat
ory
filin
gs, t
hen
broa
dene
d in
ord
er to
val
idat
e da
ta in
tegr
ity a
cros
s th
e fir
m a
nd
prov
ide
resu
lts to
the
func
tion’
s Ch
ief D
ata
Offi
cer
Repo
rtin
g tr
ansp
aren
cy
We
are
com
mitt
ed to
tim
ely,
tran
spar
ent a
nd a
ppro
-pr
iate
repo
rtin
g an
d di
sclo
sure
s in
ord
er to
furn
ish
exte
rnal
con
stitu
ents
with
app
ropr
iate
and
suffi
cien
t in
form
atio
n to
ass
ess
the
risk
s an
d pe
rfor
man
ce o
f th
e co
mpa
ny, a
s w
ell a
s to
com
ply
with
acc
ount
ing
and
regu
lato
ry re
quire
men
ts. T
he c
ompa
ny’s
CFO
an
d Fi
nanc
e m
anag
emen
t tea
m re
gula
rly
revi
ew a
nd
enha
nce
the
qual
ity o
f our
ext
erna
l dis
clos
ures
, par
tic-
ular
ly th
ose
in th
e qu
arte
rly
earn
ings
pre
sent
atio
n an
d th
e 10
-K a
nd 1
0-Q
repo
rts.
CON
TRO
L FU
NCT
ION
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
48 Com
plia
nce
The
com
pany
’s gl
obal
Com
plia
nce
depa
rtm
ent i
s a
core
co
mpo
nent
of t
he c
ompa
ny’s
cont
rol e
ffort
s.
Whi
le e
ach
line
of b
usin
ess
is a
ccou
ntab
le fo
r m
anag
ing
its c
ompl
ianc
e ri
sk, o
ur C
ompl
ianc
e te
ams
wor
k cl
osel
y w
ith th
e O
pera
ting
Com
mitt
ee a
nd s
enio
r m
anag
emen
t to
prov
ide
inde
pend
ent r
evie
w a
nd
over
sigh
t of o
ur li
nes
of b
usin
ess
oper
atio
ns, w
ith a
fo
cus
on c
ompl
ianc
e w
ith a
pplic
able
glo
bal,
regi
onal
an
d lo
cal l
aws
and
regu
latio
ns.
In p
artic
ular
, the
role
of C
ompl
ianc
e is
to id
entif
y,
mea
sure
, mon
itor,
repo
rt o
n an
d pr
ovid
e ov
ersi
ght
rega
rdin
g co
mpl
ianc
e ri
sks
aris
ing
from
bus
ines
s
oper
atio
ns a
nd p
rovi
de g
uida
nce
on h
ow th
e co
mpa
ny
can
miti
gate
thes
e ri
sks.
Org
aniz
atio
n an
d go
vern
ance
To m
eet i
ts re
spon
sibi
litie
s, C
ompl
ianc
e op
erat
es
inde
pend
ently
from
the
lines
of b
usin
ess.
The
firm
wid
e Ch
ief C
ompl
ianc
e O
ffice
r (C
CO) r
epor
ts to
the
com
pany
’s Ch
ief O
pera
ting
Offi
cer
and
lead
s th
e m
ore
than
3,0
00-
pers
on C
ompl
ianc
e de
part
men
t (ex
clud
ing
Tech
nolo
gy
and
Ope
ratio
ns e
mpl
oyee
s w
ho s
uppo
rt C
ompl
ianc
e).
The
firm
wid
e CC
O is
sup
port
ed b
y a
CCO
for
each
bu
sine
ss, a
s w
ell a
s re
gion
al C
COs
in th
e Eu
rope
, Mid
dle
East
and
Afr
ica,
Asi
a Pa
cific
and
Lat
in A
mer
ica
regi
ons.
Re
gion
al C
COs
have
aut
hori
ty a
cros
s lin
es o
f bus
ines
s in
th
eir
resp
ectiv
e re
gion
s ex
cept
in s
ituat
ions
whe
re th
is
stru
ctur
e co
nflic
ts w
ith lo
cal r
egul
ator
y ob
ligat
ions
.
Until
ear
ly 2
013,
Com
plia
nce
was
par
t of a
join
t Leg
al
& C
ompl
ianc
e gr
oup.
The
com
pany
sep
arat
ed th
e fu
nctio
ns to
pro
vide
eac
h gr
oup
with
ded
icat
ed le
ad-
ersh
ip, r
esou
rces
and
sup
port
. Thi
s m
ove
emph
asiz
ed
the
impo
rtan
ce a
nd s
tatu
re o
f Com
plia
nce,
as
wel
l as
the
com
pany
’s c
omm
itmen
t to
mai
ntai
ning
a c
ultu
re o
f co
mpl
ianc
e an
d co
ntro
l.
To e
xecu
te o
ur C
ompl
ianc
e pr
ogra
m, w
e m
ust h
ave
empl
oyee
s w
ith r
elev
ant f
unct
iona
l, bu
sine
ss a
nd
regu
lato
ry e
xper
tise.
We
have
take
n se
vera
l ste
ps to
ac
com
plis
h th
is, i
nclu
ding
add
ing
mor
e th
an 1
,200
Co
mpl
ianc
e pr
ofes
sion
als
duri
ng 2
012
and
2013
. We
expe
ct to
bri
ng o
n ab
out 4
70 a
dditi
onal
peo
ple
by th
e en
d of
201
4, a
t whi
ch ti
me
our
Com
plia
nce
head
coun
t w
ill b
e ap
prox
imat
ely
3,15
0, a
n in
crea
se o
f 117
% s
ince
th
e be
ginn
ing
of 2
012.
The
follo
win
g pa
ges
sum
mar
ize
key
actio
ns w
e ha
ve
take
n to
enh
ance
Com
plia
nce.
Glob
al C
ompl
ianc
e pr
ogra
m
In 2
012,
the
com
pany
est
ablis
hed
an e
nhan
ced
and
mor
e ce
ntra
lized
glo
bal C
ompl
ianc
e pr
ogra
m to
pro
vide
:
acro
ss b
usin
esse
s an
d re
gion
s
prot
ocol
s to
add
ress
regu
lato
ry g
uida
nce
acro
ss th
e co
re p
ract
ices
The
prog
ram
is d
esig
ned
arou
nd s
even
cor
e pr
actic
es
that
func
tion
toge
ther
as
an in
tegr
ated
ris
k m
anag
e-m
ent f
ram
ewor
k (e
.g.,
risk
ass
essm
ents
info
rm te
stin
g an
d tr
aini
ng p
lans
, and
regu
lato
ry m
anag
emen
t affe
cts
polic
ies
and
proc
edur
es).
This
fram
ewor
k al
low
s fo
r co
ntin
uous
enh
ance
men
ts in
eac
h cy
cle
of th
e pr
ogra
m
to a
ccom
mod
ate
busi
ness
and
regu
lato
ry c
hang
es. T
he
core
pra
ctic
es a
re:
CON
TRO
L FU
NCT
ION
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T49
1. G
over
nanc
e an
d ov
ersi
ght
Prov
idin
g in
depe
nden
t gov
erna
nce
and
over
sigh
t of
busi
ness
act
iviti
es is
one
of C
ompl
ianc
e’s
prim
ary
resp
on-
sibi
litie
s. A
s su
ch, w
e ha
ve e
nhan
ced
Com
plia
nce’
s in
de-
pend
ent o
vers
ight
in s
ever
al re
spec
ts, i
nclu
ding
thro
ugh:
busi
ness
and
regi
on u
sing
bus
ines
s ac
tiviti
es, r
isk
asse
ssm
ent r
esul
ts a
nd o
ther
dat
a to
hel
p pr
iori
tize
Com
plia
nce
activ
ities
and
to d
eplo
y re
sour
ces
whe
ther
the
lines
of b
usin
ess
and
regi
ons
have
effe
c-tiv
ely
impl
emen
ted
the
stan
dard
s an
d pr
otoc
ols
for
the
Com
plia
nce
prog
ram
of
Dire
ctor
s’ A
udit
Com
mitt
ee o
n Co
mpl
ianc
e pr
ogra
m d
evel
opm
ents
and
sig
nific
ant o
r em
ergi
ng
com
plia
nce
risk
s
cons
ider
atio
ns in
line
of b
usin
ess
and
regi
onal
N
ew B
usin
ess
Initi
ativ
e Ap
prov
al p
roce
ss a
nd p
ost-
impl
emen
tatio
n re
view
s
2. R
egul
ator
y m
anag
emen
t
The
com
pany
impl
emen
ts c
ontr
ols
to m
anag
e co
mpl
i-an
ce r
isks
bas
ed o
n re
leva
nt re
gula
tory
obl
igat
ions
. W
e co
ntin
ue to
mak
e im
prov
emen
ts in
our
abi
lity
to
eval
uate
dev
elop
men
ts re
gard
ing
thes
e ob
ligat
ions
and
ad
just
con
trol
s as
nec
essa
ry. W
e al
so h
ave
enha
nced
our
ap
proa
ch to
regu
lato
ry in
tera
ctio
ns, i
nclu
ding
exa
m-
inat
ions
, to
achi
eve
bett
er c
onsi
sten
cy in
thes
e in
tera
c-tio
ns. E
nhan
cem
ents
incl
ude:
busi
ness
es a
nd fu
nctio
ns
man
agem
ent t
hrou
gh th
e cr
eatio
n of
firm
wid
e pr
otoc
ols
inte
nded
to in
crea
se th
e co
nsis
tenc
y of
pr
epar
atio
n, c
oord
inat
ion
and
exec
utio
n of
com
pli-
ance
-foc
used
regu
lato
ry e
xam
s
3. P
olic
ies
and
proc
edur
es
The
polic
y m
anag
emen
t fra
mew
ork
is u
sed
by
Com
plia
nce
to d
esig
n, im
plem
ent a
nd m
aint
ain
polic
ies
and
proc
edur
es th
at s
uppo
rt c
ompl
ianc
e w
ith re
gula
-to
ry o
blig
atio
ns. T
he fr
amew
ork
has
been
enh
ance
d ov
er ti
me
and
used
to b
road
en th
e co
mpa
ny’s
polic
ies
and
proc
edur
es. F
or e
xam
ple,
the
mod
el n
ow in
clud
es
spec
ific
requ
irem
ents
for
gove
rnan
ce, f
orm
at a
nd te
ch-
nolo
gy, w
hich
dri
ve c
onsi
sten
cy a
nd in
crea
se c
ontr
ol
and
usab
ility
.
4. T
rain
ing
and
awar
enes
s
Trai
ning
on
and
awar
enes
s of
Com
plia
nce-
rela
ted
polic
ies
and
proc
edur
es re
info
rce
our
cultu
re o
f com
pli-
ance
and
hel
p im
plem
ent r
equi
red
cont
rols
. To
that
end
, w
e ha
ve:
incl
udin
g th
e de
velo
pmen
t of a
line
of b
usin
ess
Com
plia
nce
trai
ning
-nee
ds a
naly
sis
the
line
of b
usin
ess
and
regi
onal
Com
plia
nce
plan
s
stud
y tr
aini
ng fo
r Co
mpl
ianc
e pr
ofes
sion
als
incl
udin
g a
spea
ker
seri
es fo
cuse
d on
del
iver
ing
rele
vant
trai
ning
to e
mpl
oyee
s in
Ove
rsig
ht &
Co
ntro
l, Ri
sk, C
ompl
ianc
e an
d Le
gal
5. M
onit
orin
g an
d te
stin
g
Com
plia
nce
inde
pend
ently
mon
itors
and
test
s bu
sine
ss a
ctiv
ities
usi
ng a
ris
k-ba
sed
appr
oach
to
eval
uate
the
adeq
uacy
and
effe
ctiv
enes
s of
cri
tical
co
ntro
l pro
cess
es. T
he c
ompa
ny h
as s
tren
gthe
ned
this
ov
ersi
ght i
n se
vera
l way
s:
proc
edur
es a
nd in
augu
ral g
loba
l Com
plia
nce
mon
i-to
ring
pro
cedu
res
CON
TRO
L FU
NCT
ION
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
50
crite
ria
for
key
risk
s
-po
rate
root
cau
ses
of is
sues
and
laun
ched
glo
bal
Com
plia
nce
Test
ing
Fund
amen
tals
Wor
ksho
ps. T
he
wor
ksho
ps in
clud
e de
ep-d
ive
test
ing,
trai
ning
and
pr
actic
al a
pplic
atio
ns o
f the
cur
rent
mon
itori
ng a
nd
test
ing
stan
dard
s
6. Is
sue
man
agem
ent
Issu
e m
anag
emen
t is
a m
ulti-
step
pro
cess
that
incl
udes
id
entif
ying
issu
es, fi
ndin
g th
eir
sour
ce a
nd im
ple-
men
ting
solu
tions
to re
solv
e th
e is
sues
. Com
plia
nce
has
enha
nced
its
issu
e m
anag
emen
t pra
ctic
es in
sev
eral
re
spec
ts:
prov
ide
over
sigh
t of o
pera
tiona
l ris
ks a
nd th
e co
ntro
l en
viro
nmen
t for
the
Com
plia
nce
depa
rtm
ent.
This
co
mm
ittee
repo
rts
and
esca
late
s is
sues
to th
e Fi
rmw
ide
Cont
rol C
omm
ittee
issu
es
com
pens
atin
g co
ntro
ls o
f new
ly id
entifi
ed r
isk
issu
es
until
long
er-t
erm
act
ion
plan
s ar
e co
mpl
eted
7. C
ompl
ianc
e ri
sk a
sses
smen
t and
rep
orti
ng
Com
plia
nce
risk
ass
essm
ents
iden
tify,
mea
sure
, as
sess
and
rep
ort c
ompl
ianc
e ri
sks
usin
g a
cons
iste
nt
appr
oach
and
met
hodo
logy
to e
nabl
e fir
mw
ide
aggr
e-ga
tion
of c
ompl
ianc
e ri
sks.
We
anal
yze
com
plia
nce
risk
bas
ed u
pon
cate
gory
and
then
use
the
asse
ssm
ent
resu
lts to
pri
oriti
ze C
ompl
ianc
e ac
tiviti
es, i
nclu
ding
ri
sk-b
ased
mon
itori
ng a
nd te
stin
g, a
s w
ell a
s tr
aini
ng
plan
s. T
he fo
llow
ing
impr
ovem
ents
hav
e he
lped
st
reng
then
thes
e pr
actic
es:
prog
ram
that
incl
udes
a s
urve
y to
ol th
at a
sses
ses
com
plia
nce
risk
to e
nhan
ce c
onsi
sten
cy, d
ocum
enta
-tio
n an
d co
mpr
ehen
sive
ness
refle
ct (i
n re
sidu
al r
isk
ratin
gs) t
he im
pact
of i
neffe
c-tiv
e co
ntro
ls, r
egar
dles
s of
the
ratin
g of
the
inhe
rent
ri
sk a
t iss
ue
laun
deri
ng r
isk
asse
ssm
ent t
o in
clud
e m
ore
robu
st
met
hodo
logi
es to
qua
ntify
ris
k ex
posu
re a
t var
ious
le
vels
of t
he c
ompa
ny
Tech
nolo
gy
Effec
tive
use
of te
chno
logy
is e
ssen
tial t
o ev
ery
com
pone
nt o
f the
Com
plia
nce
prog
ram
. We
have
bo
lste
red
our
Com
plia
nce
tech
nolo
gy a
nd m
anag
emen
t re
port
ing
thro
ugh
cont
inue
d in
vest
men
ts in
sys
tem
s,
oper
atin
g pl
atfo
rms
and
peop
le, i
nclu
ding
by:
Com
plia
nce
tech
nolo
gy a
nd o
pera
tions
pla
tform
s an
d pe
rson
nel.
In 2
014,
we
will
spe
nd o
ver
$450
m
illio
n in
thes
e ar
eas
-tio
ns e
mpl
oyee
s su
ppor
ting
Com
plia
nce
duri
ng 2
012
and
2013
. In
2014
, we
plan
on
addi
ng a
n ad
ditio
nal
720
empl
oyee
s in
thes
e ar
eas
CON
TRO
L FU
NCT
ION
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T51
Glob
al F
inan
cial
Cri
mes
Com
plia
nce
prog
ram
The
Glob
al F
inan
cial
Cri
mes
Com
plia
nce
(GFC
C) g
roup
, cr
eate
d in
201
2, is
a s
ub-f
unct
ion
of C
ompl
ianc
e fo
cuse
d on
com
plia
nce
with
the
law
s an
d re
gula
tions
gov
erni
ng
the
Bank
Sec
recy
Act
(BSA
) and
ant
i-mon
ey la
unde
ring
la
ws
(AM
L, a
nd, c
olle
ctiv
ely
with
BSA
, BSA
/AM
L),
terr
oris
t fina
ncin
g, e
cono
mic
san
ctio
ns a
nd a
nti-c
orru
p-tio
n. T
he g
roup
impl
emen
ts a
nd p
rovi
des
over
sigh
t of a
ll as
pect
s of
the
com
pany
’s GF
CC p
rogr
am, i
nclu
ding
the
BSA/
AML
and
Know
You
r Cu
stom
er p
rogr
ams.
We
cont
inue
to in
vest
in h
irin
g th
e ri
ght p
eopl
e,
impr
ovin
g ou
r te
chno
logy
cap
abili
ties
and
enha
ncin
g GF
CC p
rogr
ams
glob
ally
. The
pag
es th
at fo
llow
des
crib
e ho
w s
ome
of th
ese
reso
urce
s ha
ve b
een
allo
cate
d.
Boa
rd a
ctio
ns
His
tori
cally
, the
Aud
it Co
mm
ittee
has
revi
ewed
com
pli-
ance
and
regu
lato
ry m
atte
rs a
ffect
ing
the
com
pany
and
GF
CC, i
nclu
ding
the
BSA/
AML
prog
ram
and
AM
L po
licy.
In
ear
ly 2
012,
the
com
pany
est
ablis
hed
a Bo
ard-
leve
l AM
L En
hanc
emen
t Com
mitt
ee to
ove
rsee
the
com
pany
’s eff
orts
to im
prov
e its
BSA
/AM
L pr
ogra
m.
Follo
win
g th
e en
try
into
regu
lato
ry o
rder
s re
gard
ing
BSA/
AML
in 2
013,
the
Boar
d es
tabl
ishe
d a
BSA/
AML
Com
plia
nce
Com
mitt
ee c
onsi
stin
g of
thre
e in
depe
nden
t di
rect
ors.
Thi
s ne
w c
omm
ittee
ove
rsee
s fir
mw
ide
GFCC
m
atte
rs a
nd re
late
d re
spon
sibi
litie
s, a
s w
ell a
s th
e fo
llow
ing
addi
tiona
l res
pons
ibili
ties:
man
agem
ent a
nd m
itiga
tion
of id
entifi
ed B
SA/A
ML
com
plia
nce
risk
s
eff
ectiv
enes
s
with
, the
regu
lato
ry o
rder
s of
the
Fede
ral R
eser
ve
and
the
Offi
ce o
f the
Com
ptro
ller
of th
e Cu
rren
cy
rega
rdin
g BS
A/AM
L
Man
agem
ent a
ctio
ns
Man
agem
ent a
nd th
e GF
CC g
roup
are
wor
king
to
enha
nce
our
BSA/
AML
prog
ram
by
incr
easi
ng o
ur a
bilit
y to
man
age
rela
ted
risk
, im
prov
ing
cust
omer
onb
oard
ing
and
due
dilig
ence
, and
hei
ghte
ning
our
sus
pici
ous
tran
s-ac
tion
mon
itori
ng. A
key
par
t of t
hese
effo
rts
has
been
th
e hi
ring
and
trai
ning
of t
alen
t. By
the
end
of 2
014,
w
e w
ill h
ave
hire
d m
ore
than
9,5
00 fu
ll-tim
e eq
uiva
-le
nt e
mpl
oyee
s ac
ross
mul
tiple
dis
cipl
ines
focu
sed
on
finan
cial
cri
me-
rela
ted
mat
ters
— m
ore
than
a 3
00%
in
crea
se s
ince
201
2. O
ur le
ader
ship
team
in th
is a
rea
repr
esen
ts a
wid
e ra
nge
of v
arie
d pr
ofes
sion
al b
ack-
grou
nds
from
the
publ
ic a
nd p
riva
te s
ecto
rs, i
nclu
ding
fe
dera
l law
enf
orce
men
t offi
cial
s, fe
dera
l reg
ulat
ors,
at
torn
eys
and
finan
cial
ser
vice
s-re
late
d pr
ofes
sion
als.
AM
L, s
anct
ions
and
ant
i-co
rrup
tion
ris
k as
sess
men
t
We
cond
uct A
ML,
san
ctio
ns a
nd a
nti-c
orru
ptio
n ri
sk
asse
ssm
ents
. The
201
3 as
sess
men
ts u
sed
an e
nhan
ced
met
hodo
logy
to q
uant
ify e
ach
busi
ness
’ pot
entia
l ex
posu
re to
mon
ey la
unde
ring
, ter
rori
st fi
nanc
ing,
sa
nctio
ns a
nd a
nti-c
orru
ptio
n ri
sk a
nd to
eva
luat
e th
e qu
ality
of t
he c
urre
nt c
ontr
ols
in p
lace
to m
itiga
te
thos
e ri
sks.
Thi
s an
alys
is u
tiliz
ed c
ount
ry-le
vel d
ata
and
risk
ass
essm
ent r
epor
ts fo
r th
e lin
es o
f bus
ines
s an
d su
b-lin
es o
f bus
ines
s.
Ant
i-co
rrup
tion
JPM
orga
n Ch
ase
is s
ubje
ct to
ant
i-cor
rupt
ion
law
s (e
.g.,
the
Fore
ign
Corr
upt P
ract
ices
Act
) tha
t mak
e it
illeg
al fo
r us
to b
ribe
fore
ign
offici
als
to o
btai
n or
reta
in b
usin
ess.
O
ver
the
last
sev
eral
yea
rs, w
e ha
ve u
nder
take
n eff
orts
to
str
engt
hen
our
effor
ts to
iden
tify
and
miti
gate
co
rrup
tion
risk
s, in
clud
ing:
of b
usin
ess,
incl
udin
g en
hanc
ing
over
sigh
t ove
r gi
fts
and
ente
rtai
nmen
t and
thir
d-pa
rty
vend
ors
spor
ts a
nd e
nter
tain
men
t
CON
TRO
L FU
NCT
ION
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
52
dilig
ence
on
thir
d-pa
rty
vend
ors
in tr
ansa
ctio
ns
Cust
omer
due
dili
genc
e an
d cl
ient
ris
k sc
orin
g
We
have
impl
emen
ted
a ri
sk-b
ased
app
roac
h to
co
llect
ing,
doc
umen
ting
and
mai
ntai
ning
cus
tom
er,
prod
uct a
nd/o
r tr
ansa
ctio
nal d
ue d
ilige
nce
info
rmat
ion.
Th
e co
mpa
ny m
aint
ains
its
due
dilig
ence
info
rmat
ion
thro
ugh
ongo
ing
cont
act w
ith c
lient
s an
d pe
riod
ic
revi
ews
of c
lient
s an
d ac
coun
ts. S
ome
of o
ur im
prov
e-m
ents
incl
ude:
docu
men
ts, i
nclu
ding
ris
k to
lera
nce
guid
elin
es,
com
plia
nce
revi
ew g
uide
lines
, per
iodi
c re
view
and
ac
coun
t act
ivity
revi
ew m
etho
dolo
gy, h
olis
tic v
iew
/ex
tend
ed re
latio
nshi
p re
quire
men
ts c
rite
ria,
Kno
w
Your
Cus
tom
er a
ppro
val g
uide
lines
and
hig
h-ri
sk
trig
ger
rule
s by
cus
tom
er ty
pe
crite
ria
that
incl
ude,
as
appl
icab
le, a
cus
tom
er’s
owne
rs, p
rinc
ipal
s, s
igne
rs, s
ubsi
diar
ies,
affi
liate
s,
and
part
ies
that
man
age
and/
or c
ontr
ol th
e ac
coun
t or
clie
nt
and
proc
edur
es b
y cu
stom
er ty
pe to
dri
ve fi
rmw
ide
cons
iste
ncy
will
dri
ve th
e ne
ed fo
r en
hanc
ed d
ue d
ilige
nce,
mor
e fr
eque
nt p
erio
dic
revi
ews,
gre
ater
num
ber
of s
enio
r ap
prov
als
and
in-d
epth
tran
sact
ion
mon
itori
ng
Tran
sact
ion
mon
itor
ing
As p
art o
f our
com
plia
nce
effor
ts, w
e re
view
tran
sac-
tions
for
pote
ntia
l sus
pici
ous
activ
ity a
nd re
port
thes
e ac
tiviti
es to
the
gove
rnm
ent.
We
have
und
erta
ken
sign
if-ic
ant e
ffort
s to
enh
ance
our
abi
lity
to m
onito
r tr
ansa
c-tio
ns fo
r po
tent
ial s
uspi
ciou
s ac
tivity
, inc
ludi
ng:
desi
gned
to e
nsur
e tim
ely
and
appr
opri
ate
revi
ew
and
disp
ositi
on o
f ale
rts
requ
irem
ents
for A
ML
inve
stig
atio
ns in
the
Euro
pe,
Mid
dle
East
and
Afr
ica
and
Asia
Pac
ific
regi
ons
to
stan
dard
ize
and
auto
mat
e th
e pr
oces
s w
orld
wid
e an
d pr
ovid
e a
glob
al fe
edba
ck lo
op in
to in
vest
igat
ions
to m
aint
ain
data
inte
grity
, glo
bally
con
sist
ent
plat
form
s, c
usto
mer
sur
veill
ance
sce
nari
os a
nd a
co
ntin
uous
impr
ovem
ent p
roce
ss
qual
ity c
ontr
ol p
roce
sses
to re
view
and
inve
stig
ate
susp
icio
us a
ctiv
ity
Our
tran
sact
ion
mon
itori
ng e
nhan
cem
ents
cov
er b
oth
dom
estic
and
cro
ss-b
orde
r tr
ansa
ctio
ns. W
e ha
ve
depl
oyed
team
s to
focu
s on
num
erou
s ty
pes
of a
ctiv
i-tie
s, in
clud
ing
corr
espo
nden
t ban
king
, hum
an tr
affick
ing
and
terr
oris
t fina
ncin
g.
CON
TRO
L FU
NCT
ION
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T53
Sanc
tion
s an
d cl
ient
scr
eeni
ng p
rogr
ams
We
also
scr
een
cust
omer
s an
d tr
ansa
ctio
ns (i
nvol
ving
in
divi
dual
s an
d en
titie
s th
at a
re s
ubje
ct to
san
ctio
ns a
nd
emba
rgoe
s) in
volv
ed in
neg
ativ
e m
edia
refe
renc
es o
r who
ar
e po
litic
ally
exp
osed
per
sons
. We
have
take
n se
vera
l ac
tions
to e
nhan
ce o
ur s
cree
ning
cap
abili
ties,
incl
udin
g:
scre
enin
g
to a
new
cen
tral
scr
eeni
ng u
tility
by in
crea
sing
sta
ff w
ithin
our
cen
tral
scr
eeni
ng u
tility
an
d fo
r in
tern
atio
nal s
anct
ions
com
plia
nce
Offi
ce o
f For
eign
Ass
ets
Cont
rol a
nd s
anct
ions
co
mpl
ianc
e
scre
enin
g pl
atfo
rms
to a
new
scr
eeni
ng p
latfo
rm th
at
will
be
part
of a
cen
tral
ized
list
repo
sito
ry
Susp
icio
us A
ctiv
ity
Rep
orts
A Su
spic
ious
Act
ivity
Rep
ort (
SAR)
gen
eral
ly is
a r
epor
t th
at a
fina
ncia
l ins
titut
ion
send
s to
a r
egul
ator
(e.g
., in
th
e U
nite
d St
ates
, the
Fin
anci
al C
rim
es E
nfor
cem
ent
Net
wor
k) r
egar
ding
act
iviti
es o
r tr
ansa
ctio
ns th
at a
re
susp
icio
us. T
his
help
s go
vern
men
t age
ncie
s id
entif
y in
divi
dual
s or
org
aniz
atio
ns th
at a
re in
volv
ed in
cr
imin
al a
ctiv
ity, i
nclu
ding
frau
d, te
rror
ist fi
nanc
ing
and
mon
ey la
unde
ring
.
We
cont
inue
to re
view
our
SAR
pra
ctic
es, b
oth
in th
e Un
ited
Stat
es a
nd g
loba
lly, t
o id
entif
y ar
eas
of im
prov
e-m
ent a
nd to
str
engt
hen
our
prac
tices
in o
rder
to re
port
su
spic
ious
act
ivity
and
to e
scal
ate
conc
erns
mor
e qu
ickl
y in
tern
ally
and
with
the
appr
opri
ate
regu
lato
rs.
For
exam
ple,
we
are:
and
Fina
ncia
l Int
ellig
ence
uni
ts
qual
ity o
f our
iden
tifica
tion,
revi
ew a
nd re
port
ing
of
pote
ntia
lly s
uspi
ciou
s ac
tivity
to p
erm
it th
e ex
chan
ge o
f SAR
-rel
ated
info
rmat
ion
from
oth
er c
ount
ries
to th
e Un
ited
Stat
es w
here
pe
rmitt
ed b
y lo
cal r
egul
atio
n
CON
TRO
L FU
NCT
ION
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
54 Case
stu
dy: F
orei
gn c
orre
spon
dent
ban
king
Our
fore
ign
corr
espo
nden
t ban
king
act
iviti
es in
volv
e se
ndin
g an
d/or
rece
ivin
g U.
S. d
olla
r-de
nom
inat
ed
paym
ents
or
hand
ling
othe
r U.
S.-b
ased
fina
ncia
l tra
ns-
actio
ns o
n be
half
of a
non
-U.S
. fina
ncia
l ins
titut
ion.
Th
ese
activ
ities
hav
e co
me
unde
r si
gnifi
cant
scr
utin
y by
re
gula
tors
, ind
ustr
y-w
ide,
bec
ause
of c
erta
in in
here
nt
risk
s in
the
busi
ness
.
As a
resu
lt, w
e re
view
ed o
ur c
ontr
ols
arou
nd th
is
busi
ness
, inc
ludi
ng o
ur in
tern
al p
olic
ies,
pro
cess
es a
nd
tech
nolo
gy, t
o un
ders
tand
whe
re w
e ne
ed to
impr
ove.
W
e re
view
ed th
e te
chno
logy
we
use
to m
onito
r tr
ans-
actio
ns a
nd th
e pr
oces
ses
for
perf
orm
ing
due
dilig
ence
on
our
clie
nts.
We
also
rev
iew
ed o
ur r
isk
tole
ranc
e ac
ross
sel
ecte
d co
untr
ies,
reg
ions
and
pro
duct
s fo
r ou
r co
rres
pond
ent b
anki
ng b
usin
ess.
Thi
s an
alys
is le
d us
to
conc
lude
that
we
need
ed to
upg
rade
our
con
trol
env
i-ro
nmen
t and
sys
tem
s an
d to
ded
icat
e m
ore
reso
urce
s to
KYC
, tra
nsac
tion
mon
itori
ng a
nd e
scal
atio
n in
ord
er
to c
ontin
ue to
ser
ve o
ur c
lient
s w
hile
man
agin
g ou
r ri
sk p
rofil
e.
One
of t
he c
onse
quen
ces
of o
ur re
view
was
the
deci
sion
to
exi
t man
y re
latio
nshi
ps w
ith fo
reig
n co
rres
pond
ent
bank
s, in
som
e ca
ses,
unt
il ou
r co
ntro
ls a
re b
ette
r ab
le
to m
anag
e th
ese
rela
tions
hips
. The
se d
ecis
ions
wer
e dr
iven
by
two
cons
ider
atio
ns:
1.
Risk
-rel
ated
con
cern
s
2.
Busi
ness
sim
plifi
catio
n, w
hich
allo
ws
us to
str
eam
-lin
e ou
r po
rtfo
lio a
nd fo
cus
due
dilig
ence
on
less
ri
sky
clie
nts
Prio
r to
exi
ting
a cl
ient
rel
atio
nshi
p, w
e w
ork
to h
elp
the
clie
nt fi
nd a
rep
lace
men
t U.S
. dol
lar
prov
ider
, if
poss
ible
; dis
cuss
pot
entia
l mar
ket r
isks
with
the
rele
vant
reg
ulat
ors;
and
ens
ure
the
deci
sion
is c
omm
u-ni
cate
d in
a c
oord
inat
ed a
nd c
onsi
sten
t way
acr
oss
all
part
s of
the
com
pany
.
We
rem
ain
com
mitt
ed to
the
fore
ign
corr
espo
nden
t ba
nkin
g bu
sine
ss. F
or th
ose
clie
nts
with
who
m w
e co
ntin
ue to
wor
k, w
e ar
e co
nduc
ting
enha
nced
due
di
ligen
ce a
nd re
view
with
eac
h on
e th
e ty
pes
of a
ctiv
ities
w
e w
ill c
ontin
ue to
sup
port
.
In o
rder
to im
plem
ent t
hese
ste
ps, w
e:
Offi
ce to
coo
rdin
ate
fore
ign
corr
espo
nden
t ban
king
de
-ris
king
act
iviti
es
to s
uppo
rt th
e fo
reig
n co
rres
pond
ent b
anki
ng
de-r
iski
ng e
ffort
thro
ugh
cros
s-lin
e of
bus
ines
s re
view
s an
d co
mm
unic
atio
ns o
f clie
nt r
isk
and
si
mpl
ifica
tion
deci
sion
s
Alon
g w
ith th
e re
latio
nshi
p ex
its, w
e ha
ve ta
ken
seve
ral
step
s to
impr
ove
our c
ontr
ols
for f
orei
gn c
orre
spon
dent
ba
nkin
g ac
tiviti
es, i
nclu
ding
:
mon
itor U
.S. d
olla
r-de
nom
inat
ed c
orre
spon
dent
ba
nkin
g tr
ansa
ctio
ns o
f for
eign
cor
resp
onde
nt b
anks
. Th
is in
clud
ed im
plem
entin
g 10
new
tran
sact
ion
mon
i-to
ring
rule
s to
trac
k m
illio
ns o
f tra
nsac
tions
eac
h da
y
both
Com
plia
nce
and
busi
ness
exe
cutiv
es, t
o re
view
ou
r cl
ient
por
tfolio
list
s an
d as
sess
and
man
age
any
risk
s pr
esen
ted
by p
artic
ular
clie
nts
Com
mitt
ee to
gov
ern
polic
ies
and
appr
ove
new
bu
sine
ss o
ppor
tuni
ties
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T5454
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
TCO
NTR
OL
FUN
CTIO
NS
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T55
Lega
l
Lega
l ser
ves
a va
riet
y of
func
tions
, man
y of
whi
ch
are
cont
rol r
elat
ed. O
ur la
wye
rs p
rovi
de le
gal a
dvic
e to
our
Boa
rd, o
ur li
nes
of b
usin
ess
and
our c
orpo
rate
fu
nctio
ns a
nd a
ssis
t Ove
rsig
ht &
Con
trol
, Ris
k, F
inan
ce,
Com
plia
nce
and
Inte
rnal
Aud
it in
thei
r effo
rts
to e
nsur
e co
mpl
ianc
e w
ith a
ll ap
plic
able
law
s an
d re
gula
tions
and
ou
r cor
pora
te s
tand
ards
for d
oing
bus
ines
s. L
egal
als
o w
orks
to p
rote
ct th
e re
puta
tion
of th
e co
mpa
ny b
eyon
d an
y pa
rtic
ular
lega
l req
uire
men
ts. F
inal
ly, o
ur la
wye
rs
perf
orm
a s
igni
fican
t def
ense
and
adv
ocac
y ro
le, w
orki
ng
with
out
side
cou
nsel
to a
sses
s an
d, a
s ap
prop
riate
, de
fend
the
com
pany
aga
inst
cla
ims
and
pote
ntia
l cla
ims
and,
whe
n ne
eded
, to
purs
ue c
laim
s ag
ains
t oth
ers
also
.
In e
ach
aspe
ct o
f its
role
, Leg
al h
as o
ne c
lient
: the
co
mpa
ny. I
n th
e w
ake
of th
e fin
anci
al c
risis
, the
num
ber
and
com
plex
ity o
f reg
ulat
ory
requ
irem
ents
affe
ctin
g th
e co
mpa
ny h
ave
incr
ease
d dr
amat
ical
ly; t
heir
enfo
rcem
ent
has
beco
me
stric
ter;
the
num
ber o
f int
erna
tiona
l, fe
dera
l, st
ate
and
loca
l age
ncie
s en
forc
ing
them
has
incr
ease
d;
and
the
pena
lties
for v
iola
tions
hav
e ris
en s
ubst
antia
lly.
Thus
, mak
ing
the
com
pany
fully
aw
are
of it
s le
gal o
blig
a-tio
ns h
as b
ecom
e m
ore
impo
rtan
t tha
n ev
er.
Org
aniz
atio
n an
d go
vern
ance
The
com
pany
’s G
ener
al C
ouns
el r
epor
ts to
the
CEO
and
is
a m
embe
r of
the
Ope
ratin
g Co
mm
ittee
, the
Fir
mw
ide
Risk
Com
mitt
ee a
nd th
e Fi
rmw
ide
Cont
rol C
omm
ittee
. H
is le
ader
ship
team
incl
udes
a G
ener
al C
ouns
el fo
r ea
ch li
ne o
f bus
ines
s, th
e he
ad o
f the
Liti
gatio
n,
Corp
orat
e &
Reg
ulat
ory
and
Glob
al F
inan
cial
Cri
mes
Co
mpl
ianc
e fu
nctio
ns, a
s w
ell a
s a
Chie
f Ope
ratin
g O
ffice
r an
d th
e co
mpa
ny’s
Cor
pora
te S
ecre
tary
. Eac
h re
gion
(e.g
., La
tin A
mer
ica,
Asi
a Pa
cific
) has
a G
ener
al
Coun
sel w
ho is
res
pons
ible
for
man
agin
g le
gal r
isk
acro
ss a
ll lin
es o
f bus
ines
s an
d fu
nctio
ns in
the
regi
on.
We
have
incr
ease
d st
affing
in a
n eff
ort t
o en
sure
we
have
eno
ugh
qual
ity la
wye
rs a
dvis
ing
our
busi
ness
es
so th
at, o
ver
time,
we
may
ach
ieve
our
goa
l of r
educ
ing
the
inci
denc
e of
reg
ulat
ory
and
litig
atio
n m
atte
rs. T
he
incr
ease
d st
affing
als
o pr
ovid
es r
esou
rces
to d
efen
d th
e co
mpa
ny a
nd to
red
uce
the
cost
that
com
es w
ith
use
of o
utsi
de c
ouns
el.
The
size
of L
egal
has
gro
wn
from
aro
und
850
law
yers
in
201
2 to
mor
e th
an 1
,000
in 2
013,
with
a p
roje
ctio
n of
ap
prox
imat
ely
1,20
0 at
the
end
of 2
014.
Incl
udin
g pa
ra-
lega
ls a
nd o
ther
sup
port
sta
ff, th
e to
tal s
taff
size
by
the
end
of 2
014
is e
xpec
ted
to b
e ap
prox
imat
ely
1,950
.
Tech
nolo
gy a
nd tr
aini
ng
Lega
l is
inve
stin
g in
tech
nolo
gy a
nd tr
aini
ng, w
ith a
fo
cus
on g
ivin
g ou
r pe
ople
the
tool
s to
do
thei
r jo
b
wel
l. In
vest
men
t in
tech
nolo
gy fo
r Le
gal h
as in
crea
sed
m
ore
than
five
fold
sin
ce 2
012.
Tec
hnol
ogy
and
trai
ning
in
itiat
ives
incl
ude:
syst
em to
sto
re le
gal w
orki
ng p
aper
s ce
ntra
lly, w
ith
the
abili
ty to
tie
docu
men
ts to
lega
l mat
ters
and
sh
are
and
colla
bora
te o
n do
cum
ents
acr
oss
team
s
on o
ur in
telle
ctua
l pro
pert
y an
d gl
obal
regu
latio
ns
on d
ata
priv
acy
and
secu
rity
to o
ffer
trai
ning
to e
mpl
oyee
s w
orld
wid
e so
they
re
mai
n co
nver
sant
with
exi
stin
g an
d ne
w r
egul
a-to
ry o
blig
atio
ns
CON
TRO
L FU
NCT
ION
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
56 Lega
l pro
cess
es
A ke
y re
spon
sibi
lity
of o
ur c
ompa
ny’s
law
yers
is to
co
nduc
t cer
tain
lega
l pro
cess
es, s
uch
as h
andl
ing
of
lega
l pap
ers
serv
ed, s
ubpo
ena
com
plia
nce,
lega
l ent
ity
trac
king
and
regu
lato
ry re
port
ing,
and
est
imat
ion
of
lega
l res
erve
s. W
e ar
e si
gnifi
cant
ly in
crea
sing
reso
urce
s de
vote
d to
thes
e fu
nctio
ns. T
his
has
mea
nt b
ring
ing
in
proc
ess
expe
rts
and
build
ing
team
s to
impl
emen
t new
st
ruct
ures
for
gett
ing
this
wor
k do
ne.
One
of o
ur m
ore
sign
ifica
nt o
pera
tiona
l iss
ues
has
been
th
e ex
ecut
ion
of s
wor
n do
cum
ents
use
d in
litig
atio
n pr
ocee
ding
s, p
artic
ular
ly in
our
con
sum
er b
usin
ess
colle
ctio
n eff
orts
. In
sim
ples
t ter
ms,
a s
wor
n do
cum
ent i
s w
ritte
n te
stim
ony.
In o
ur c
ase,
it w
ould
be
a st
atem
ent b
y a
com
pany
repr
esen
tativ
e un
der o
ath,
whi
ch is
sub
mitt
ed
to a
cou
rt, g
over
nmen
tal a
genc
y or
sel
f-reg
ulat
ory
agen
cy. W
e ex
ecut
e ar
ound
90,
000
swor
n do
cum
ents
m
onth
ly a
cros
s al
l lin
es o
f bus
ines
s an
d co
rpor
ate
func
tions
. We
have
mad
e a
num
ber o
f enh
ance
men
ts to
im
prov
e sw
orn
docu
men
t exe
cutio
n, in
clud
ing:
prop
er s
uper
visi
on o
f sw
orn
docu
men
ts a
ctiv
ities
at
the
com
pany
cont
rols
and
trai
ning
to s
uppo
rt th
e pr
oper
exe
cutio
n of
sw
orn
docu
men
ts
solu
tion
that
will
pro
vide
sev
eral
key
func
tions
, in
clud
ing
trac
king
, inv
ento
ry a
nd q
ualit
y as
sura
nce
Lega
l pri
orit
ies
Lega
l has
est
ablis
hed
a se
ries
of p
rior
ities
that
re
pres
ent t
he m
anne
r in
whi
ch th
e Le
gal f
unct
ion
seek
s to
sup
port
the
com
pany
’s eff
orts
to e
nsur
e th
at th
e bu
sine
ss it
doe
s is
in c
ompl
ianc
e w
ith a
ll ap
plic
able
law
s an
d re
gula
tions
and
mee
ts o
ur c
orpo
rate
sta
ndar
ds fo
r do
ing
busi
ness
. The
y in
clud
e:
Exec
utin
g. It
is im
port
ant t
o dr
ive
issu
es to
com
ple-
tion
and
to d
o so
with
a s
ense
of u
rgen
cy. T
his
incl
udes
ask
ing
for
help
if n
eede
d. It
als
o m
eans
not
as
sum
ing
that
som
eone
els
e is
han
dlin
g a
prob
lem
Serv
ing
the
clie
nt. S
ervi
ng th
e cl
ient
mea
ns s
afe-
guar
ding
the
com
pany
’s re
puta
tion.
Tha
t req
uire
s se
rvin
g as
a tr
uste
d ad
viso
r and
kno
win
g w
hen
to s
ay
“no.
” In
all
circ
umst
ance
s, it
requ
ires
care
ful a
naly
sis,
cl
ear-
head
ed th
inki
ng a
nd ro
bust
com
mun
icat
ion
—
and,
of c
ours
e, d
edic
atio
n an
d pr
ofes
sion
alis
m
Mak
ing
sure
we
don’
t rep
eat o
ur m
ista
kes.
We
mus
t le
arn
and
teac
h le
sson
s th
at a
re e
mbe
dded
in e
xam
-in
atio
ns, r
egul
ator
y or
ders
and
set
tlem
ents
Colla
bora
ting
. Our
law
yers
nee
d to
col
labo
rate
with
in
the
func
tion,
am
ong
the
cont
rol f
unct
ions
and
acr
oss
the
lines
of b
usin
ess
Esca
latin
g. E
scal
atin
g a
prob
lem
not
onl
y ad
ds a
se
cond
per
spec
tive
but o
ften
a b
road
er p
ersp
ec-
tive.
It is
a c
ore
oblig
atio
n of
any
law
yer
at th
e co
mpa
ny to
esc
alat
e pr
oble
ms
and
not h
andl
e si
gnifi
cant
pro
blem
s al
one.
Get
ting
the
righ
t peo
ple
invo
lved
is c
ruci
al
Enha
ncin
g di
alog
ue w
ith
our
regu
lato
rs. O
ur c
omm
u-ni
catio
ns w
ith re
gula
tors
mus
t be
timel
y an
d ac
cura
te. T
hat m
eans
ack
now
ledg
ing
whe
n on
e do
esn’
t kno
w th
e fa
cts
and
follo
win
g up
qui
ckly
whe
n th
ose
fact
s ar
e es
tabl
ishe
d. W
hile
par
t of a
law
yer’s
jo
b is
to a
dvoc
ate,
he
or s
he m
ust d
o so
hon
estly
and
re
spec
tful
ly a
nd w
ithou
t sac
rific
ing
cred
ibili
ty
CON
TRO
L FU
NCT
ION
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
ON
TRO
L EN
VIR
ON
MEN
T57
INTE
RN
AL
AU
DIT
The
Inte
rnal
Aud
it gr
oup
prov
ides
the
Boar
d of
D
irec
tors
’ Aud
it Co
mm
ittee
, sen
ior
man
agem
ent a
nd
our
regu
lato
rs w
ith a
n in
depe
nden
t ass
essm
ent o
f the
co
mpa
ny’s
abi
lity
to m
anag
e an
d co
ntro
l ris
k ba
sed
on a
n ev
alua
tion
of th
e co
mpa
ny’s
inte
rnal
con
trol
st
ruct
ure
and
com
plia
nce
with
app
licab
le la
ws
and
regu
latio
ns. A
t its
cor
e, th
e gr
oup
help
s th
e co
mpa
ny
acco
mpl
ish
its o
bjec
tives
by
brin
ging
a s
yste
mat
ic,
disc
iplin
ed a
ppro
ach
to e
valu
ate
risk
man
agem
ent
and
cont
rol a
nd g
over
nanc
e pr
oces
ses
and,
ther
eby,
co
ntri
bute
to th
eir
impr
ovem
ent.
Inte
rnal
Aud
it is
an
inde
pend
ent f
unct
ion
with
in th
e co
mpa
ny a
nd is
led
by th
e co
mpa
ny’s
Gene
ral A
udito
r. In
depe
nden
ce is
fund
amen
tal t
o th
e au
dit p
roce
ss a
nd
esse
ntia
l to
its e
ffect
iven
ess.
Inde
pend
ence
is a
chie
ved
thro
ugh
the
orga
niza
tiona
l str
uctu
re —
the
Gene
ral
Audi
tor
func
tiona
lly re
port
s di
rect
ly to
the
Boar
d of
Di
rect
ors’
Aud
it Co
mm
ittee
and
adm
inis
trat
ivel
y to
the
CEO
— a
nd b
y th
e ap
plic
atio
n of
inte
llect
ual h
ones
ty
and
obje
ctiv
ity in
dra
win
g co
nclu
sion
s w
ithou
t bia
s or
ou
tsid
e in
fluen
ce.
Org
aniz
atio
n
The
Inte
rnal
Aud
it gr
oup
has
mad
e m
ajor
enh
ance
men
ts
to it
s or
gani
zatio
n. A
focu
s on
mor
e gr
anul
ar a
nd m
ore
freq
uent
aud
it co
vera
ge, a
nd in
crea
sed
regu
lato
ry
requ
irem
ents
and
/or
expe
cted
wor
k, c
ontin
ue to
dri
ve
reso
urce
gro
wth
. Our
cor
e In
tern
al A
udit
head
coun
t gr
ew s
igni
fican
tly in
201
3 —
up
15%
from
the
2012
leve
l —
and
will
incr
ease
by
an a
dditi
onal
15%
by
year
-end
20
14. O
ther
enh
ance
men
ts in
clud
e:
to im
prov
e ou
r or
gani
zatio
n’s
effec
tiven
ess,
in
clud
ing
crea
ting
a ne
w C
hief
Aud
itor
of R
isk
role
and
dev
elop
ing
core
ris
k au
dito
r te
ams
that
pa
rtne
r w
ith li
ne o
f bus
ines
s au
dit t
eam
s w
ith th
e ob
ject
ive
of e
nsur
ing
that
the
cove
rage
of r
isk
is
com
plet
e an
d co
mpr
ehen
sive
issu
es w
ith th
e ai
m o
f ide
ntify
ing
risk
s ac
ross
line
s of
bus
ines
s an
d fu
rthe
r en
hanc
ing
a cr
oss-
busi
ness
m
inds
et w
ithin
Inte
rnal
Aud
it
esta
blis
hing
a n
ew ro
le, D
irect
or o
f Tra
inin
g, to
dri
ve
a st
rate
gic
trai
ning
age
nda
acro
ss th
e fu
nctio
n
Prac
tice
s an
d pr
oces
ses
We
cont
inua
lly a
sses
s an
d im
prov
e au
dit p
olic
ies
and
proc
esse
s in
resp
onse
to in
tern
al q
ualit
y as
sura
nce
resu
lts, i
ndus
try
guid
ance
and
bes
t pra
ctic
es, a
nd re
gu-
lato
ry e
xpec
tatio
ns. W
e ha
ve m
ade
a nu
mbe
r of
cha
nges
to
our
pra
ctic
es to
bet
ter
posi
tion
Inte
rnal
Aud
it to
pr
ovid
e ap
prop
riat
e co
vera
ge o
f key
ris
ks. W
e ha
ve
mad
e im
prov
emen
ts in
the
follo
win
g ar
eas,
incl
udin
g,
amon
g ot
hers
:
Bank
Sec
recy
Act
/Ant
i-Mon
ey L
aund
erin
g la
ws
and
Offi
ce o
f For
eign
Ass
ets
Cont
rol.
In Ju
ne
2013
, we
rolle
d ou
t a fo
rmal
pro
gram
to a
rtic
ulat
e th
e ap
proa
ch a
nd fr
amew
ork
for
cond
uctin
g au
dit
activ
ities
for
the
com
pany
’s Ba
nk S
ecre
cy A
ct/A
nti-
Mon
ey L
aund
erin
g la
ws
and
Offi
ce o
f For
eign
Ass
ets
Cont
rol/
Sanc
tions
firm
wid
e pr
ogra
ms.
Risk
and
con
trol
sel
f-as
sess
men
t. W
e re
vise
d th
e au
dit t
estin
g ap
proa
ch r
elat
ed to
a r
isk
and
cont
rol
self-
asse
ssm
ent.
Elem
ents
test
ed in
clud
e ke
y go
vern
ance
and
ove
rsig
ht c
ompo
nent
s; in
here
nt
risk
com
posi
tion
and
ratin
gs; c
ontr
ol e
ffect
ive-
ness
com
posi
tion,
sub
stan
tiatio
n an
d de
sign
; and
re
sidu
al r
isk.
Polic
y im
prov
emen
ts. I
n O
ctob
er 2
014,
we
enha
nced
po
licie
s re
late
d to
aud
it co
vera
ge o
f the
firm
wid
e N
ew B
usin
ess
Initi
ativ
e Ap
prov
al p
rogr
am a
nd T
hird
-Pa
rty
Ove
rsig
ht p
rogr
am to
fost
er c
onsi
sten
cy a
cros
s au
dit t
eam
s in
ris
k as
sess
men
t, au
dit t
estin
g an
d co
ntin
uous
mon
itori
ng a
ctiv
ities
.
INTE
RN
AL
AU
DIT
H
OW
WE
DO
BU
SIN
ESS
— O
UR
CO
NTR
OL
ENV
IRO
NM
ENT
58
Subj
ect M
atte
r Ex
pert
pro
gram
. We
solid
ified
our
ap
proa
ch to
sub
ject
mat
ter
expe
rtis
e by
dev
elop
ing
a fo
rmal
Sub
ject
Mat
ter
Expe
rt p
rogr
am in
June
20
13. T
he p
urpo
se o
f the
pro
gram
is to
ena
ble
mor
e co
mpr
ehen
sive
and
con
sist
ent a
udit
cove
rage
of
cert
ain
topi
cs, d
evel
op a
nd m
aint
ain
expe
rtis
e in
ce
rtai
n su
bjec
t are
as, a
nd id
entif
y cr
oss-
busi
ness
is
sues
and
tren
ds a
nd th
en to
com
mun
icat
e th
ose
findi
ngs
acro
ss a
udit
team
s to
effe
ct c
hang
es to
pl
anne
d co
vera
ge.
Enha
nced
Qua
lity
Assu
ranc
e pr
ogra
m. A
lso
in Ju
ne
2013
, we
expa
nded
our
Qua
lity
Assu
ranc
e pr
ogra
m
and
appr
oach
to fa
cilit
ate
an a
sses
smen
t of o
vera
ll au
dit c
over
age.
The
app
roac
h en
com
pass
es a
ll ac
tiv-
ities
of a
n au
dit t
eam
, inc
ludi
ng a
udit
plan
adm
in-
istr
atio
n, a
udits
, exe
cutiv
e m
anag
emen
t rep
ortin
g,
issu
e cl
osur
e va
lidat
ion,
con
tinuo
us a
uditi
ng a
ctiv
ities
an
d ch
ange
eve
nts
(i.e.
, any
act
ivity
that
has
sig
nif-
ican
t im
pact
on
the
cont
rol e
nviro
nmen
t, in
clud
ing,
fo
r exa
mpl
e, n
ew p
rodu
cts
and
new
acc
ount
ing
pron
ounc
emen
ts).
The
Qual
ity A
ssur
ance
team
de
scrib
ed a
bove
adm
inis
ters
the
prog
ram
.
Trai
ning
str
ateg
y. W
e re
cent
ly la
unch
ed a
mor
e co
mpr
ehen
sive
trai
ning
str
ateg
y fo
cuse
d on
dev
el-
opm
ent o
f pro
fess
iona
l ski
lls, t
echn
ical
ski
lls a
nd
prod
uct k
now
ledg
e.
Take
n to
geth
er, t
he c
ompa
ny’s
effor
ts to
sim
plify
and
de
-ris
k ou
r bus
ines
s, a
long
with
our
inve
stm
ents
and
im
prov
emen
ts a
cros
s th
e bu
sine
sses
, Ove
rsig
ht &
Con
trol
, Ri
sk, F
inan
ce, C
ompl
ianc
e, L
egal
and
Inte
rnal
Aud
it re
pres
ent o
ne o
f the
larg
est u
nder
taki
ngs
in o
ur h
isto
ry.
The
resu
lt is
an
infr
astr
uctu
re a
nd fi
rmw
ide
focu
s on
eff
ectiv
e co
ntro
ls b
eyon
d w
hat w
e ha
ve d
one
befo
re.
Thes
e fa
r-re
achi
ng s
teps
are
the
right
thin
g to
do
for o
ur
com
pany
. We
know
we
have
mor
e w
ork
to d
o, a
nd w
e re
cogn
ize
the
need
for c
ontin
ued
vigi
lanc
e to
ass
ess
and
ensu
re th
e eff
ectiv
enes
s of
our
con
trol
s ov
er ti
me.
INTE
RN
AL
AU
DIT
IV.
OU
R C
UST
OM
ER C
OM
MIT
MEN
T
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T61
CON
SUM
ER &
CO
MM
UN
ITY
BAN
KIN
G
OU
R C
UST
OM
ER C
OM
MIT
MEN
T
We
oper
ate
thro
ugh
four
dis
tinct
line
s of
bus
ines
s w
ith
one
com
mon
goa
l: se
rvin
g ou
r cu
stom
ers.
Col
lect
ivel
y,
we
wor
k ha
nd in
han
d w
ith m
illio
ns o
f con
sum
ers
and
smal
l bus
ines
ses,
as
wel
l as
man
y of
the
wor
ld’s
mos
t pr
omin
ent c
orpo
rate
, ins
titut
iona
l and
gov
ernm
ent
clie
nts,
to m
eet t
he fu
ll br
eadt
h of
thei
r fin
anci
al n
eeds
. O
ur w
ork
incl
udes
:
daily
fina
nces
and
sav
e an
d in
vest
for
the
futu
re,
from
pur
chas
ing
a ne
w h
ome
to fu
ndin
g a
colle
ge
educ
atio
n or
retir
emen
t
and
mid
-siz
e bu
sine
sses
, spu
rrin
g jo
b cr
eatio
n in
lo
cal m
arke
ts a
nd b
uild
ing
vibr
ant c
omm
uniti
es
optio
ns a
nd s
tren
gthe
n th
eir
capi
tal p
ositi
on,
enab
ling
them
to re
inve
st in
thei
r bu
sine
sses
and
m
eet t
heir
long
-ter
m g
oals
capi
tal t
o w
ork,
from
loca
l gov
ernm
ents
inve
stin
g in
in
fras
truc
ture
to p
ensi
on fu
nds
gene
ratin
g re
turn
s fo
r th
eir
bene
ficia
ries
Each
of o
ur b
usin
esse
s fo
cuse
s on
way
s to
impr
ove
serv
ices
cus
tom
ers
wan
t and
by
mak
ing
it ea
sier
for t
hem
to
do
busi
ness
with
us.
In th
is s
ectio
n, w
e de
scrib
e so
me
of th
e sp
ecifi
c st
eps
our l
ines
of b
usin
ess
have
take
n.
CON
SUM
ER &
CO
MM
UN
ITY
BA
NK
ING
Acro
ss th
e co
mpa
ny, w
e be
lieve
that
whe
n w
e tr
eat
peop
le w
ell,
they
will
wan
t to
do m
ore
busi
ness
with
us
. Tha
t is
why
Con
sum
er &
Com
mun
ity B
anki
ng (C
CB)
has
focu
sed
on d
efini
ng th
e ke
ys to
a g
reat
cus
tom
er
trai
ning
, we
mea
sure
our
suc
cess
thro
ugh
cust
omer
fe
edba
ck, a
nd w
e m
ake
sure
our
pro
duct
s an
d se
rvic
es
keep
up
with
cha
ngin
g cu
stom
er n
eeds
.
The
Cust
omer
Exp
erie
nce
In 2
011,
regi
onal
and
dis
tric
t lea
ders
from
our
bra
nche
s ca
me
toge
ther
from
acr
oss
the
coun
try
to d
evel
op a
co
mm
on s
et o
f cus
tom
er s
ervi
ce p
rinci
ples
, cal
led
the
Five
1.
Alw
ays
be c
ourt
eous
and
pro
fess
iona
l
2.
Do th
e ri
ght t
hing
3.
Build
last
ing
rela
tions
hips
4. O
wn
cust
omer
issu
es s
tart
to fi
nish
Our
139
,000
em
ploy
ees
acro
ss C
CB —
from
cus
tom
er-
faci
ng b
anke
rs a
nd c
all c
ente
r sp
ecia
lists
to o
pera
-tio
ns c
olle
ague
s —
em
brac
e th
ese
Five
Key
s to
a G
reat
with
cus
tom
ers.
S
ince
we
intr
oduc
ed th
e Fi
ve K
eys,
we
have
bec
ome
#1
in c
usto
mer
sat
isfa
ctio
n am
ong
the
larg
est
U.S
. ban
ks, a
ccor
ding
to th
e A
mer
ican
Cus
tom
er S
atis
fact
ion
Inde
x. W
e al
so h
ave
subs
tant
ially
im
prov
ed o
ur J
.D. P
ower
cus
tom
er s
atis
fact
ion
rank
ings
:
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T62 Im
plem
enti
ng fr
ont-
line
empl
oyee
s’
advi
ce
We
also
are
see
king
mor
e ad
vice
from
our
fron
t-lin
e em
ploy
ees.
The
y in
tera
ct d
irect
ly w
ith o
ur c
usto
mer
s an
d kn
ow th
e lit
tle a
nd b
ig th
ings
we
can
do to
impr
ove
the
cust
omer
’s ex
peri
ence
. Alto
geth
er, e
mpl
oyee
fe
edba
ck h
as g
ener
ated
mor
e th
an 1
,100
impr
ovem
ents
to
cus
tom
er s
ervi
ce o
ver
the
past
two
year
s, in
clud
ing:
Conn
ect a
nd in
trod
uce.
Whe
n te
leph
one
bank
ing
spec
ialis
ts n
eed
to tr
ansf
er a
cal
l to
a co
lleag
ue
bett
er e
quip
ped
to h
andl
e th
e is
sue,
they
dro
p off
th
e lin
e on
ly a
fter
intr
oduc
ing
the
clie
nt, s
umm
a-ri
zing
the
issu
e an
d as
king
the
cust
omer
if h
e or
she
is
com
fort
able
with
the
tran
sfer
Ask
toda
y, s
ee to
day.
Cus
tom
ers
can
see
upda
ted
info
rmat
ion,
suc
h as
a fe
e re
fund
or
a ne
w a
ddre
ss,
on C
hase
Onl
ine
with
in m
inut
es o
f req
uest
ing
chan
ges
for
chec
king
and
sav
ings
acc
ount
s
Get t
o a
hum
an. C
usto
mer
s ca
lling
on
the
tele
phon
e ca
n qu
ickl
y sp
eak
with
a b
anki
ng s
peci
alis
t rat
her
than
hav
ing
to p
ush
seve
ral b
utto
ns
Trea
ting
cus
tom
ers
fair
ly
As w
e w
ork
to d
eliv
er p
rodu
cts
and
serv
ices
that
offe
r a
cons
iste
nt a
nd e
xcep
tiona
l cus
tom
er e
xper
ienc
e, w
e al
so
reco
gniz
e th
at fa
irnes
s m
ust b
e th
e fo
unda
tion
of o
ur re
la-
tions
hip
with
eve
ry c
usto
mer
. Ind
eed,
trea
ting
cust
omer
s fa
irly
is a
cor
e pr
inci
ple
in o
ur B
usin
ess
Prin
cipl
es.
To m
ake
sure
we
live
up to
this
sta
ndar
d, w
e ha
ve la
id
out p
rinc
iple
s an
d pr
oced
ures
to e
nsur
e fa
ir tr
eatm
ent
of c
usto
mer
s; w
orke
d to
sim
plify
our
dis
clos
ures
, pr
oduc
ts a
nd s
ervi
ces,
and
ope
ratio
ns; a
nd e
nhan
ced
our
effor
ts to
list
en a
nd re
spon
d to
cus
tom
er fe
edba
ck.
Thes
e eff
orts
hav
e be
en b
olst
ered
by
the
esta
blis
hmen
t of
a d
istin
ct in
tern
al C
onsu
mer
& C
omm
unity
Pra
ctic
es
grou
p to
adv
ocat
e fo
r cu
stom
ers
and
driv
e si
mpl
icity
an
d cl
arity
into
our
bus
ines
s m
odel
. We
also
hav
e
initi
ated
a C
usto
mer
Com
mun
icat
ions
Cou
ncil
to re
view
se
rvic
ing
lett
ers
acro
ss C
CB a
nd to
ens
ure
that
bot
h th
e fo
rmat
and
lang
uage
exp
lain
sim
ply,
cle
arly
and
co
ncis
ely
wha
t the
cus
tom
er n
eeds
to k
now
and
do.
CCB
lead
ersh
ip w
orks
to e
nsur
e th
at w
e ad
here
to th
ese
prin
cipl
es th
roug
h va
riou
s fo
rum
s, in
clud
ing
thro
ugh
(1)
a co
mpl
aint
foru
m w
here
CCB
lead
ers
revi
ew c
usto
mer
co
mpl
aint
s an
d re
com
men
d ch
ange
s an
d (2
) rem
edia
-tio
n w
orki
ng g
roup
s th
at re
view
tech
nolo
gy in
cide
nts
and
prod
uct a
nd m
arke
ting
chan
ges
that
may
hav
e ad
vers
ely
affec
ted
cust
omer
s.
Evol
ving
to s
erve
our
cus
tom
ers’
ch
angi
ng n
eeds
We
wan
t to
serv
e cu
stom
ers
in th
e ch
anne
ls in
whi
ch
they
wan
t to
be s
erve
d. In
crea
sing
ly, t
hat m
eans
di
gita
l and
mob
ile. N
earl
y 36
mill
ion
cust
omer
s us
e ch
ase.
com
regu
larl
y, a
nd 1
8 m
illio
n pe
ople
use
Cha
se
Mob
ile. T
oday
, Cha
se c
usto
mer
s m
ake
mor
e th
an h
alf
thei
r de
posi
ts a
t an
ATM
or
with
a p
ictu
re o
f a c
heck
ta
ken
with
a s
mar
tpho
ne.
That
has
cha
nged
how
cus
tom
ers
use
our
bran
ches
—
so w
e ha
ve c
hang
ed h
ow w
e de
sign
and
sta
ff th
em. W
e ha
ve a
dded
mor
e AT
Ms
to le
t cus
tom
ers
serv
e th
em-
selv
es q
uick
ly a
nd m
ore
bank
ers
to h
elp
cust
omer
s ge
t a m
ortg
age
for
thei
r ho
me,
sav
e fo
r co
llege
and
re
tirem
ent o
r ru
n th
eir
smal
l bus
ines
s. T
o m
ake
thos
e co
nver
satio
ns m
ore
priv
ate,
we
have
add
ed a
dditi
onal
co
nfer
ence
and
mee
ting
room
s.
We
also
con
tinue
to u
pgra
de o
ur o
nlin
e an
d m
obile
se
rvic
es, p
rovi
ding
mor
e in
form
atio
n m
ore
easi
ly a
nd
quic
kly,
as
wel
l as
tapp
ing
into
the
late
st te
chno
logy
, su
ch a
s Ap
ple
Pay.
Ulti
mat
ely,
con
sum
ers
will
cho
ose
how
they
wan
t to
bank
— in
per
son,
via
onl
ine,
thro
ugh
thei
r ph
one
or s
mar
tpho
ne, o
r a
com
bina
tion
of th
ese
optio
ns —
and
with
who
m. I
n CC
B, w
e w
ill c
ontin
ue to
ai
m to
trea
t cus
tom
ers
wel
l in
ever
y in
tera
ctio
n w
e ha
ve
with
them
so
they
will
wan
t to
do m
ore
busi
ness
with
us.
CON
SUM
ER &
CO
MM
UN
ITY
BAN
KIN
G
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T63
Case
stu
dy: M
ortg
age
serv
icin
g im
prov
emen
ts
As o
ne o
f the
Uni
ted
Stat
es’ l
arge
st m
ortg
age
lend
ers,
w
e m
ust h
ave
robu
st p
olic
ies,
pro
cess
es a
nd p
roce
-du
res
rela
ting
to fo
recl
osur
es. U
nfor
tuna
tely
, lik
e m
any
in o
ur in
dust
ry, o
ur p
ract
ices
wer
e no
t des
igne
d to
han
dle
the
unpr
eced
ente
d in
crea
se in
vol
ume
that
oc
curr
ed a
s a
resu
lt of
the
finan
cial
cri
sis.
Loo
king
ba
ck, w
e re
cogn
ize
ther
e w
ere
a nu
mbe
r of
are
as
that
nee
ded
enha
ncem
ent —
from
sw
orn
docu
men
t ex
ecut
ion
(to
prev
ent s
o-ca
lled
robo
-sig
ning
) to
gove
r-na
nce
proc
esse
s an
d qu
ality
con
trol
.
Muc
h of
our
wor
k ha
s fo
cuse
d on
impr
ovin
g ou
r op
erat
ing
mod
el in
this
are
a, tr
aini
ng o
ur e
mpl
oyee
s,
impr
ovin
g ou
r cu
stom
er c
omm
unic
atio
ns, e
nhan
cing
ou
r te
chno
logy
pla
tform
s, e
nsur
ing
sust
aina
bilit
y of
our
pr
ogra
ms,
and
dee
peni
ng o
ur re
latio
nshi
ps w
ith o
ur
cust
omer
s, th
ird-
part
y ve
ndor
s an
d ot
her
key
stak
e-ho
lder
s. O
ur g
oal i
s to
del
iver
affo
rdab
le, s
usta
inab
le
and
mea
ning
ful h
ome
pres
erva
tion
assi
stan
ce b
y:
cust
omer
s in
thei
r ho
mes
sign
ifica
nt a
nd m
eani
ngfu
l rel
ief
and
inco
me
leve
ls a
nd a
mon
g pr
otec
ted
clas
ses
Ope
rati
ng m
odel
cha
nges
One
of t
he m
ost i
mpo
rtan
t cha
nges
we
have
mad
e is
ad
optin
g a
new
ope
ratin
g m
odel
that
ass
igns
a s
ingl
e po
int o
f con
tact
— a
Cus
tom
er A
ssis
tanc
e Sp
ecia
list
— to
eac
h cu
stom
er w
ith th
e ke
y be
nefit
of s
tayi
ng
conn
ecte
d to
cus
tom
ers
whe
n th
ey a
re h
avin
g di
ffi-
culty
mak
ing
thei
r pa
ymen
ts. I
n th
is w
ay, w
e ca
n he
lp
cust
omer
s pu
rsue
a lo
an m
odifi
catio
n pr
ogra
m a
t an
earl
y st
age
of d
elin
quen
cy to
avo
id fo
recl
osur
e. O
ther
im
prov
emen
ts in
clud
e:
Cust
omer
Ass
ista
nce
Spec
ialis
t so
team
mem
bers
are
ab
le to
re-e
ngag
e cu
stom
ers
for f
aste
r res
olut
ion
spec
ifica
lly fo
cuse
d on
Ser
vice
mem
bers
Civ
il Re
lief
Act a
nd b
ankr
uptc
y cu
stom
ers
to p
rovi
de th
e de
gree
of
spe
cial
ized
kno
wle
dge
nece
ssar
y to
bes
t sup
port
cu
stom
ers
faci
ng a
fina
ncia
l har
dshi
p
Empl
oyee
trai
ning
Whi
le a
n im
prov
ed o
pera
ting
mod
el is
an
impo
rtan
t fir
st s
tep,
we
also
sou
ght t
o tr
ain
our
empl
oyee
s be
tter
on
how
to s
uppo
rt c
usto
mer
s w
ho a
re h
avin
g di
fficu
lty
mak
ing
paym
ents
. We
have
mad
e gr
eat p
rogr
ess
in
thos
e eff
orts
, inc
ludi
ng:
with
cus
tom
ers
havi
ng d
ifficu
lty m
akin
g pa
ymen
ts.
Nea
rly
100%
of o
ur m
ortg
age
bank
ing
empl
oyee
s w
ho s
erve
cus
tom
ers
faci
ng p
oten
tial f
orec
losu
re
have
take
n pa
rt in
suc
h a
trai
ning
pro
gram
part
icul
ar c
usto
mer
issu
es in
ord
er to
cre
ate
a hi
gh
leve
l of e
xper
tise
by jo
b fu
nctio
n
-te
nt s
uppo
rt a
cros
s op
erat
ing
divi
sion
s
all j
ob fu
nctio
ns
F
orec
losu
re p
reve
ntio
n
fore
clos
ures
sin
ce 2
00
9
mod
ifica
tion
s si
nce
200
9
63H
OW
WE
DO
BU
SIN
ESS
— O
UR
CU
STO
MER
CO
MM
ITM
ENT
CON
SUM
ER &
CO
MM
UN
ITY
BAN
KIN
GH
OW
WE
DO
BU
SIN
ESS
— O
UR
CU
STO
MER
CO
MM
ITM
ENT
64
Fair
ness
to c
usto
mer
s
We
are
com
mitt
ed to
pro
vidi
ng th
e sa
me
fair
trea
tmen
t an
d qu
ality
ser
vice
thro
ugh
the
fore
clos
ure
proc
ess
acro
ss g
eogr
aphi
c re
gion
s an
d in
com
e le
vels
. As
we
have
wor
ked
thro
ugh
this
per
iod
of e
leva
ted
cust
omer
pa
ymen
t diffi
culty
, we
have
wor
ked
clos
ely
with
our
Co
rpor
ate
Fair
Len
ding
par
tner
s to
hel
p en
sure
that
th
e as
sist
ance
we
are
offer
ing
to c
usto
mer
s is
fair
and
eq
uita
ble.
As
part
of t
his
wor
k, w
e co
ntin
ue to
refin
e an
d ex
pand
our
Fai
r Le
ndin
g pr
ogra
m to
ens
ure
that
ne
w p
olic
ies,
pro
cedu
res
and
proc
esse
s ar
e eff
ectiv
ely
impl
emen
ted
and
are
in fu
ll co
mpl
ianc
e w
ith fa
ir le
ndin
g la
ws.
We
also
trac
k cu
stom
er o
utco
mes
clo
sely
to m
ake
sure
that
fore
clos
ure
prev
entio
n ac
tions
are
con
sist
ent
for
the
over
all p
opul
atio
n.
Tech
nolo
gy
As w
e ha
ve d
iscu
ssed
thro
ugho
ut th
is re
port
, one
are
a w
e ar
e co
nsis
tent
ly fo
cuse
d on
impr
ovin
g is
tech
nolo
gy.
That
als
o is
true
in o
ur M
ortg
age
busi
ness
. We
have
in
vest
ed m
ore
than
220
,000
hou
rs o
f our
tech
nolo
gy
empl
oyee
s’ ti
me
to im
prov
e ou
r M
ortg
age
busi
ness
, in
clud
ing:
com
plai
nts
and
resp
onse
s
tech
nolo
gy e
nhan
cem
ent p
roje
cts
rang
ing
from
da
ta q
ualit
y, d
ata
man
agem
ent a
nd a
utom
ated
ex
cept
ion
trac
king
Thes
e en
hanc
emen
ts d
irect
ly s
uppo
rt th
e ne
w b
usin
ess
mod
el, e
nabl
ing
cust
omer
s to
hav
e di
rect
con
tact
with
a
sing
le p
oint
of c
onta
ct a
nd ta
ilori
ng c
omm
unic
atio
ns to
pr
esen
t onl
y th
ose
fore
clos
ure
prev
entio
n op
tions
that
w
e ca
n off
er d
irect
ly to
a c
usto
mer
.
of a
ll tr
aini
ng m
ater
ials
lear
ning
reco
rds
stor
age
core
func
tiona
l rol
es, i
nclu
ding
a m
anag
er le
arni
ng
path
and
sem
iann
ual l
earn
ing
path
revi
ews
to e
nsur
e th
at tr
aini
ng c
onte
nt re
mai
ns re
leva
nt
Cust
omer
com
mun
icat
ions
We
also
hav
e be
en e
nhan
cing
our
com
mun
icat
ions
with
cu
stom
ers
to p
rovi
de b
ette
r co
unse
ling
and
mor
e cl
arity
fo
r cu
stom
ers
abou
t the
ir o
ptio
ns. T
o im
prov
e co
mm
u-ni
catio
ns fo
r cu
stom
ers
cons
ider
ing
way
s to
pre
vent
fo
recl
osur
e, w
e ha
ve:
lett
ing
cust
omer
s kn
ow a
t the
out
set t
he o
ptio
ns a
nd
bene
fits
that
may
be
avai
labl
e to
them
each
cus
tom
er
docu
men
ts a
re c
ompl
eted
in
com
plet
e do
cum
ents
and
freq
uent
sta
tus
upda
tes
C
usto
mer
ser
vice
W
ith
a fo
cus
on s
ervi
ng o
ur c
usto
mer
s,
we
have
mea
sura
bly
impr
oved
our
Serv
icin
g, u
p fr
om #
13 in
20
10, a
nd
#12
in 2
010
.
64H
OW
WE
DO
BU
SIN
ESS
— O
UR
CU
STO
MER
CO
MM
ITM
ENT
CON
SUM
ER &
CO
MM
UN
ITY
BAN
KIN
G
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T65
COR
PO
RAT
E &
INV
ESTM
ENT
BA
NK
We
form
ed th
e Co
rpor
ate
& In
vest
men
t Ban
k (C
IB)
in 2
012
by c
ombi
ning
wha
t pre
viou
sly
had
been
two
dist
inct
gro
ups,
the
Inve
stm
ent B
ank
and
Trea
sury
&
Secu
ritie
s Se
rvic
es, t
o st
ream
line
our
serv
ice
to o
ur
clie
nts,
incr
ease
effi
cien
cy a
nd b
ette
r en
able
clie
nt-
faci
ng e
xecu
tives
to p
rese
nt c
oord
inat
ed, i
nnov
ativ
e so
lutio
ns to
the
wor
ld’s
mos
t pro
min
ent c
orpo
ratio
ns,
gove
rnm
ents
and
inst
itutio
ns.
Our
mis
sion
is to
hel
p ou
r clie
nts
succ
eed
— h
owev
er
they
defi
ne it
, whe
ther
they
are
a g
row
ing
corp
orat
ion
look
ing
to ra
ise
capi
tal o
r a
fund
man
ager
see
king
to
outp
erfo
rm a
n in
vest
men
t ben
chm
ark.
With
that
in
min
d, w
e ar
e ac
tivel
y w
orki
ng to
ele
vate
our
sta
ndar
ds
and
mor
e cl
osel
y w
eave
toge
ther
our
bus
ines
ses
with
a
goal
of i
mpr
ovin
g ou
r cl
ient
s’ o
vera
ll ex
peri
ence
with
us.
Thro
ugho
ut th
e CI
B, m
any
initi
ativ
es a
re u
nder
way
to
prov
ide
addi
tiona
l edu
catio
n an
d tr
aini
ng to
our
52,
000
empl
oyee
s. W
e ha
ve re
orga
nize
d ou
rsel
ves
to p
rom
ote
incr
ease
d fo
cus
on e
scal
atio
n of
issu
es to
enh
ance
our
cl
ient
s’ e
nd-t
o-en
d ex
peri
ence
, whi
le s
impl
ifyin
g ou
r bu
sine
ss m
odel
and
inve
stin
g in
tech
nolo
gy.
Coor
dina
ting
bet
ter
to s
uppo
rt c
lient
s
In B
anki
ng, w
hich
uni
tes
Corp
orat
e Ba
nker
s, T
reas
ury
Serv
ices
pro
fess
iona
ls a
nd In
vest
men
t Ban
kers
und
er
one
umbr
ella
, clie
nts
are
bene
fitin
g fr
om c
lose
r co
nnec
-tio
ns b
etw
een
the
prof
essi
onal
s w
ho a
re in
dai
ly c
onta
ct
with
them
and
our
Inve
stm
ent B
anke
rs w
ho s
peci
aliz
e in
str
ateg
ic a
dvis
ory
serv
ices
and
cap
ital r
aisi
ng.
Impr
ovin
g th
e co
ordi
natio
n am
ong
thes
e te
ams
help
s us
gai
n a
mor
e ho
listic
vie
w o
f our
clie
nts’
nee
ds a
nd
chal
leng
es a
nd th
en d
raw
upo
n ou
r m
any
prod
ucts
an
d se
rvic
es to
cre
ate
the
righ
t sol
utio
ns fo
r th
em. F
or
exam
ple,
we
are
prov
idin
g on
e m
ultin
atio
nal i
ndus
tria
l co
mpa
ny w
ith fi
nanc
ing
prod
ucts
and
ser
vice
s fr
om 14
di
ffere
nt g
roup
s in
sup
port
of i
ts b
usin
ess
activ
ities
in
29 c
ount
ries
aro
und
the
wor
ld.
To h
elp
impr
ove
the
expe
rien
ce o
f our
larg
e in
stitu
tiona
l in
vest
or c
lient
s, w
e ha
ve re
orga
nize
d th
e w
ay o
ur te
ams
wor
k to
geth
er to
fost
er g
reat
er c
ontin
uity
and
acc
ount
-ab
ility
— fr
om s
ales
to o
nboa
rdin
g, to
clie
nt s
ervi
ce, t
o op
erat
ions
and
tech
nolo
gy. R
educ
ing
silo
s, in
crea
sing
ac
coun
tabi
lity
and
impr
ovin
g in
form
atio
n flo
w a
cros
s te
ams
are
resu
lting
in fe
wer
err
ors,
gre
ater
effi
cien
cy
and
mor
e po
sitiv
e cl
ient
inte
ract
ions
.
Bett
er c
oord
inat
ion
amon
g ou
r te
ams
this
yea
r he
lped
us
pro
vide
a p
rim
e cu
stod
y so
lutio
n fo
r a
larg
e al
ter-
nativ
es fu
nd r
un b
y a
glob
al a
sset
man
ager
. Wor
king
in
clos
e pa
rtne
rshi
p, th
e te
am s
ucce
ssfu
lly m
igra
ted
the
fund
to o
ur p
latfo
rm w
ith m
inim
al d
isru
ptio
n de
spite
the
com
plex
ity o
f the
fund
’s pr
oduc
t sui
te a
nd th
e m
ultip
le
func
tions
and
regi
ons
invo
lved
.
COR
POR
ATE
& I
NV
ESTM
ENT
BAN
KH
OW
WE
DO
BU
SIN
ESS
— O
UR
CU
STO
MER
CO
MM
ITM
ENT
66 Stre
ngth
enin
g ou
r cl
ient
-cen
tere
d cu
ltur
e
Clie
nts
alw
ays
have
bee
n at
the
cent
er o
f our
bus
ines
s,
and
rein
forc
ing
a st
rong
, clie
nt-c
ente
red
cultu
re is
a
top
prio
rity
for
us. I
dent
ifyin
g is
sues
ear
ly a
nd a
ppro
-pr
iate
ly e
scal
atin
g co
ncer
ns k
eep
smal
ler
prob
lem
s fr
om b
ecom
ing
big
ones
and
als
o re
sults
in b
ette
r cl
ient
ser
vice
.
As m
entio
ned
on p
age
33, a
s pa
rt o
f our
effo
rt to
ens
ure
a ro
bust
dia
logu
e w
ith e
mpl
oyee
s an
d m
ake
sure
they
un
ders
tand
the
lett
er a
nd s
piri
t of w
hat i
s ex
pect
ed
of th
em, t
he le
ader
ship
of L
egal
, Sal
es a
nd T
radi
ng
deve
lope
d a
prog
ram
this
yea
r to
pro
mot
e en
hanc
ed
info
rmat
ion
shar
ing
and
trad
ing
prac
tices
for
Sale
s an
d Tr
adin
g pe
rson
nel.
This
man
dato
ry p
rogr
am p
rovi
ded
spec
ific
guid
elin
es a
roun
d ge
nera
l inf
orm
atio
n flo
w,
trad
ing
info
rmat
ion
and
chat
s, a
s w
ell a
s in
crea
sed
awar
enes
s ar
ound
pot
entia
l are
as o
f con
cern
.
Furt
herm
ore,
we
have
exp
ande
d a
Cultu
re a
nd C
ondu
ct
prog
ram
to in
clud
e al
l of o
ur C
IB b
usin
esse
s gl
obal
ly.
This
effo
rt in
volv
es a
n as
sess
men
t of c
ondu
ct r
isks
, m
itiga
tion
plan
s ac
ross
thos
e ri
sks,
met
rics
and
trai
ning
. Se
nior
lead
ers
in e
ach
line
of b
usin
ess
have
hos
ted
focu
s gr
oups
abo
ut o
ur c
ultu
re, i
nclu
ding
wha
t we
do
wel
l and
wha
t we
can
impr
ove,
as
wel
l as
cont
rols
and
ke
y dr
iver
s of
beh
avio
r. Im
port
antly
, we
incl
uded
mor
e ju
nior
em
ploy
ees
in th
is p
rogr
am to
bri
dge
the
gap
that
ca
n ex
ist b
etw
een
seni
or a
nd ju
nior
team
mem
bers
.
Confl
icts
man
agem
ent i
s a
corn
erst
one
of o
ur c
lient
- ce
nter
ed a
ppro
ach
to b
usin
ess,
and
we
cons
ider
it p
art
of e
very
one’
s jo
b to
hel
p id
entif
y an
d m
itiga
te p
oten
tial
confl
icts
of i
nter
est.
We
star
t with
robu
st p
olic
ies
and
proc
edur
es, w
hich
we
adap
t ove
r tim
e to
add
ress
de
velo
pmen
ts a
s ou
r bu
sine
sses
gro
w a
nd e
volv
e.
Beca
use
confl
icts
diff
er c
onsi
dera
bly
acro
ss th
e lin
es
of b
usin
esse
s, m
ultip
le c
ompl
emen
tary
con
trol
gro
ups,
in
clud
ing
our
Confl
icts
Offi
ce, L
egal
and
Com
plia
nce,
as
wel
l as
Ove
rsig
ht &
Con
trol
, wor
k cl
osel
y w
ith o
ur
busi
ness
exe
cutiv
es to
iden
tify
and
man
age
the
confl
icts
th
at a
rise
, bot
h re
al a
nd p
erce
ived
.
rais
ed o
n be
half
of s
tate
s, lo
cal g
over
nmen
ts, s
choo
l
dist
rict
s an
d no
npro
fits
, pro
vidi
ng th
em w
ith
nece
ssar
y
fund
s to
bui
ld s
choo
ls, r
oads
and
col
lege
faci
litie
s an
d
to s
uppo
rt o
ther
infr
astr
uctu
re p
roje
cts.
COR
POR
ATE
& I
NV
ESTM
ENT
BAN
K
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T67
Stre
amlin
ing
wit
h te
chno
logy
Tech
nolo
gy is
the
back
bone
of o
ur b
usin
ess,
and
in th
e la
st fi
ve y
ears
, our
com
pany
has
spe
nt ro
ughl
y 8%
-9%
of
tota
l rev
enue
on
impr
ovin
g ou
r ca
pabi
litie
s. In
the
CIB,
the
inve
stm
ents
we
are
mak
ing
are
desi
gned
not
on
ly to
impr
ove
our
secu
rity
, per
form
ance
and
effi
cien
cy
but t
o m
ake
it ea
sier
for
clie
nts
to d
o bu
sine
ss w
ith u
s.
As p
art o
f our
effo
rt to
cre
ate
a m
ore
mod
ular
bus
ines
s an
d te
chno
logy
arc
hite
ctur
e, w
e ha
ve im
plem
ente
d fr
ont-
to-b
ack
arch
itect
ure
and
oper
atin
g m
odel
revi
ews
acro
ss s
elec
t bus
ines
ses
to im
prov
e cl
ient
ser
vice
, op
timiz
e pr
oces
s flo
ws,
inte
grat
e in
fras
truc
ture
and
si
mpl
ify h
ow w
e op
erat
e. T
his
year
alo
ne, w
e ar
e on
tr
ack
to d
ecom
mis
sion
mor
e th
an 2
00 d
iffer
ent a
pplic
a-tio
ns a
nd o
ver
5,00
0 se
rver
s.
Thes
e in
vest
men
ts a
lso
are
crea
ting
tang
ible
ben
efits
for
clie
nts.
In e
arly
201
3, o
ur M
arke
ts &
Inve
stor
Ser
vice
s bu
sine
sses
rolle
d ou
t our
new
clie
nt-f
acin
g pl
atfo
rm,
J.P. M
orga
n M
arke
ts. S
ince
then
, we
have
con
solid
ated
ne
arly
50
diffe
rent
app
licat
ions
, inc
ludi
ng re
sear
ch,
pre-
trad
e an
alyt
ics,
trad
e ex
ecut
ion,
trad
e st
atus
and
lim
its, p
ortfo
lio re
port
ing
and
mar
gins
, and
col
late
ral
man
agem
ent f
unct
ions
on
the
new
pla
tform
. Mor
e th
an 1
00,0
00 in
stitu
tiona
l clie
nt u
sers
now
are
usi
ng
this
enh
ance
d pl
atfo
rm, r
educ
ing
the
need
for
mul
tiple
lo
g-in
s an
d be
nefit
ing
from
a m
ore
cons
iste
nt e
xper
i-en
ce a
cros
s di
ffere
nt b
usin
esse
s an
d fu
nctio
ns.
In a
dditi
on, w
e ha
ve p
lace
d a
prio
rity
on
the
cont
rols
ar
ound
our
ele
ctro
nic
trad
ing
tech
nolo
gy, r
esul
ting
in a
re
view
of h
igh-
prio
rity
con
trol
s an
d im
plem
enta
tion
of
addi
tiona
l pro
tect
ions
.
Sim
plif
ying
bus
ines
ses
and
incr
easi
ng
tran
spar
ency
With
in th
e CI
B, w
e ha
ve ta
ken
a m
ulti-
face
ted
appr
oach
to
sim
plify
ing
our b
usin
ess
and
incr
easi
ng tr
ansp
aren
cy
to h
elp
clie
nts
bett
er u
nder
stan
d w
hat w
e do
and
mak
e m
ore
info
rmed
dec
isio
ns. I
n so
me
case
s, w
e ha
ve s
trea
m-
lined
, rat
iona
lized
or e
xite
d bu
sine
sses
in o
rder
to fo
cus
on th
e co
re a
ctiv
ities
that
are
mos
t im
port
ant t
o ou
r cl
ient
s. T
his
incl
udes
sca
ling
back
rela
tions
hips
and
tigh
t-en
ing
cont
rols
in c
orre
spon
dent
ban
king
, exi
ting
muc
h of
ou
r phy
sica
l com
mod
ities
bus
ines
s an
d se
lling
the
Glob
al
Spec
ial O
ppor
tuni
ties
Grou
p po
rtfo
lio (o
ur d
edic
ated
pr
inci
pal i
nves
tmen
t arm
). At
the
sam
e tim
e, w
e ar
e in
vest
ing
in te
chno
logy
and
infr
astr
uctu
re in
sup
port
of
core
bus
ines
ses
like
prim
e br
oker
age,
cus
tody
, and
ele
c-tr
onic
trad
ing
for e
quiti
es a
nd fi
xed
inco
me.
At a
mor
e gr
anul
ar le
vel,
we
have
take
n a
num
ber
of s
teps
to h
elp
our
clie
nts
bett
er u
nder
stan
d th
e st
ruct
ure,
pri
cing
and
beh
avio
r of
diff
eren
t pro
duct
s.
Spec
ifica
lly, f
or c
erta
in s
truc
ture
d pr
oduc
ts, w
e ha
ve
impl
emen
ted
mor
e st
ring
ent q
ualit
y st
anda
rds
and
have
upg
rade
d ou
r m
odel
s an
d an
alyt
ics
to im
prov
e ou
r cl
ient
s’ a
bilit
y to
und
erst
and
how
thes
e in
stru
-m
ents
per
form
und
er d
iffer
ent c
ondi
tions
. We
also
hav
e en
hanc
ed th
e co
nsis
tenc
y an
d tr
ansp
aren
cy o
f dis
clo-
sure
aro
und
the
pric
ing
of c
erta
in s
truc
ture
d pr
oduc
ts
and
incr
ease
d tr
ansp
aren
cy o
f quo
tatio
ns fo
r va
riou
s ov
er-t
he-c
ount
er d
eriv
ativ
es, e
nabl
ing
clie
nts
to m
ake
mor
e in
form
ed d
ecis
ions
.
Our
top
prio
rity
with
in th
e CI
B re
mai
ns h
elpi
ng o
ur
clie
nts
achi
eve
thei
r ob
ject
ives
by
prov
idin
g th
e be
st
poss
ible
adv
ice
and
prod
ucts
. With
the
cont
inue
d en
ergy
an
d co
mm
itmen
t of o
ur e
mpl
oyee
s, w
e co
ntin
ually
str
ive
to e
arn
our
clie
nts’
bus
ines
s an
d se
t new
sta
ndar
ds fo
r th
eir s
ucce
ss.
COR
POR
ATE
& I
NV
ESTM
ENT
BAN
KH
OW
WE
DO
BU
SIN
ESS
— O
UR
CU
STO
MER
CO
MM
ITM
ENT
68 COM
MER
CIA
L B
AN
KIN
G
Like
all
of o
ur b
usin
esse
s, C
omm
erci
al B
anki
ng is
co
ntin
ually
ask
ing
how
we
can
be b
ette
r an
d ho
w w
e
rew
ardi
ng fo
r ou
r cl
ient
s. T
his
help
s us
mai
ntai
n a
long
-ter
m r
elat
ions
hip
with
our
clie
nts.
A n
umbe
r of
ke
y im
prov
emen
ts w
e ha
ve m
ade
over
the
past
yea
rs
are
help
ing
us d
rive
tow
ard
thes
e go
als.
Part
ners
hip
driv
es m
ore
com
preh
ensi
ve
clie
nt s
olut
ions
Com
mer
cial
Ban
king
’s m
any
natu
ral t
ouch
poi
nts
with
th
e co
mpa
ny’s
othe
r lin
es o
f bus
ines
s en
able
us
to
wor
k to
geth
er a
cros
s bu
sine
sses
are
esp
ecia
lly e
vide
nt
whe
n lo
okin
g at
the
leve
l of b
usin
ess
part
ners
hip
and
volu
me
of c
lient
s th
at e
ngag
e w
ith m
ultip
le b
usin
esse
s:
last
yea
r Co
mm
erci
al B
anki
ng p
artic
ipat
ed in
833
fin
anci
ng tr
ansa
ctio
ns, i
nclu
ding
31
initi
al p
ublic
acqu
isiti
on tr
ansa
ctio
ns.
Trea
sury
Ser
vice
s pr
oduc
ts to
hel
p m
anag
e th
eir
busi
ness
mor
e effi
cien
tly.
near
ly 1
8 m
illio
n tim
es la
st y
ear.
Incr
easi
ngly
, clie
nts
use
our
com
mer
cial
car
ds a
nd m
erch
ant p
roce
ssin
g se
rvic
e, a
nd w
e se
e an
opp
ortu
nity
to b
ring
spe
cial
-iz
ed p
aym
ents
sol
utio
ns to
eve
n m
ore
clie
nts.
Prov
idin
g cu
stom
ized
sol
utio
ns th
roug
h de
dica
ted,
loca
l exp
erts
Duri
ng th
e la
st s
ever
al y
ears
, we
have
incr
ease
d ou
r fo
cus
on fi
ndin
g th
e ri
ght s
olut
ions
for
clie
nts
by u
sing
ou
r br
oad-
base
d pr
oduc
t set
. Whe
ther
our
clie
nts
need
to
rais
e ca
pita
l, pu
rcha
se n
ew e
quip
men
t or
open
a li
ne
of c
redi
t to
man
age
day-
to-d
ay o
pera
tions
, we
have
the
reso
urce
s to
hel
p:
who
spe
cial
ize
in in
vest
men
t ban
king
, ass
et-b
ased
le
ndin
g, s
yndi
cate
d fin
ance
, equ
ipm
ent fi
nanc
e,
trea
sury
ser
vice
s, e
nter
pris
e va
lue/
cash
flow
lend
ing
and
Empl
oyee
Sto
ck O
wne
rshi
p Pl
an tr
ansa
ctio
ns.
They
par
tner
with
our
loca
l ban
kers
to b
ring
cus
tom
-iz
ed, c
ompr
ehen
sive
and
app
ropr
iate
sol
utio
ns to
th
e m
arke
tpla
ce.
Com
mer
cial
Ban
king
so
clie
nts
can
bene
fit fr
om th
e
cont
inui
ng to
rec
eive
loca
l del
iver
y an
d se
rvic
e.
Thes
e gr
oups
incl
ude
tech
nolo
gy, o
il an
d ga
s,
food
and
bev
erag
e, a
nd m
edia
and
ent
erta
inm
ent,
amon
g ot
hers
.
bank
ers
and
cred
it an
d tr
easu
ry p
rofe
ssio
nals
to
prov
ide
mor
e lo
cal d
eliv
ery.
Sin
ce 2
006,
we
have
su
cces
sful
ly e
nter
ed 1
6 m
ajor
new
mar
kets
acr
oss
the
coun
try.
COM
MER
CIA
L BA
NKI
NG
Inte
rnat
iona
l Ser
vice
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T69
List
enin
g to
our
clie
nts’
feed
back
We
regu
larl
y su
rvey
our
Com
mer
cial
Ban
king
clie
nts
to g
ive
them
an
oppo
rtun
ity to
pro
vide
feed
back
on
wha
t we
are
doin
g w
ell a
nd w
here
we
can
impr
ove.
Ar
eas
cove
red
incl
ude
our
cove
rage
mod
el, e
xper
tise,
pr
oduc
ts, c
lient
ser
vice
and
impl
emen
tatio
ns. T
he
resu
lts a
re s
hare
d di
rect
ly w
ith s
enio
r m
anag
ers
who
use
the
feed
back
to m
ake
chan
ges
to im
prov
e th
e ov
eral
l clie
nt e
xper
ienc
e. W
e re
cent
ly m
ade
the
follo
win
g ch
ange
s ba
sed
on c
lient
feed
back
:
info
rmat
ion
on th
e st
atus
of w
ire tr
ansf
ers
acce
ss to
mon
itor
syst
em p
erfo
rman
ce, i
nclu
ding
pl
anne
d sy
stem
out
ages
that
we
are
trea
ting
clie
nts
the
righ
t way
and
with
pr
ofes
sion
alis
m. A
s a
resu
lt, w
e ha
ve s
een
sign
ifica
nt
impr
ovem
ents
in o
ur c
lient
sat
isfa
ctio
n sc
ores
dur
ing
the
last
two
year
s
Impr
ovin
g th
e cl
ient
exp
erie
nce
thro
ugh
tech
nolo
gy a
nd tr
aini
ng
We
have
add
ed m
ore
than
1,5
00 e
mpl
oyee
s ac
ross
th
e bu
sine
ss o
ver
the
past
thre
e ye
ars
and
inve
sted
hu
ndre
ds o
f mill
ions
of d
olla
rs in
tech
nolo
gy to
impr
ove
our
clie
nts’
exp
erie
nce.
We
also
hav
e cr
eate
d ne
w
supp
ort t
eam
s to
allo
w b
anke
rs a
nd c
lient
ser
vice
pr
ofes
sion
als
to s
pend
mor
e di
rect
tim
e w
ith c
lient
s. F
or
exam
ple,
ove
r th
e pa
st s
ever
al y
ears
, we
have
:
expe
rien
ce w
hen
impl
emen
ting
a ne
w p
rodu
ct o
r se
rvic
e
proc
essi
ng, u
nder
wri
ting,
clo
sing
and
doc
umen
tatio
n sy
stem
that
sup
port
s ou
r in
dust
ry-le
adin
g m
ulti-
fam
ily le
ndin
g bu
sine
ss
-m
enta
tion
we
ask
of o
ur c
lient
s th
at h
ave
rela
tion-
ship
s w
ith m
ultip
le li
nes
of b
usin
ess
com
mun
icat
ions
mat
eria
ls to
be
clea
rer
and
sim
pler
supp
ort o
ur c
lient
s’ c
ompl
ex im
plem
enta
tions
our
onbo
ardi
ng p
roce
ss, e
spec
ially
giv
en th
e si
gnifi
-ca
nt in
crea
se in
requ
ired
due
dilig
ence
to im
prov
e ou
r em
ploy
ees’
aw
aren
ess
and
unde
r-st
andi
ng o
f the
ris
k an
d co
ntro
l env
ironm
ent,
as w
ell
as th
e im
port
ance
of p
rote
ctin
g cl
ient
info
rmat
ion
COM
MER
CIA
L BA
NKI
NG
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T70 A
SSET
MA
NA
GEM
ENT
Man
agin
g m
oney
for
clie
nts
is th
e co
re o
f the
Ass
et
Man
agem
ent b
usin
ess.
In a
dditi
on to
del
iver
ing
stro
ng in
vest
men
t per
form
ance
, we
reco
gniz
e th
at
effec
tive
mon
ey m
anag
emen
t req
uire
s a
focu
s on
clie
nt
educ
atio
n, a
s w
ell a
s sp
ecia
lized
exp
ertis
e an
d so
lutio
ns
in th
e ar
eas
that
are
mos
t im
port
ant t
o ou
r cl
ient
s.
Educ
atin
g cl
ient
s an
d sh
arin
g ou
r in
sigh
ts
A ke
y pa
rt o
f our
adv
isor
s’ jo
bs is
kee
ping
clie
nts
wel
l-inf
orm
ed —
whe
ther
they
are
indi
vidu
als,
inst
itu-
tions
or
finan
cial
adv
isor
s. O
ur a
dvis
ors
star
t eac
h w
eek
with
a M
onda
y m
orni
ng m
eetin
g to
dis
cuss
wor
ldw
ide
even
ts in
mar
kets
, eco
nom
ies
and
gove
rnm
ents
and
the
resu
lting
impl
icat
ions
for
clie
nts
and
thei
r po
rtfo
lios.
One
of A
sset
Man
agem
ent’s
lead
ing
educ
atio
nal p
ubli-
catio
ns is
Eye
on
the
Mar
ket,
whi
ch fe
atur
es in
sigh
ts
and
com
men
tary
from
Ass
et M
anag
emen
t’s C
hair
man
of
Mar
ket &
Inve
stm
ent S
trat
egy
on n
ews
and
tren
ds
shap
ing
the
mar
kets
and
eco
nom
y. In
itial
ly c
reat
ed
for
priv
ate
clie
nts,
dur
ing
the
past
thre
e ye
ars
we
deve
lope
d a
vers
ion
cust
omiz
ed fo
r in
stitu
tiona
l clie
nts
as w
ell.
Toda
y, a
ppro
xim
atel
y 55
,000
clie
nts
and
pros
pect
ive
clie
nts
acro
ss o
ur In
vest
men
t and
Glo
bal
Wea
lth M
anag
emen
t bus
ines
ses
rece
ive
each
edi
tion
of
Eye
on th
e M
arke
t.
In a
dditi
on, w
e de
velo
ped
a M
arke
t Ins
ight
s pr
ogra
m
to k
eep
our
finan
cial
inte
rmed
iary
clie
nts
— a
nd th
eir
clie
nts
— in
form
ed a
bout
mar
ket d
evel
opm
ents
(e.g
., th
roug
h th
e G
uide
to th
e M
arke
ts p
ublic
atio
n). W
e ha
ve
wor
ked
to ta
ilor
our
insi
ghts
to d
iffer
ent r
egio
ns a
nd
clie
nt s
egm
ents
, with
the
goal
of h
elpi
ng a
ll ou
r cl
ient
s be
tter
und
erst
and
mar
kets
and
inve
stin
g —
opp
ortu
ni-
ties
and
risk
s —
in o
rder
to h
elp
clie
nts
achi
eve
the
best
po
ssib
le o
utco
mes
.
The
prog
ram
’s G
uide
to th
e M
arke
ts p
ublic
atio
n, w
hich
be
gan
in th
e U
nite
d St
ates
a d
ecad
e ag
o an
d w
as
issu
ed q
uart
erly
, exp
ande
d ov
er th
e la
st tw
o ye
ars
to A
sia,
Eur
ope
and
Latin
Am
eric
a an
d no
w is
bei
ng
upda
ted
mon
thly
.
Plan
ning
for
impo
rtan
t life
eve
nts
One
of t
he p
rim
ary
life
even
ts in
vest
ors
save
for
is
retir
emen
t. In
fact
, ret
irem
ent i
s th
e #1
sav
ings
and
in
vest
ing
goal
of A
mer
ican
s. In
Ass
et M
anag
emen
t, w
e ar
e de
dica
ted
to p
artn
erin
g w
ith p
lan
spon
sors
, ad
viso
rs a
nd in
divi
dual
s to
hel
p th
em fo
cus
on
impr
ovin
g re
tirem
ent o
utco
mes
. To
this
end
, we
leve
rage
the
best
thin
king
acr
oss
the
com
pany
to
info
rm th
e de
velo
pmen
t of i
nsig
hts,
sol
utio
ns a
nd to
ols
that
we
shar
e w
ith c
lient
s:
80
% o
f all
our
asse
ts w
ere
in th
e fi
rst o
r se
cond
ASS
ET M
AN
AGEM
ENT
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T71
Gui
de to
Ret
irem
ent i
s an
edu
catio
nal p
rogr
am
crea
ted
in 2
009
to h
elp
finan
cial
adv
isor
s si
mpl
ify
the
retir
emen
t pla
nnin
g co
nver
satio
ns th
ey h
ave
with
clie
nts.
It fo
cuse
s on
thre
e ke
y re
tirem
ent
plan
ning
topi
cs —
sav
ing,
spe
ndin
g an
d in
vest
ing
—
with
con
cept
s ill
ustr
ated
by
colo
rful
, eas
y-to
- un
ders
tand
cha
rts
and
grap
hs. T
his
year
, we
di
stri
bute
d ov
er 5
0,00
0 pr
inte
d bo
oks
thro
ugh
m
ore
than
12,
000
finan
cial
adv
isor
s. W
e co
ntin
u-al
ly h
ave
enha
nced
the
prog
ram
ove
r th
e ye
ars,
de
epen
ing
cont
ent,
deve
lopi
ng d
iscu
ssio
n gu
ides
for
advi
sors
to u
se w
ith c
lient
s, c
reat
ing
a di
gita
l int
er-
activ
e ve
rsio
n, a
ddin
g qu
arte
rly
clie
nt w
ebca
sts
and,
m
ore
rece
ntly
, offe
ring
an
iPad
app
ver
sion
.
deve
lope
d a
glid
e pa
th in
corp
orat
ing
exte
nsiv
e re
sear
ch fr
om a
ctua
l par
ticip
ant b
ehav
ior.
One
of
our m
ajor
initi
ativ
es la
st y
ear f
ocus
ed o
n he
lpin
g th
e m
arke
tpla
ce b
ette
r und
erst
and
the
role
of t
arge
t dat
e fu
nds
with
in re
tirem
ent p
lans
and
how
we
man
age
risk
alon
g th
e ta
rget
dat
e gl
ide
path
. In
addi
tion,
we
have
take
n th
is m
odel
ove
rsea
s an
d ex
pand
ed in
to th
e Un
ited
King
dom
to m
eet c
lient
dem
and.
use
a st
anda
rdiz
ed, s
yste
mat
ic p
roce
ss fo
r ev
alu-
atin
g an
d se
lect
ing
targ
et d
ate
fund
s fo
r a
retir
e-m
ent p
lan’
s in
vest
men
t lin
eup.
Sin
ce it
s la
unch
in
2009
, the
tool
has
bee
n us
ed b
y pl
an s
pons
ors
and
finan
cial
adv
isor
s to
mak
e in
form
ed in
vest
men
t de
cisi
ons
and
help
sat
isfy
thei
r fid
ucia
ry re
spon
si-
bilit
ies.
Ear
lier
this
yea
r, w
e la
unch
ed v
ersi
on 2
.0,
feat
urin
g en
hanc
ed fu
nctio
nalit
y an
d an
alyt
ics
and
enab
ling
thou
sand
s of
our
clie
nts
to g
ener
ate
mor
e th
an 5
,500
repo
rts.
Exte
ndin
g cr
edit
to s
uppo
rt c
lient
s
We
reco
gniz
e th
at, f
or m
any
clie
nts,
lend
ing
solu
tions
ar
e ju
st a
s im
port
ant a
s in
vest
men
t ide
as. C
redi
t can
he
lp a
fam
ily p
urch
ase
a ne
w h
ome
or a
n en
trep
rene
ur
inve
st in
a b
usin
ess
vent
ure,
whi
ch, i
n tu
rn, s
uppo
rts
the
loca
l eco
nom
y. O
ver t
he p
ast s
ever
al y
ears
, Ass
et
Man
agem
ent’s
Glo
bal W
ealth
Man
agem
ent b
usin
ess
has
rene
wed
its
focu
s on
adv
isin
g cl
ient
s on
bot
h si
des
of
thei
r bal
ance
she
ets
to p
rovi
de m
ore
com
plet
e so
lutio
ns:
sit s
ide
by s
ide
with
our
ban
kers
and
inve
stor
s to
ad
vise
clie
nts
on u
sing
cre
dit e
ffect
ivel
y. A
dvic
e ha
s ev
olve
d to
incl
ude
area
s of
par
ticul
ar im
port
ance
in
a lo
w-r
ate
envi
ronm
ent,
such
as
miti
gatin
g in
tere
st
rate
ris
k an
d ri
ght-
sizi
ng le
vera
ge u
se.
time
it ta
kes
to g
o fr
om c
ompl
etin
g an
app
licat
ion
to b
eing
cle
ared
to c
lose
by
15%
(thr
ough
Oct
ober
20
14).
We
also
hav
e ex
pand
ed o
ur m
enu
of in
vest
-m
ent p
rope
rty
mor
tgag
e off
erin
gs to
all
amor
tizin
g pr
oduc
ts, m
ade
them
ava
ilabl
e in
all
U.S
. sta
tes
and
sim
plifi
ed th
eir
pric
ing
stru
ctur
e.
to s
peci
fic m
arke
t dem
ands
, inc
ludi
ng le
ndin
g on
shor
e in
Bra
zil a
nd in
the
Asia
and
U.K
. hig
h-
net-
wor
th s
egm
ents
.
the
intr
oduc
tion
of a
Glo
bal L
endi
ng V
alue
Eng
ine
that
use
s m
arke
t dat
a to
gen
erat
e le
ndin
g va
lues
fo
r eq
uity
, fixe
d in
com
e, m
utua
l fun
ds a
nd s
truc
-tu
red
prod
ucts
.
ASS
ET M
AN
AGEM
ENT
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T72 St
reng
then
ing
the
fiduc
iary
fram
ewor
k
In A
sset
Man
agem
ent,
we
act a
s a
fiduc
iary
in a
num
ber
of w
ays:
as
a tr
uste
e fo
r in
divi
dual
s an
d fa
mili
es, a
s a
disc
retio
nary
inve
stm
ent a
dvis
or fo
r in
divi
dual
s, a
s an
in
vest
men
t adv
isor
to m
utua
l fun
ds a
nd a
s a
trus
tee
of c
omm
ingl
ed fu
nds.
Tha
t com
es w
ith a
resp
onsi
bilit
y to
trea
t clie
nts
fair
ly, m
anag
e co
nflic
ts o
f int
eres
t, ac
t pr
uden
tly a
nd p
rovi
de tr
ansp
aren
cy in
our
dis
clos
ures
.
To s
hare
a fe
w e
xam
ples
of h
ow w
e’ve
str
engt
hene
d ou
r co
mm
itmen
t to
thes
e re
spon
sibi
litie
s, w
e ha
ve:
our
trus
ts a
nd e
stat
es b
usin
ess,
who
hav
e sp
ecifi
c fid
ucia
ry e
xper
tise
and
expe
rien
ce
prov
ide
incr
ease
d ch
ecks
and
bal
ance
s
as a
ppro
pria
te
Give
n th
e fid
ucia
ry n
atur
e of
man
y of
its
busi
ness
es,
Asse
t Man
agem
ent h
as p
laye
d a
lead
role
in s
tren
gth-
enin
g th
e co
mpa
ny’s
fiduc
iary
fram
ewor
k. T
hese
effo
rts
incl
ude
broa
deni
ng th
e sc
ope
of h
ow w
e lo
ok a
t fidu
ciar
y ac
tiviti
es a
cros
s th
e co
mpa
ny a
nd e
stab
lishi
ng m
ore
cons
iste
nt g
over
nanc
e st
anda
rds
for o
ur b
usin
esse
s.
Spec
ifica
lly, i
n De
cem
ber
2013
, the
com
pany
cre
ated
a
Firm
wid
e Fi
duci
ary
Risk
Com
mitt
ee th
at p
rovi
des
a fo
rum
for
disc
ussi
ng is
sues
, ris
ks a
nd d
evel
opm
ents
re
late
d to
fidu
ciar
y ac
tiviti
es. T
he c
omm
ittee
pro
vide
s a
foru
m fo
r ri
sk m
atte
rs re
late
d to
the
com
pany
’s fid
ucia
ry a
ctiv
ities
and
ove
rsee
s th
e fir
mw
ide
fiduc
iary
ri
sk g
over
nanc
e fr
amew
ork,
whi
ch s
uppo
rts
the
cons
is-
tent
iden
tifica
tion
and
esca
latio
n of
fidu
ciar
y ri
sk
mat
ters
by
the
rele
vant
line
s of
bus
ines
s or
cor
pora
te
func
tions
resp
onsi
ble
for
man
agin
g fid
ucia
ry a
ctiv
i-tie
s. T
he c
omm
ittee
esc
alat
es s
igni
fican
t iss
ues
to th
e Fi
rmw
ide
Risk
Com
mitt
ee, t
he B
oard
of D
irect
ors’
Ris
k Po
licy
Com
mitt
ee a
nd A
udit
Com
mitt
ee, a
nd a
ny o
ther
co
mm
ittee
con
side
red
appr
opri
ate.
ASS
ET M
AN
AGEM
ENT
V. O
UR
REL
ATIO
NSH
IPS
WIT
H R
EGU
LATO
RS,
SH
AR
EHO
LDER
S A
ND
CO
MM
UN
ITIE
S
HO
W W
E D
O B
USI
NES
S —
OU
R C
UST
OM
ER C
OM
MIT
MEN
T74
HO
W W
E D
O B
USI
NES
S —
OU
R R
ELAT
ION
SHIP
S W
ITH
REG
ULA
TOR
S, S
HA
REH
OLD
ERS
AN
D C
OM
MU
NIT
IES
75
The
serv
ice
we
prov
ide
our
cust
omer
s is
onl
y pa
rt o
f the
va
lue
our
com
pany
see
ks to
cre
ate.
As
a gl
obal
fina
ncia
l in
stitu
tion,
we
have
the
oppo
rtun
ity a
nd o
blig
atio
n to
co
ntri
bute
to a
wel
l-fun
ctio
ning
glo
bal fi
nanc
ial s
yste
m,
deliv
er a
fair
retu
rn to
our
sha
reho
lder
s, a
nd m
ake
a po
sitiv
e co
ntri
butio
n to
the
peop
le a
nd in
stitu
tions
that
ar
e aff
ecte
d by
our
bus
ines
ses.
Mak
ing
thes
e co
ntri
butio
ns re
quire
s de
ep a
nd s
usta
ined
en
gage
men
t with
man
y pa
rtie
s, p
artic
ular
ly o
ur re
gu-
lato
rs, s
hare
hold
ers
and
nonp
rofit
par
tner
s. O
ver
the
past
sev
eral
yea
rs, w
e ha
ve b
een
dilig
ently
wor
king
to
enh
ance
our
rela
tions
hips
with
thes
e pa
rtie
s. T
his
sect
ion
desc
ribe
s so
me
of th
e ac
tions
we
have
take
n.
REG
ULA
TOR
S
We
are
com
mitt
ed to
bei
ng tr
ansp
aren
t and
resp
on-
sive
in o
ur e
xten
sive
inte
ract
ions
with
our
regu
lato
rs.
That
mea
ns c
onsi
sten
tly p
rovi
ding
them
with
com
plet
e,
accu
rate
and
tim
ely
info
rmat
ion
and
mai
ntai
ning
an
open
, ong
oing
dia
logu
e.
We
seek
to a
chie
ve th
is g
oal i
n th
ree
way
s:
as d
emon
stra
ted
by o
ur c
ontr
ol a
gend
a
with
our
regu
lato
rs
-tio
ns w
ith re
gula
tors
acr
oss
the
ente
rpri
se
A re
gula
tory
min
dset
Satis
fyin
g th
e le
tter
and
spi
rit o
f the
law
requ
ires
that
w
e un
ders
tand
all
lega
l and
regu
lato
ry re
quire
men
ts
and
have
a c
ultu
re a
nd in
fras
truc
ture
that
em
phas
izes
co
mpl
ianc
e an
d is
sue
esca
latio
n an
d re
med
iatio
n. T
his
unde
rpin
s th
e eff
orts
des
crib
ed th
roug
hout
this
repo
rt
to ta
ke p
roac
tive
step
s to
mee
t or
exce
ed o
ur re
gula
-to
rs’ e
xpec
tatio
ns.
Our
line
s of
bus
ines
s ar
e th
e fir
st li
ne o
f def
ense
. By
mak
ing
effec
tive
cont
rols
an
inte
gral
par
t of o
ur ro
utin
e bu
sine
ss p
ract
ices
and
then
als
o ha
ving
effe
ctiv
e ch
ecks
an
d ba
lanc
es in
pla
ce, w
e ca
n ad
dres
s m
any
issu
es
befo
re th
ey b
ecom
e la
rger
pro
blem
s. W
e al
so c
an
enga
ge re
gula
tors
in c
onst
ruct
ive
dial
ogue
as
we
desi
gn
appr
opri
ate
adju
stm
ents
and
rem
edia
tion
plan
s.
Our
regu
lato
ry m
inds
et in
clud
es th
e fo
llow
ing
guid
ing
prin
cipl
es:
-en
cy w
ith o
ur re
gula
tors
to e
nabl
e us
to h
ave
the
prop
er d
ata
capa
bilit
ies
to
proa
ctiv
ely
iden
tify
prob
lem
s in
the
earl
y st
ages
REG
ULA
TOR
S
OU
R R
ELAT
ION
SHIP
S W
ITH
R
EGU
LATO
RS,
SH
AR
EHO
LDER
S A
ND
CO
MM
UN
ITIE
S
HO
W W
E D
O B
USI
NES
S —
OU
R R
ELAT
ION
SHIP
S W
ITH
REG
ULA
TOR
S, S
HA
REH
OLD
ERS
AN
D C
OM
MU
NIT
IES
76
proc
esse
s, p
olic
ies
and
proc
edur
es s
o th
at th
ey
resu
lt in
bus
ines
ses
that
fully
com
ply
with
the
spir
it an
d le
tter
of r
egul
ator
y re
quire
men
ts, i
n lin
e w
ith
our
own
and
our
regu
lato
rs’ e
xpec
tatio
ns
regu
lato
rs in
add
ress
ing
thes
e is
sues
com
plex
ity
that
com
plia
nce
with
our
regu
lato
rs’ r
eque
sts
and
requ
irem
ents
is o
ur p
rior
ity
The
Ope
ratin
g Co
mm
ittee
regu
larl
y re
info
rces
our
regu
-la
tory
min
dset
to o
ur e
mpl
oyee
s. A
rece
nt m
emo
to a
ll em
ploy
ees,
sig
ned
by e
very
mem
ber
of th
e O
pera
ting
Com
mitt
ee, s
et fo
rth
the
com
pany
‘s e
xpec
tatio
ns
arou
nd re
gula
tory
eng
agem
ent,
incl
udin
g th
e fo
llow
ing:
upon
eac
h of
us
to re
spon
d in
a ti
mel
y fa
shio
n an
d to
fo
llow
est
ablis
hed
prot
ocol
s.”
we
mus
t ens
ure
the
info
rmat
ion
we’
re p
rovi
ding
is
accu
rate
. Thi
s m
eans
che
ckin
g —
and
rech
ecki
ng —
re
port
s be
fore
sen
ding
. […
] If w
e ar
e un
clea
r ab
out
a re
ques
t, or
feel
ther
e m
ay b
e ad
ditio
nal o
r al
ter-
nativ
e in
form
atio
n w
hich
may
be
pert
inen
t to
wha
t th
e re
gula
tor
is a
skin
g fo
r, w
e sh
ould
eng
age
our
regu
lato
rs in
a d
iscu
ssio
n to
add
ress
[the
requ
est]
proa
ctiv
ely.
”
reso
urce
s to
bea
r on
sol
ving
them
, inc
ludi
ng
enga
ging
our
regu
lato
rs a
s ap
prop
riat
e.”
prob
lem
. [...
] And
if th
e pr
oble
m m
ight
be
an is
sue
in
anot
her
line
of b
usin
ess,
mak
e su
re th
e ri
ght p
eopl
e ar
e in
form
ed.”
Lead
ersh
ip e
ngag
emen
t
Our
sen
ior
lead
ers
com
mitt
ed a
n ev
en m
ore
sign
ifica
nt
amou
nt o
f the
ir ti
me
to m
eetin
g w
ith o
ur re
gula
tors
in
201
3 an
d 20
14. S
uch
freq
uent
inte
ract
ion
help
s us
he
ar fi
rsth
and
wha
t reg
ulat
ors
are
focu
sed
on a
nd g
ives
us
a fo
rum
for
keep
ing
them
wel
l-inf
orm
ed o
n w
hat i
s ha
ppen
ing
in o
ur b
usin
esse
s. W
e di
scus
s ke
y re
gula
tory
m
atte
rs a
nd b
usin
ess
upda
tes
in a
num
ber
of fo
rum
s:
Boar
d of
Dir
ecto
rs e
ngag
emen
t. O
ur p
rim
ary
U.S.
re
gula
tors
mee
t with
var
ious
Boa
rd c
omm
ittee
s,
regu
larl
y re
ceiv
e m
eetin
g m
ater
ials
and
min
utes
, an
d m
eet w
ith in
divi
dual
Boa
rd m
embe
rs to
di
scus
s re
gula
tors
’ exp
ecta
tions
on
effec
tive
Boar
d ov
ersi
ght.
Duri
ng 2
013-
2014
, our
inde
pend
ent B
oard
m
embe
rs m
et w
ith o
ur p
rim
ary
U.S.
regu
lato
rs, t
he
Boar
d of
Gov
erno
rs o
f the
Fed
eral
Res
erve
Sys
tem
(t
he F
eder
al R
eser
ve),
the
Offi
ce o
f the
Com
ptro
ller
of th
e Cu
rren
cy (O
CC) a
nd th
e Fe
dera
l Dep
osit
Insu
ranc
e Co
rpor
atio
n (F
DIC)
, as
wel
l as
the
U.S.
Se
curi
ties
and
Exch
ange
Com
mis
sion
(SEC
) and
th
e Co
nsum
er F
inan
cial
Pro
tect
ion
Bure
au (C
FPB)
. Ce
rtai
n Bo
ard
mem
bers
als
o m
et w
ith in
tern
atio
nal
regu
lato
rs, i
nclu
ding
the
Prud
entia
l Reg
ulat
ion
Auth
ority
(PRA
) and
the
Fina
ncia
l Con
duct
Aut
hori
ty
(FCA
) in
the
Unite
d Ki
ngdo
m; t
he F
eder
al F
inan
cial
Su
perv
isor
y Au
thor
ity in
Ger
man
y; th
e H
ong
Kong
M
onet
ary
Auth
ority
(HKM
A); t
he C
hina
Ban
king
Re
gula
tory
Com
mis
sion
in B
eijin
g; a
nd th
e M
onet
ary
Auth
ority
of S
inga
pore
(MAS
).
REG
ULA
TOR
S
HO
W W
E D
O B
USI
NES
S —
OU
R R
ELAT
ION
SHIP
S W
ITH
REG
ULA
TOR
S, S
HA
REH
OLD
ERS
AN
D C
OM
MU
NIT
IES
77
Chai
rman
and
CEO
eng
agem
ent.
Our
Cha
irm
an a
nd
CEO
hol
ds a
mon
thly
mee
ting
with
sen
ior
exam
iner
s fr
om th
e O
CC, t
he F
eder
al R
eser
ve a
nd th
e FD
IC a
nd
also
mee
ts fr
eque
ntly
with
the
CFPB
, am
ong
othe
rs.
In 2
013-
2014
, our
Cha
irm
an a
nd C
EO m
et w
ith
regu
lato
rs fr
om a
ll re
gion
s in
whi
ch th
e co
mpa
ny
oper
ates
, inc
ludi
ng A
sia
Paci
fic (A
PAC)
, Eur
ope,
M
iddl
e Ea
st a
nd A
fric
a (E
MEA
) and
Lat
in A
mer
ica
(Lat
Am).
Inte
rnat
iona
l reg
ulat
ory
mee
tings
hav
e oc
curr
ed re
gula
rly
sinc
e 20
13, i
nclu
ding
mee
tings
w
ith re
pres
enta
tives
from
the
PRA
and
FCA,
HKM
A,
Euro
pean
Com
mis
sion
, Fre
nch
Trea
sury
, Jap
anes
e M
inis
try
of F
inan
ce a
nd A
ustr
alia
n Tr
easu
ry.
Seni
or m
anag
emen
t eng
agem
ent.
Fro
m th
e be
ginn
ing
of 2
013
thro
ugh
the
thir
d qu
arte
r of
201
4,
mem
bers
of o
ur O
pera
ting
Com
mitt
ee a
nd th
eir
dire
ct re
port
s ha
ve h
ad m
ore
than
1,3
00 m
eetin
gs
with
regu
lato
rs. O
ur li
ne o
f bus
ines
s CE
Os,
Chi
ef
Adm
inis
trat
ive
Offi
cer,
Chie
f Fin
anci
al O
ffice
r, Ch
ief
Risk
Offi
cer
and
Gene
ral C
ouns
el m
eet w
ith d
omes
tic
and
inte
rnat
iona
l reg
ulat
ors,
suc
h as
the
OCC
, Fe
dera
l Res
erve
, FDI
C, P
RA, C
FPB
and
SEC
(am
ong
othe
rs),
ofte
n in
sta
ndin
g m
onth
ly, q
uart
erly
or s
emi-
annu
al m
eetin
gs. F
or e
xam
ple,
our
Chi
ef O
pera
ting
Offi
cer
mee
ts w
ith re
gula
tors
from
the
OCC
, Fed
eral
Re
serv
e an
d FD
IC m
onth
ly to
ens
ure
that
they
hav
e ac
cess
to th
e in
form
atio
n th
ey n
eed.
In a
dditi
on,
in 2
013-
2014
, our
Chi
ef O
pera
ting
Offi
cer
met
with
re
gula
tors
from
the
APAC
, EM
EA a
nd L
atAm
regi
ons.
In
tern
atio
nal r
egul
ator
y m
eetin
gs o
ccur
regu
larl
y am
ong
seni
or m
anag
emen
t, in
clud
ing
mee
tings
with
re
pres
enta
tives
from
the
Japa
nese
Fin
anci
al S
ervi
ces
Agen
cy, H
KMA,
MAS
, PRA
and
U.K
. Tre
asur
y.
Enha
nced
com
mun
icat
ions
Acro
ss th
e en
terp
rise,
our
bus
ines
ses a
nd c
ontr
ol fu
nctio
ns
enga
ge w
ith o
ur re
gula
tors
in m
ultip
le w
ays:
thro
ugh
exam
s and
con
tinuo
us m
onito
ring,
regu
lar m
eetin
gs a
nd
ad h
oc re
ques
ts. W
e sh
are
regu
lar r
epor
ts w
ith re
gula
-to
rs, g
ive
them
acc
ess t
o ou
r sys
tem
s and
our
peo
ple,
and
pr
oact
ivel
y se
ek fe
edba
ck a
s to
whe
ther
or n
ot th
ey a
re
getti
ng th
e rig
ht le
vel a
nd fr
eque
ncy
of in
form
atio
n.
To p
ut th
e le
vel o
f eng
agem
ent w
ith o
ur re
gula
tors
in
cont
ext:
com
mod
ities
regu
lato
rs o
vers
eein
g ou
r bu
sine
ss
glob
ally
.
-vi
dual
exa
min
ers
from
our
pri
mar
y U.
S. re
gula
tors
.
glob
ally
in 2
013.
are
regu
larl
y pr
ovid
ed to
one
or
mor
e of
our
regu
la-
tors
aro
und
the
glob
e.
are
deliv
ered
to th
e O
CC a
nd th
e Fe
dera
l Res
erve
th
roug
h a
dedi
cate
d po
rtal
— in
clud
ing
the
key
repo
rts
we
use
to m
anag
e ou
r bu
sine
sses
.
regu
lato
rs a
roun
d th
e gl
obe.
As d
escr
ibed
abo
ve a
nd in
our
regu
lato
ry fi
lings
, in
rece
nt y
ears
the
com
pany
has
ent
ered
into
sev
eral
re
gula
tory
ord
ers
with
its
bank
ing
regu
lato
rs, a
Def
erre
d Pr
osec
utio
n Ag
reem
ent w
ith th
e U.
S. A
ttor
ney’
s Offi
ce
for t
he S
outh
ern
Dist
rict o
f New
Yor
k an
d se
ttle
men
ts
of e
nfor
cem
ent a
ctio
ns w
ith v
ario
us g
over
nmen
tal
agen
cies
. In
addi
tion,
ong
oing
regu
lato
ry e
xam
inat
ions
ha
ve re
sulte
d in
regu
lato
ry d
irect
ion
to a
ddre
ss is
sues
. W
e ar
e no
t onl
y ob
ligat
ed to
add
ress
suc
h is
sues
but
are
co
mm
itted
to d
oing
so.
The
act
ions
we
have
des
crib
ed in
th
is re
port
are
ste
ps in
that
pro
cess
.
REG
ULA
TOR
SH
OW
WE
DO
BU
SIN
ESS
— O
UR
REL
ATIO
NSH
IPS
WIT
H R
EGU
LATO
RS,
SH
AR
EHO
LDER
S A
ND
CO
MM
UN
ITIE
S78 SH
AR
EHO
LDER
S
Our
sha
reho
lder
s ar
e di
vers
e in
eve
ry re
spec
t — la
rge
and
smal
l; in
stitu
tions
and
indi
vidu
als;
act
ive
trad
ers
and
long
-ter
m h
olde
rs; s
tock
pic
kers
and
inde
xed
inve
stor
s; U
.S. a
nd in
tern
atio
nal.
Som
e of
our
sha
re-
hold
ers
inve
st w
ith a
focu
s on
soc
ial r
espo
nsib
ility
, whi
le
othe
rs a
re c
once
rned
sol
ely
with
inve
stm
ent r
etur
ns. A
s a
com
pany
, it i
s ou
r re
spon
sibi
lity
to a
dher
e to
our
cor
e pr
inci
ples
by
trea
ting
all o
ur s
hare
hold
ers
equa
lly a
nd
bala
ncin
g th
eir
dive
rse
inte
rest
s an
d ex
pect
atio
ns.
Tow
ard
that
end
, ove
r the
pas
t yea
rs, w
e ha
ve fo
cuse
d on
im
prov
ing
our e
ngag
emen
t with
our
sha
reho
lder
s on
a
num
ber o
f fro
nts:
enh
ance
d co
mm
unic
atio
ns, i
mpr
oved
re
spon
sive
ness
to s
hare
hold
er fe
edba
ck, c
lear
er d
iscl
o-su
re d
ocum
ents
and
incr
ease
d sh
areh
olde
r-di
rect
or
enga
gem
ent.
Lead
ersh
ip e
ngag
emen
t
In 2
014,
the
Boar
d en
dors
ed th
e Sh
areh
olde
r-Di
rect
or
Exch
ange
(SDX
) Pro
toco
l as
a gu
ide
for
effec
tive,
m
utua
lly b
enefi
cial
eng
agem
ent b
etw
een
shar
ehol
ders
an
d di
rect
ors.
The
SDX
Pro
toco
l was
cre
ated
by
a gr
oup
of le
adin
g in
depe
nden
t dire
ctor
s al
ong
with
repr
esen
ta-
tives
from
a n
umbe
r of
inst
itutio
nal i
nves
tors
.
Cent
ral t
o th
e SD
X Pr
otoc
ol is
the
belie
f tha
t all
part
ies
mus
t ent
er d
iscu
ssio
ns w
illin
g to
list
en a
nd to
take
ac
tion
in re
spon
se to
val
id c
once
rns
or e
xpla
in w
hy
no a
ctio
n is
bei
ng ta
ken.
The
SDX
Pro
toco
l foc
uses
on
long
-ter
m v
alue
cre
atio
n an
d is
inte
nded
to s
uppl
emen
t ex
istin
g In
vest
or R
elat
ions
effo
rts.
In a
dditi
on, a
fter
eac
h of
our
com
pany
’s qu
arte
rly
earn
ings
cal
ls, w
e pr
ovid
e in
vest
or fe
edba
ck to
the
Boar
d so
it is
aw
are
of to
pics
of p
artic
ular
inte
rest
to
the
com
pany
’s sh
areh
olde
rs, a
long
with
any
sha
reho
lder
re
com
men
datio
ns o
r re
ques
ts.
Enha
nced
com
mun
icat
ions
Enga
gem
ent a
nd tr
ansp
aren
cy w
ith o
ur s
hare
hold
ers
help
the
com
pany
gai
n us
eful
feed
back
to b
ette
r ta
ilor
the
publ
ic in
form
atio
n w
e pr
ovid
e to
add
ress
the
inte
rest
s an
d in
quir
ies
of o
ur s
hare
hold
ers.
We
inte
ract
and
com
mun
icat
e w
ith s
hare
hold
ers
thro
ugh
a nu
mbe
r of
foru
ms,
incl
udin
g ou
r qu
arte
rly
earn
ings
pre
sent
atio
ns, S
EC fi
lings
, Ann
ual R
epor
t and
pr
oxy
stat
emen
t, an
nual
mee
ting,
inve
stor
con
fer-
ence
s an
d w
eb c
omm
unic
atio
ns. I
n 20
13, w
e la
unch
ed
an e
xpan
ded
shar
ehol
der
outr
each
pro
gram
, with
the
goal
of c
over
ing
a w
ider
arr
ay o
f top
ics
with
a b
road
er
grou
p of
sha
reho
lder
s. W
e co
nduc
t a fo
rmal
sha
reho
lder
ou
trea
ch p
rogr
am tw
ice
a ye
ar, w
ith fa
ll m
eetin
gs
focu
sed
on c
orpo
rate
gov
erna
nce
and
spri
ng d
iscu
ssio
ns
focu
sed
on is
sues
rela
ted
to th
e pr
oxy
stat
emen
t. Af
ter
each
of t
hese
out
reac
h pr
ogra
ms,
we
prov
ide
inve
stor
fe
edba
ck to
the
Boar
d. O
ur re
cent
out
reac
h eff
orts
co
nsis
ted
of th
e fo
llow
ing:
mee
tings
and
cal
ls in
201
4, a
n in
crea
se o
f mor
e th
an
50%
from
201
2.
-m
atel
y 40
% o
f our
out
stan
ding
sto
ck d
urin
g th
e fa
ll of
201
4 al
one
com
pare
d w
ith a
ppro
xim
atel
y 20
% in
th
e fa
ll of
201
2.
inve
stor
con
fere
nces
in 2
014,
dou
blin
g pa
rtic
ipat
ion
com
pare
d w
ith 2
012.
-tio
nal i
nves
tor t
rips
to A
sia,
Eur
ope
and
Latin
Am
eric
a.
SHA
REH
OLD
ERS
HO
W W
E D
O B
USI
NES
S —
OU
R R
ELAT
ION
SHIP
S W
ITH
REG
ULA
TOR
S, S
HA
REH
OLD
ERS
AN
D C
OM
MU
NIT
IES
79
Resp
onsi
vene
ss to
sha
reho
lder
fe
edba
ck
Feed
back
is e
ffect
ive
only
if y
ou c
onsi
der
it th
ough
t-fu
lly a
nd s
erio
usly
and
are
will
ing
to a
ct o
n it
if ap
pro-
pria
te. M
any
of th
e st
eps
we
have
take
n to
impr
ove
our
gove
rnan
ce a
nd c
ontr
ols
that
hav
e be
en d
iscu
ssed
ea
rlie
r in
this
rep
ort a
re c
onsi
sten
t with
sha
reho
lder
in
put.
For
exam
ple,
in r
espo
nse
to s
hare
hold
er
feed
back
, the
Boa
rd:
-m
ent a
nd th
e fin
anci
al s
ervi
ces
indu
stry
Prin
cipl
es to
cod
ify th
e in
depe
nden
ce o
f our
Bo
ard’
s le
ader
ship
Shar
ehol
der
feed
back
als
o ha
s le
d us
to c
reat
e m
ore
oppo
rtun
ities
for
a br
oade
r sh
areh
olde
r ba
se to
inte
ract
w
ith o
ur s
enio
r m
anag
emen
t. At
the
com
pany
’s 20
14
inve
stor
con
fere
nces
, in
addi
tion
to h
eari
ng fr
om th
e co
mpa
ny’s
CEO,
sha
reho
lder
s he
ard
busi
ness
upd
ates
fr
om th
e CE
Os
of C
onsu
mer
& C
omm
unity
Ban
king
, the
Co
rpor
ate
& In
vest
men
t Ban
k, C
omm
erci
al B
anki
ng
and
Asse
t Man
agem
ent,
the
Chie
f Fin
anci
al O
ffice
r of
Co
nsum
er &
Com
mun
ity B
anki
ng a
nd th
e co
mpa
ny’s
Chie
f Inf
orm
atio
n O
ffice
r. An
d, a
s no
ted
in th
e in
trod
uc-
tion,
this
repo
rt is
itse
lf a
resp
onse
to fe
edba
ck fr
om
one
of o
ur v
alue
d sh
areh
olde
r gr
oups
.
All t
hese
cha
nges
refle
ct o
ur c
omm
itmen
t to
taki
ng
seri
ousl
y th
e fe
edba
ck w
e re
ceiv
e. T
he m
ost r
ecen
t fe
edba
ck fr
om o
ur s
hare
hold
ers
tells
us
that
we
are
mov
ing
in th
e ri
ght d
irect
ion.
In a
sur
vey
of In
vest
or D
ay
atte
ndee
s, n
earl
y 90
% o
f par
ticip
ants
repo
rted
that
th
ey fo
und
Inve
stor
Day
eith
er “
valu
able
” or
“ex
trem
ely
valu
able
.” M
ore
than
hal
f of t
he s
urve
y pa
rtic
ipan
ts
indi
cate
d th
at th
e ev
ent c
hang
ed th
eir
perc
eptio
n of
the
com
pany
’s fu
ture
pro
spec
ts fo
r th
e be
tter
.
Expa
nded
acc
essi
bilit
y of
sha
reho
lder
di
sclo
sure
s
One
are
a in
whi
ch w
e ha
ve w
orke
d ha
rd to
impr
ove
is
mak
ing
our
publ
ic d
ocum
ents
mor
e us
er fr
iend
ly, e
asie
r to
und
erst
and
and
mor
e ac
cess
ible
to th
e co
mpa
ny’s
entir
e ra
nge
of s
hare
hold
ers.
We
have
foun
d th
at
seem
ingl
y m
inor
cha
nges
, suc
h as
pre
sent
ing
info
r-m
atio
n in
a g
raph
ic ra
ther
than
in a
pur
ely
text
ual
form
at, h
ave
a m
ajor
impa
ct o
n ou
r sh
areh
olde
rs’
abili
ty to
effe
ctiv
ely
use
the
info
rmat
ion
we
prov
ide.
Fo
r ex
ampl
e, w
e m
odifi
ed th
e st
ruct
ure
and
cont
ent
of o
ur p
roxy
sta
tem
ent i
n 20
14 to
sim
plify
it a
nd m
ore
clea
rly
pres
ent t
he is
sues
, act
ions
bei
ng c
alle
d fo
r an
d av
aila
ble
optio
ns. O
ne s
uch
mod
ifica
tion
invo
lved
ad
ding
a C
ompe
nsat
ion
Disc
losu
re &
Ana
lysi
s Ro
ad M
ap
to th
e co
mpe
nsat
ion
disc
ussi
on to
ass
ist s
hare
hold
ers
in
unde
rsta
ndin
g an
d as
sess
ing
the
alig
nmen
t bet
wee
n ou
r co
mpa
ny’s
perf
orm
ance
and
our
pay
pra
ctic
es.
SHA
REH
OLD
ERS
HO
W W
E D
O B
USI
NES
S —
OU
R R
ELAT
ION
SHIP
S W
ITH
REG
ULA
TOR
S, S
HA
REH
OLD
ERS
AN
D C
OM
MU
NIT
IES
80 COM
MU
NIT
IES
We
belie
ve o
ur c
ompa
ny h
as a
resp
onsi
bilit
y to
be
part
of
the
solu
tion
to th
e m
ost p
ress
ing
econ
omic
, env
i-ro
nmen
tal a
nd s
ocia
l cha
lleng
es —
not
onl
y be
caus
e it
is th
e ri
ght t
hing
to d
o bu
t bec
ause
our
ow
n lo
ng-t
erm
su
cces
s de
pend
s on
the
succ
ess
of o
ur c
omm
uniti
es
and
the
peop
le, c
ompa
nies
and
inst
itutio
ns w
e se
rve.
W
e ca
n he
lp m
ake
a di
ffere
nce
by le
vera
ging
the
skill
s,
tech
nolo
gy, d
ata
and
expe
rtis
e w
e us
e to
dri
ve o
ur o
wn
busi
ness
to m
eet t
hese
glo
bal c
halle
nges
. But
we
know
w
e ar
e on
ly o
ne p
art o
f the
sol
utio
n. T
he c
halle
nges
are
co
mpl
ex, a
nd fi
ndin
g so
lutio
ns re
quire
s ta
ppin
g in
to th
e ex
pert
ise
of in
divi
dual
s an
d or
gani
zatio
ns w
ith a
rang
e of
diff
eren
t per
spec
tives
, ski
lls a
nd c
apab
ilitie
s. S
tron
g pa
rtne
rshi
ps a
nd ro
bust
eng
agem
ent a
mon
g th
e pu
blic
, pr
ivat
e an
d no
npro
fit s
ecto
rs a
re e
ssen
tial.
Core
to o
ur a
ppro
ach
is o
ur w
ork
with
civ
ic a
nd
nonp
rofit
lead
ers
who
hav
e a
deep
his
tory
in a
nd
know
ledg
e of
thei
r co
mm
uniti
es, a
s w
ell a
s w
ith g
roup
s th
at h
ave
subs
tant
ive
expe
rtis
e on
a ra
nge
of e
cono
mic
, en
viro
nmen
tal a
nd s
ocia
l iss
ues.
The
se p
artn
ersh
ips
stre
ngth
en o
ur re
latio
nshi
ps w
ith o
ur c
omm
uniti
es a
nd
mak
e ou
r co
mpa
ny s
tron
ger
and
bett
er in
form
ed. T
hey
also
hel
p us
dev
elop
pro
duct
s, s
ervi
ces
and
polic
ies
that
ar
e re
spon
sive
to th
e ne
eds
of o
ur c
omm
uniti
es. W
e ne
ed to
bot
h un
ders
tand
our
com
mun
ities
’ per
spec
tives
an
d cl
earl
y co
mm
unic
ate
with
them
abo
ut o
ur s
trat
egy,
pr
actic
es a
nd p
erfo
rman
ce.
Our
com
pany
wor
ks to
str
engt
hen
our
com
mun
ities
th
roug
h ou
r co
re le
ndin
g ac
tiviti
es, a
s w
ell a
s th
roug
h un
ique
initi
ativ
es th
at w
e ha
ve d
esig
ned
to m
eet t
he
cent
ral e
cono
mic
cha
lleng
es o
f our
com
mun
ities
, fro
m
prep
arin
g a
wor
kfor
ce to
thri
ve in
the
glob
al e
cono
my
to
expa
ndin
g pr
ivat
e ca
pita
l inv
estm
ent i
n co
nser
vatio
n.
Grow
ing
smal
l bus
ines
ses
Whe
n w
e he
lp o
ur c
lient
s su
ccee
d, th
ey, i
n tu
rn,
gene
rate
the
jobs
, sm
all b
usin
ess
grow
th a
nd o
ther
ec
onom
ic a
ctiv
ity u
pon
whi
ch o
ur e
cono
my
depe
nds.
W
hile
we
are
com
mitt
ed to
ser
ving
all
our
busi
ness
cl
ient
s, o
ne a
rea
of p
artic
ular
focu
s is
the
wor
k w
e do
to
hel
p sm
all b
usin
esse
s ac
quire
the
capi
tal,
expe
rtis
e an
d ot
her
reso
urce
s ne
eded
in o
rder
to g
row
. Sm
all
busi
ness
es a
re th
e co
rner
ston
e of
loca
l com
mun
ities
, cr
eatin
g jo
bs a
nd s
purr
ing
inno
vatio
n.
We
also
are
wor
king
to h
elp
bols
ter t
he s
uppo
rt s
yste
ms
that
sm
all b
usin
esse
s ne
ed in
ord
er to
thriv
e. In
201
4, w
e la
unch
ed S
mal
l Bus
ines
s Fo
rwar
d, a
$30
mill
ion,
five
-yea
r gr
ant p
rogr
am to
con
nect
sm
all b
usin
esse
s an
d en
tre-
pren
eurs
with
crit
ical
reso
urce
s to
hel
p th
eir c
ompa
nies
gr
ow, c
reat
e jo
bs a
nd s
tren
gthe
n co
mm
uniti
es. T
hrou
gh
this
initi
ativ
e, o
ur c
ompa
ny is
fund
ing
nonp
rofit
org
aniz
a-tio
ns th
at w
ork
with
sm
all b
usin
esse
s co
ncen
trat
ed in
a
sing
le s
ecto
r — s
uch
as h
ealth
, cle
an te
chno
logy
, int
erac
-tiv
e m
edia
or a
dvan
ced
man
ufac
turin
g —
and
hel
p th
em
acce
ss c
apita
l, m
anag
emen
t tra
inin
g, s
kille
d w
orke
rs,
supp
ly c
hain
s, fa
cilit
ies
and
new
mar
kets
.
We
prov
ided
$19
bill
ion
in n
ew c
redi
t to
U.S
. sm
all
COM
MU
NIT
IES
HO
W W
E D
O B
USI
NES
S —
OU
R R
ELAT
ION
SHIP
S W
ITH
REG
ULA
TOR
S, S
HA
REH
OLD
ERS
AN
D C
OM
MU
NIT
IES
81
Fina
ncin
g go
vern
men
ts a
nd p
rom
otin
g
glob
al c
ompe
titi
vene
ss
The
wor
ld’s
gove
rnm
ents
, cen
tral
ban
ks, s
over
eign
in
vest
ors,
mul
tilat
eral
inst
itutio
ns, p
ublic
pen
sion
fu
nds,
nat
iona
l dev
elop
men
t ban
ks a
nd o
ther
pub
lic
inst
itutio
ns p
lace
thei
r co
nfide
nce
in u
s to
man
age
thei
r fin
anci
al a
sset
s or
liab
ilitie
s, r
aise
cap
ital,
hedg
e fin
anci
al r
isks
, or
capt
ure
effici
enci
es in
mak
ing
paym
ents
or
colle
ctin
g re
venu
e. W
e w
ork
with
mor
e th
an 5
50 p
ublic
sec
tor
entit
ies
in 1
30 c
ount
ries
w
orld
wid
e, h
elpi
ng th
em to
fulfi
ll vi
tal p
ublic
man
date
s ev
ery
day
thro
ugh
the
effec
tive
man
agem
ent o
f the
ir
finan
cial
affa
irs.
In th
e U
nite
d St
ates
, sta
te a
nd lo
cal
gove
rnm
ents
pla
ce th
eir
confi
denc
e in
our
exp
ertis
e on
issu
es r
angi
ng fr
om p
lann
ing
and
deve
lopm
ent t
o ta
x pr
oces
sing
, util
ities
, fina
nce,
pro
cure
men
t, pu
blic
sa
fety
and
dis
aste
r re
lief.
In 2
013,
we
rais
ed c
apita
l an
d pr
ovid
ed c
redi
t tot
alin
g $7
9 bi
llion
for
nonp
rofit
an
d go
vern
men
t ent
ities
, inc
ludi
ng s
tate
s, m
unic
i-pa
litie
s, h
ospi
tals
and
uni
vers
ities
. Thr
ough
the
thir
d qu
arte
r of
201
4, th
is n
umbe
r re
ache
d $5
9 bi
llion
of
cred
it an
d ca
pita
l.
We
also
wor
k to
equ
ip m
etro
polit
an a
nd c
ity le
ader
s w
ith th
e pr
actic
al k
now
ledg
e, p
olic
y id
eas
and
netw
orks
th
at c
an b
e us
ed to
mak
e th
eir r
egio
ns m
ore
com
petit
ive
in th
e gl
obal
mar
ketp
lace
. The
Glo
bal C
ities
Initi
ativ
e,
a jo
int p
roje
ct o
f JPM
orga
n Ch
ase
and
the
Broo
king
s In
stitu
tion,
aim
s to
hel
p m
etro
polit
an a
reas
use
glo
bal
trad
e an
d en
gage
men
t to
grow
thei
r ec
onom
ies
and
crea
te jo
bs.
In 2
013,
in a
n eff
ort t
o tr
ansf
orm
kno
wle
dge
abou
t gl
obal
trad
e an
d in
vest
men
t int
o lo
cal a
ctio
n, th
e Gl
obal
Ci
ties
Initi
ativ
e la
unch
ed th
e Gl
obal
Citi
es E
xcha
nge.
The
ex
chan
ge is
gui
ding
a n
etw
ork
of e
cono
mic
dev
elop
men
t pr
actit
ione
rs in
citi
es a
roun
d th
e w
orld
to d
evel
op a
nd
impl
emen
t act
iona
ble
stra
tegi
es to
enh
ance
glo
bal t
rade
an
d fo
rge
part
ners
hips
am
ong
glob
al m
etro
polit
an a
reas
.
Stre
ngth
enin
g w
orkf
orce
rea
dine
ss a
nd
clos
ing
the
skill
s ga
p
Whi
le u
nem
ploy
men
t rat
es re
mai
n hi
gh in
com
mun
ities
ar
ound
the
wor
ld, m
any
empl
oyer
s ar
e ha
ving
trou
ble
findi
ng w
orke
rs w
ho a
re tr
aine
d fo
r th
e jo
bs th
at a
re
avai
labl
e. T
his
shor
tage
of w
orke
rs w
ith th
e sk
ills
that
em
ploy
ers
are
dem
andi
ng is
due
, in
part
, to
a la
ck o
f al
ignm
ent b
etw
een
wor
kfor
ce tr
aini
ng p
rogr
ams
and
the
need
s of
loca
l em
ploy
ers.
New
Ski
lls a
t Wor
k is
a $
250
mill
ion,
five
-yea
r pr
ogra
m
to in
form
and
acc
eler
ate
effor
ts to
trai
n pe
ople
for
the
skill
ed jo
bs o
f the
21s
t cen
tury
. Thr
ough
New
Ski
lls a
t W
ork,
we
are
cond
uctin
g re
sear
ch a
imed
at i
dent
ifyin
g th
e sk
ills
gaps
that
exi
st in
mar
kets
acr
oss
the
Unite
d St
ates
and
in s
elec
t cou
ntri
es in
Eur
ope.
We
also
are
fu
ndin
g be
st-in
-cla
ss n
onpr
ofit p
rogr
ams
with
dem
on-
stra
ted
succ
ess
in tr
aini
ng w
orke
rs fo
r hi
gh-d
eman
d jo
bs. A
nd w
e ar
e co
nven
ing
lead
ers
from
acr
oss
sect
ors
to d
iscu
ss w
ays
to s
tren
gthe
n w
orkf
orce
read
ines
s sy
stem
s, b
ased
on
the
best
evi
denc
e an
d le
arni
ngs.
Inve
stin
g in
Det
roit
The
city
of D
etro
it fa
ces
seri
ous
chal
leng
es, b
ut th
e se
eds
of a
rem
arka
ble
turn
arou
nd a
re u
nder
way
. Our
co
mpa
ny h
as b
een
doin
g bu
sine
ss in
Det
roit
for
mor
e th
an 8
0 ye
ars,
and
we
are
com
mitt
ed to
the
city
’s ec
onom
ic re
cove
ry. I
n 20
14, w
e m
ade
a $1
00 m
illio
n,
five-
year
com
mitm
ent t
o ac
cele
rate
the
city
’s eff
orts
to
rega
in it
s ec
onom
ic s
tren
gth
with
a c
ompr
ehen
sive
st
rate
gy fo
cuse
d on
revi
taliz
ing
Detr
oit’s
nei
ghbo
r-ho
ods,
inve
stin
g in
the
infr
astr
uctu
re th
at s
uppo
rts
econ
omic
gro
wth
, red
ucin
g bl
ight
, str
engt
heni
ng th
e ci
ty’s
wor
kfor
ce, a
nd g
row
ing
smal
l bus
ines
ses.
This
effo
rt w
as d
evel
oped
bas
ed o
n ex
tens
ive
cons
ulta
-tio
ns w
ith D
etro
it’s
gove
rnm
ent a
nd c
omm
unity
lead
ers
and
prov
ides
not
onl
y lo
ng-t
erm
fina
ncia
l sup
port
but
al
so th
e ex
pert
ise
of o
ur e
mpl
oyee
s in
sup
port
ing
the
orga
niza
tions
that
are
wor
king
to a
ddre
ss th
e ci
ty’s
mos
t pre
ssin
g ch
alle
nges
.
COM
MU
NIT
IES
HO
W W
E D
O B
USI
NES
S —
OU
R R
ELAT
ION
SHIP
S W
ITH
REG
ULA
TOR
S, S
HA
REH
OLD
ERS
AN
D C
OM
MU
NIT
IES
82 Prom
otin
g fin
anci
al c
apab
ility
Acro
ss th
e Un
ited
Stat
es a
nd a
roun
d th
e w
orld
, man
y pe
ople
lack
the
tool
s an
d re
sour
ces
to m
anag
e th
eir d
aily
fin
anci
al li
ves,
whe
ther
for u
nexp
ecte
d em
erge
ncie
s or
to
pla
n fo
r the
futu
re. T
he F
inan
cial
Sol
utio
ns L
ab (t
he
Lab)
, whi
ch w
e he
lped
cre
ate
with
a $
30 m
illio
n gr
ant t
o th
e Ce
nter
for F
inan
cial
Ser
vice
s In
nova
tion,
is d
esig
ned
to u
ncov
er a
nd s
hare
rese
arch
-driv
en in
sigh
ts to
iden
tify
the
mos
t pre
ssin
g fin
anci
al c
halle
nges
face
d by
low
- and
m
oder
ate-
inco
me
cons
umer
s. In
201
5, th
e La
b w
ill la
unch
a
com
petit
ion
for s
ocia
l ent
repr
eneu
rs to
iden
tify
tech
nol-
ogy-
enab
led
inno
vatio
ns th
at h
elp
peop
le in
crea
se sa
ving
s,
impr
ove
cred
it an
d bu
ild a
sset
s. T
he L
ab a
lso
will
pro
vide
se
ed fu
ndin
g fo
r pot
entia
l bre
akth
roug
h to
ols
and
serv
ices
to
hel
p fa
mili
es b
ette
r man
age
hous
ehol
d fin
ance
s.
Adva
ncin
g in
vest
men
t in
cons
erva
tion
Ther
e is
a g
row
ing
need
to m
axim
ize
the
pace
, sca
le a
nd
effec
tiven
ess
of e
ffort
s to
pro
tect
nat
ural
eco
syst
ems
—
alon
g w
ith th
e ci
ties
and
com
mun
ities
that
rely
on
them
. JP
Mor
gan
Chas
e an
d Th
e Na
ture
Con
serv
ancy
des
igne
d Na
ture
Vest
to c
reat
e ne
w o
ppor
tuni
ties
for p
rivat
e se
ctor
inve
stm
ent o
f cap
ital i
n co
nser
vatio
n pr
ojec
ts.
Natu
reVe
st w
ill fo
ster
way
s to
adv
ance
inve
stm
ent i
n co
nser
vatio
n by
con
veni
ng in
vest
ors;
dev
elop
ing
and
exec
utin
g in
nova
tive
finan
cial
tran
sact
ions
; and
bui
ldin
g an
inve
stm
ent p
ipel
ine
acro
ss m
ultip
le s
ecto
rs, i
nclu
ding
ag
ricul
ture
, fish
erie
s an
d en
viro
nmen
tal m
arke
ts.
Enga
ging
em
ploy
ees
to s
tren
gthe
n co
mm
unit
ies
We
have
a tr
emen
dous
opp
ortu
nity
to h
arne
ss o
ur
empl
oyee
s’ p
assi
on fo
r gi
ving
bac
k to
the
com
mun
i-tie
s w
here
they
live
and
wor
k. E
ach
year
, we
stri
ve to
pr
ovid
e ou
r em
ploy
ees
with
mea
ning
ful a
nd n
eede
d vo
lunt
eer
oppo
rtun
ities
that
hel
p th
e no
npro
fits
who
se v
italit
y st
reng
then
s ou
r co
mm
uniti
es. I
n 20
13,
mor
e th
an 4
7,000
em
ploy
ee v
olun
teer
s pr
ovid
ed o
ver
540,
000
hour
s of
vol
unte
er s
ervi
ce a
nd o
rgan
ized
clo
se
to 2
,200
vol
unte
er e
vent
s gl
obal
ly.
We
also
kno
w th
at th
e ex
pert
ise
of o
ur e
mpl
oyee
s ar
ound
the
wor
ld is
our
mos
t val
uabl
e re
sour
ce. T
o he
lp
build
the
capa
city
of o
ur n
onpr
ofit p
artn
ers
and
prov
ide
our
empl
oyee
s w
ith a
bro
ader
men
u of
ser
vice
opp
ortu
-ni
ties
that
dev
elop
lead
ersh
ip s
kills
, we
are
expa
ndin
g ou
r sk
ills-
base
d vo
lunt
eer
prog
ram
s, w
here
we
mat
ch
the
skill
s of
our
peo
ple
with
the
spec
ific
need
s of
loca
l no
npro
fits.
In N
ovem
ber
2014
, we
depl
oyed
a d
ozen
of
our
empl
oyee
s to
wor
k in
Det
roit
full
time
for
seve
ral
wee
ks o
n sp
ecifi
c pr
ojec
ts id
entifi
ed a
s pr
iori
ties
by fo
ur
of o
ur n
onpr
ofit p
artn
ers.
Org
aniz
atio
nal i
mpr
ovem
ents
In 2
013,
to im
prov
e th
e effi
cien
cy a
nd im
pact
of o
ur
wor
k, w
e co
nduc
ted
an e
xten
sive
eva
luat
ion
of o
ur
appr
oach
to w
orki
ng w
ith n
onpr
ofits
at t
he lo
cal,
regi
onal
and
nat
iona
l lev
els.
As
a re
sult
of o
ur fi
ndin
gs,
we
esta
blis
hed
a ne
w O
ffice
of N
onpr
ofit E
ngag
emen
t (O
NE)
to c
oord
inat
e pa
rtne
rshi
ps a
cros
s al
l our
line
s of
bus
ines
s, s
tren
gthe
n ou
r re
latio
nshi
ps w
ith c
urre
nt
nonp
rofit
par
tner
s, id
entif
y ne
w p
artn
ersh
ip o
ppor
tuni
-tie
s an
d se
rve
as a
sin
gle
poin
t of c
onta
ct fo
r co
mm
unity
de
velo
pmen
t non
profi
ts s
eeki
ng to
eng
age
the
com
pany
.
Thro
ugh
ONE,
we
incr
ease
d th
e nu
mbe
r of r
egio
nal
com
mun
ity re
latio
ns m
anag
ers,
bas
ed th
roug
hout
the
Unite
d St
ates
. The
ir ro
le is
to w
ork
clos
ely
with
non
profi
ts
and
thin
k cr
eativ
ely
abou
t the
val
ue w
e ca
n bu
ild th
roug
h ne
w a
nd e
xpan
ded
part
ners
hips
. We
also
are
exp
andi
ng
our w
ork
with
nat
iona
l non
profi
t org
aniz
atio
ns fo
cuse
d on
low
- and
mod
erat
e-in
com
e co
mm
unity
dev
elop
men
t.
Our
dee
p an
d su
stai
ned
enga
gem
ent w
ith th
ose
we
serv
e al
low
s us
to d
evel
op th
e st
rate
gies
, pro
gram
s an
d po
licie
s th
at h
elp
us to
war
d m
akin
g a
diffe
renc
e ev
ery
sing
le d
ay. O
ver
the
past
yea
rs, w
e ha
ve g
reat
ly
enha
nced
that
eng
agem
ent,
whi
ch h
as y
ield
ed s
igni
f-ic
ant i
mpr
ovem
ents
in h
ow w
e se
rve
and
supp
ort o
ur
clie
nts,
cus
tom
ers
and
the
com
mun
ities
in w
hich
we
oper
ate.
Goi
ng fo
rwar
d, w
e in
tend
to b
uild
on
that
foun
-da
tion,
reco
gniz
ing
that
ther
e al
way
s is
mor
e w
e ca
n do
to
del
iver
a p
ositi
ve im
pact
.
COM
MU
NIT
IES
VI.
A C
ON
TIN
UIN
G E
FFO
RT
HO
W W
E D
O B
USI
NES
S —
OU
R R
ELAT
ION
SHIP
S W
ITH
REG
ULA
TOR
S, S
HA
REH
OLD
ERS
AN
D C
OM
MU
NIT
IES
84
HO
W W
E D
O B
USI
NES
S —
A C
ON
TIN
UIN
G E
FFO
RT85
A C
ON
TIN
UIN
G E
FFO
RT
The
actio
ns d
escr
ibed
in th
is re
port
refle
ct a
com
pany
th
at is
com
mitt
ed to
impr
ovin
g. T
hese
effo
rts
have
bee
n as
muc
h ab
out l
ooki
ng to
the
futu
re a
s th
ey h
ave
been
ab
out r
eflec
ting
on th
e pa
st. A
s su
ch, o
ur e
xam
inat
ion
has
give
n us
insi
ghts
that
will
bot
h he
lp u
s do
bus
ines
s th
e ri
ght w
ay to
day
and
prep
are
for
chal
leng
es th
at m
ay
lie a
head
.
The
less
ons
we
have
lear
ned
over
the
past
sev
eral
ye
ars
rein
forc
e th
e im
port
ance
of h
avin
g ou
tsta
ndin
g pe
ople
and
a s
tron
g cu
lture
. Our
sen
ior
man
agem
ent
team
, with
sup
port
and
eng
agem
ent f
rom
the
Boar
d of
Di
rect
ors,
has
focu
sed
on s
ettin
g th
e ri
ght t
one
from
the
top
by c
lear
ly c
omm
unic
atin
g ou
r co
rpor
ate
stan
dard
s to
our
em
ploy
ees.
Thr
ough
our
Bus
ines
s Pr
inci
ples
, tha
t to
ne e
choe
s th
roug
h ev
eryt
hing
we
do a
nd is
del
iver
ed
to o
ur p
eopl
e at
eac
h st
age
of th
e em
ploy
ee li
fe c
ycle
—
from
new
hire
trai
ning
to h
ow w
e re
war
d em
ploy
ees
for
doin
g th
e ri
ght t
hing
. Thi
s he
lps
our
peop
le in
ter-
naliz
e th
e co
mpa
ny’s
valu
es, s
how
up
at w
ork
each
day
co
mm
itted
to li
ving
our
mis
sion
and
adh
erin
g to
our
Bu
sine
ss P
rinc
iple
s.
Our
em
ploy
ees
are
our f
ront
line
in s
ervi
ng o
ur
cust
omer
s, a
nd th
ey a
lso
are
our f
ront
line
in p
rote
ctin
g th
e co
mpa
ny. W
e re
cogn
ize
that
they
mus
t be
supp
orte
d by
a w
ell-f
unct
ioni
ng c
ontr
ol e
nviro
nmen
t. Th
e en
hanc
e-m
ents
we
have
mad
e ar
ound
gov
erna
nce
and
polic
ies
and
our i
nves
tmen
ts in
peo
ple
and
tech
nolo
gy h
ave
been
un
prec
eden
ted
in o
ur c
ompa
ny’s
hist
ory.
Whi
le th
ese
effor
ts a
re o
ngoi
ng, w
e be
lieve
thei
r sca
le a
nd b
read
th
dem
onst
rate
our
com
mitm
ent t
o ge
ttin
g it
right
.
With
out
stan
ding
peo
ple
and
wel
l-fun
ctio
ning
con
trol
s,
our
busi
ness
es c
an fo
cus
on w
hat t
hey
do b
est:
serv
ing
cust
omer
s. E
ach
of o
ur b
usin
esse
s co
ntin
ues
to e
nhan
ce
its c
usto
mer
exp
erie
nce
by o
fferi
ng n
ew p
rodu
cts
and
solu
tions
, exp
andi
ng in
to n
ew g
eogr
aphi
es, a
nd
impr
ovin
g ex
istin
g ca
pabi
litie
s an
d pr
oces
ses.
We
hope
that
, thr
ough
the
open
info
rmat
ion
shar
ing
embo
died
thro
ugho
ut th
is re
port
, our
sha
reho
lder
s an
d ot
hers
will
see
wha
t our
peo
ple
see
each
day
: Our
co
mpa
ny is
wor
king
har
d to
mee
t the
nee
ds o
f our
cu
stom
ers;
live
up
to th
e ex
pect
atio
ns o
f our
regu
la-
tors
, sha
reho
lder
s an
d th
e co
mm
uniti
es w
e se
rve;
and
co
ntin
ue th
e st
eps
that
will
ena
ble
the
com
pany
to s
tand
th
e te
st o
f tim
e.
We
have
cha
nged
a lo
t and
lear
ned
even
mor
e as
a
resu
lt of
the
effor
ts d
escr
ibed
in th
is re
port
. We
are
dedi
cate
d to
mak
ing
this
pro
cess
of s
elf-e
xam
inat
ion
and
impr
ovem
ent a
par
t of o
ur b
usin
ess-
as-u
sual
op
erat
ions
to s
uppo
rt o
ur g
oal t
o liv
e up
to o
ur g
uidi
ng
prin
cipl
e —
to d
o “o
nly
first
-cla
ss b
usin
ess
and
that
in a
fir
st-c
lass
way
.”
HO
W W
E D
O B
USI
NES
S —
A C
ON
TIN
UIN
G E
FFO
RT86
VII
. A
PP
END
IX
HO
W W
E D
O B
USI
NES
S —
APP
END
IX89
EXCE
PTI
ON
AL
CLIE
NT
SER
VIC
E
1. W
e fo
cus
on th
e cu
stom
er
W
e m
ust r
emem
ber
that
we
are
in b
usin
ess
for
one
reas
on: t
o se
rve
our
clie
nts.
Our
job
is to
alw
ays
do
righ
t by
them
and
con
sist
ently
str
ive
not o
nly
to m
eet
thei
r ne
eds
but a
lso
to e
xcee
d th
eir
expe
ctat
ions
and
co
ntin
ually
mak
e it
easy
for
clie
nts
to d
o bu
sine
ss w
ith
us. J
PMor
gan
Chas
e bu
ilds
for
the
long
term
, and
we
are
not a
fair
wea
ther
frie
nd. C
lient
s, c
omm
uniti
es
and
coun
trie
s w
ant t
o kn
ow w
e ar
e go
ing
to b
e th
ere
for
them
in g
ood
times
and
, mor
e im
port
ant,
whe
n tim
es a
re to
ugh.
Eur
ope
is a
n ex
ampl
e of
whe
re w
e ha
ve a
pplie
d th
is p
hilo
soph
y. W
hen
Gree
ce, I
rela
nd,
Italy
, Por
tuga
l and
Spa
in g
ot in
to tr
oubl
e ov
er th
e pa
st fe
w y
ears
, we
mad
e th
e de
cisi
on to
sta
y th
e co
urse
(eve
n th
ough
und
er te
rrib
le s
cena
rios
, we
coul
d ha
ve lo
st $
5 bi
llion
or
mor
e). B
ut w
e ha
ve b
een
doin
g bu
sine
ss w
ith c
lient
s in
thos
e co
untr
ies,
in s
ome
case
s, fo
r m
ore
than
a h
undr
ed y
ears
. We
need
ed to
he
lp th
em in
thei
r tim
e of
trou
ble
— a
nd w
e di
d —
and
w
e’ll
do s
o ag
ain
in th
e fu
ture
if th
e ne
ed a
rise
s. W
e ho
pe to
be
doin
g bu
sine
ss in
that
par
t of t
he w
orld
for
deca
des
to c
ome.
2. W
e ar
e fie
ld a
nd c
lient
dri
ven;
we
oper
ate
at
the
loca
l lev
el
Tr
ue c
usto
mer
ori
enta
tion
mea
ns a
ctin
g in
the
cust
omer
’s be
st in
tere
st —
not
onc
e in
a w
hile
but
all
the
time.
Thi
s m
eans
offe
ring
out
stan
ding
pro
duct
s an
d se
rvic
es a
nd b
eing
hel
pful
, cou
rteo
us a
nd q
uick
to
follo
w u
p. It
als
o re
quire
s ad
optin
g an
out
war
d —
not
an
inw
ard
— fo
cus
and
resp
ondi
ng to
the
com
peti-
tion.
We
need
to b
e ke
enly
aw
are
of th
e co
mpe
titiv
e la
ndsc
ape
and
be s
wift
to a
ct. T
he fi
eld
— w
here
our
em
ploy
ees
are
clos
est t
o th
e cu
stom
er —
sho
uld
driv
e th
is p
roce
ss w
ith th
e am
ple
reso
urce
s an
d au
thor
ity to
be
the
best
at s
ervi
ng c
usto
mer
s. O
ur s
tren
gth
resi
des
in th
e fie
ld.
3. W
e bu
ild w
orld
-cla
ss fr
anch
ises
, inv
esti
ng
for
the
long
term
, to
serv
e ou
r cl
ient
s
A
mar
k of
an
exce
ptio
nal c
ompa
ny is
its
abili
ty to
se
rve
its c
lient
s an
d ou
tper
form
its
com
petit
ors
over
a
sust
aine
d pe
riod
of t
ime,
rega
rdle
ss o
f eco
nom
ic
cond
ition
s. A
ny c
ompa
ny c
an im
prov
e ea
rnin
gs in
the
shor
t run
by
taki
ng o
n ad
ditio
nal r
isk
or c
uttin
g ba
ck
on in
vest
men
ts. B
ut it
may
be
the
kind
of g
row
th o
ne
com
es to
regr
et. A
t JPM
orga
n Ch
ase,
our
obl
igat
ion
is to
bui
ld a
com
pany
that
can
thri
ve in
any
env
i-ro
nmen
t. To
ach
ieve
thes
e re
sults
, we
mus
t pro
vide
ou
r cu
stom
ers
with
a b
road
, com
plet
e an
d hi
gh-
qual
ity s
et o
f pro
duct
s an
d se
rvic
es w
hile
leve
ragi
ng
the
bene
fits
and
effici
ency
that
com
e w
ith s
cale
. In
addi
tion,
we
mus
t dem
onst
rate
our
abi
lity
to g
row
bo
th fr
om w
ithin
(e.g
., ne
w p
rodu
cts,
mar
ket s
hare
ga
ins)
and
by
acqu
isiti
on. F
inal
ly, w
e m
ust d
emon
-st
rate
that
the
who
le is
gre
ater
than
the
sum
of t
he
part
s. E
ach
busi
ness
fuel
s an
d co
mpl
emen
ts th
e ot
hers
, pro
vidi
ng s
ubst
antia
l com
petit
ive
adva
ntag
es
and
grea
t glo
bal b
rand
s.
OU
R B
USI
NES
S P
RIN
CIP
LES:
HO
W W
E D
O B
USI
NES
S —
APP
END
IX90
4. W
e se
t the
hig
hest
sta
ndar
ds o
f pe
rfor
man
ce
It
is u
p to
eac
h co
mpa
ny, e
ach
lead
ersh
ip te
am
and
each
indi
vidu
al to
set
thei
r ow
n st
anda
rds
of
perf
orm
ance
. Our
s w
ill b
e th
e hi
ghes
t. W
e w
ill
neve
r sh
y aw
ay fr
om c
ompa
ring
our
selv
es w
ith
the
best
com
pani
es, k
now
ing
that
we
may
com
e up
sho
rt. S
triv
ing
to b
e th
e be
st is
wha
t mot
ivat
es
us to
see
k co
ntin
ual i
mpr
ovem
ent.
In a
dditi
on,
we
will
rem
embe
r th
at in
divi
dual
per
form
ance
is
n’t a
lway
s ea
sy to
judg
e. M
anag
ers
resp
onsi
ble
for
a bu
sine
ss m
ust e
valu
ate
indi
vidu
als
alon
g a
spec
trum
of f
acto
rs. D
id th
ese
lead
ers
act w
ith
inte
grity
? D
id th
ese
man
ager
s hi
re a
nd tr
ain
good
pe
ople
? D
id th
ese
man
ager
s bu
ild th
e sy
stem
s an
d pr
oduc
ts th
at w
ill s
tren
gthe
n th
e co
mpa
ny, n
ot ju
st
duri
ng th
e cu
rren
t yea
r bu
t for
futu
re y
ears
? D
id
thes
e m
anag
ers
deve
lop
real
man
agem
ent t
eam
s?
In e
ssen
ce, a
re m
anag
ers
build
ing
som
ethi
ng w
ith
sust
aina
ble,
long
-ter
m v
alue
? M
akin
g th
ese
dete
r-m
inat
ions
req
uire
s co
urag
e an
d ju
dgm
ent.
5. W
e de
man
d fin
anci
al r
igor
and
ris
k di
scip
line;
we
will
alw
ays
mai
ntai
n a
fort
ress
bal
ance
she
et
Fi
nanc
ial d
isci
plin
e is
the
bedr
ock
of a
hea
lthy
and
grow
ing
com
pany
, par
ticul
arly
a fi
nanc
ial i
nsti-
tutio
n. S
ound
acc
ount
ing
stan
dard
s, tr
ansp
aren
t pu
blic
repo
rtin
g an
d ex
celle
nt m
anag
emen
t inf
or-
mat
ion
syst
ems
all l
ead
to h
igh-
qual
ity e
arni
ngs
that
are
recu
rrin
g an
d pr
edic
tabl
e in
nat
ure,
yie
ld
high
retu
rns
on c
apita
l, pr
oduc
e go
od m
argi
ns
and
prov
ide
reas
onab
le r
isk
rela
tive
to th
e ca
pita
l de
ploy
ed. F
inan
cial
dis
cipl
ine
mus
t be
mat
ched
w
ith s
uper
ior
— n
ot ju
st a
vera
ge —
ris
k m
anag
e-m
ent.
If w
e pr
oper
ly m
anag
e ri
sk, w
e sh
ould
get
a
good
retu
rn th
roug
h th
e cy
cle,
not
just
dur
ing
the
good
tim
es. W
e m
ust c
onsi
der
wal
king
aw
ay fr
om
busi
ness
whe
re w
e ca
nnot
see
a fa
ir re
turn
ove
r th
e cy
cle.
Thi
s m
ay s
low
sho
rt-t
erm
gro
wth
, but
it u
nder
-sc
ores
our
com
mitm
ent t
o gr
ow in
a s
usta
inab
le w
ay.
It is
a tr
adeo
ff w
e al
way
s w
ill b
e pr
epar
ed to
mak
e.
An u
nque
stio
nabl
y st
rong
— o
r fo
rtre
ss —
bal
ance
sh
eet i
s cr
itica
l to
man
agin
g ou
r bu
sine
sses
. Hav
ing
appr
opri
ate
rese
rves
, str
ong
capi
tal r
atio
s an
d hi
gh
cred
it ra
tings
allo
ws
us to
with
stan
d di
fficu
lt ev
ents
. It
give
s us
the
flexi
bilit
y to
dep
loy
our
capi
tal a
s w
e se
e fit
— s
uch
as in
crea
sing
our
div
iden
ds, b
uyin
g ba
ck
stoc
k, in
vest
ing
in o
ur b
usin
esse
s, m
akin
g ac
quis
ition
s or
sim
ply
cons
ervi
ng o
ur c
apita
l. W
e w
ill d
eplo
y ou
r ca
pita
l wis
ely
and
will
kee
p in
min
d ou
r sh
areh
olde
rs’
best
inte
rest
s. T
his
is o
ne o
f our
mos
t im
port
ant g
oals
. An
d to
mai
ntai
n ou
r fo
rtre
ss b
alan
ce s
heet
, we
mus
t th
orou
ghly
und
erst
and
all o
ur a
sset
s an
d lia
bilit
ies;
m
ake
sure
that
som
eone
is a
ccou
ntab
le fo
r th
em; u
se
soun
d, e
cono
mic
ally
app
ropr
iate
acc
ount
ing;
and
hav
e st
rong
con
trol
s.
6. W
e st
rive
for
the
best
inte
rnal
gov
erna
nce
and
cont
rols
Go
od in
tern
al g
over
nanc
e is
ess
entia
l to
effec
tive
man
agem
ent.
It ti
es to
geth
er a
ll ou
r bu
sine
sses
w
orld
wid
e w
ith a
com
mon
set
of r
ules
, exp
ecta
tions
an
d ov
ersi
ght a
ctiv
ities
. The
se h
elp
safe
guar
d ou
r re
puta
tion,
whi
ch w
e be
lieve
is o
ne o
f our
mos
t im
port
ant a
sset
s, a
nd a
lign
the
com
pany
’s p
erfo
r-m
ance
with
the
best
inte
rest
s of
our
sha
reho
lder
s.
We
are
com
mitt
ed to
hav
ing
cont
rols
that
are
sec
ond
to n
one.
We
cont
inua
lly w
ork
to b
uild
a c
ultu
re th
at
enco
urag
es a
nd r
ewar
ds s
ound
ris
k m
anag
emen
t, w
ith a
tran
spar
ent f
ram
ewor
k th
at p
enet
rate
s ev
ery
aspe
ct o
f our
bus
ines
s at
eve
ry le
vel.
We
wan
t the
pu
blic
, the
reg
ulat
ors
and
our
shar
ehol
ders
to h
ave
confi
denc
e th
at w
e ar
e th
e sa
fest
and
sou
ndes
t ban
k on
the
plan
et.
OP
ERAT
ION
AL
EXCE
LLEN
CE
HO
W W
E D
O B
USI
NES
S —
APP
END
IX91
7. W
e ac
t and
thin
k lik
e ow
ners
and
par
tner
s
W
e w
ant o
ur e
mpl
oyee
s to
thin
k an
d ac
t lik
e ow
ners
by
hav
ing
a st
ake
in o
ur fi
nanc
ial p
erfo
rman
ce a
nd b
y pa
rtic
ipat
ing
in a
com
pens
atio
n st
ruct
ure
that
is fa
ir
and
perf
orm
ance
bas
ed. B
ig c
ompa
nies
nee
d en
tre-
pren
eurs
and
inno
vato
rs —
and
peo
ple
need
to k
now
th
at it
is a
ccep
tabl
e to
try
even
if th
ey d
on’t
succ
eed.
Bu
reau
crac
y, s
ilos
and
polit
ics
are
the
bane
of l
arge
co
rpor
atio
ns a
nd m
ust b
e co
mba
ted
vigo
rous
ly a
nd
cont
inua
lly. W
hile
app
ropr
iate
rul
es a
nd p
roce
dure
s ar
e cr
itica
lly im
port
ant t
o th
e co
ntro
l and
dis
cipl
ine
of a
n or
gani
zatio
n, u
nnec
essa
ry r
ules
cre
ate
bure
au-
crac
y. B
y de
stro
ying
initi
ativ
e, s
tiflin
g cr
eativ
ity a
nd
unde
rmin
ing
acco
unta
bilit
y, b
urea
ucra
cy m
akes
it
hard
for
peop
le to
do
a go
od jo
b an
d fo
r m
anag
ers
to
man
age
wel
l.
8. W
e st
rive
to b
uild
and
mai
ntai
n th
e be
st,
mos
t effi
cien
t sys
tem
s an
d op
erat
ions
Pr
ofita
ble
com
pani
es c
onsi
sten
tly b
uild
the
best
in
fras
truc
ture
. The
y st
rive
to c
reat
e th
e be
st s
yste
ms
and
oper
atio
ns s
o th
ey c
an m
eet t
heir
cus
tom
ers’
ne
eds
and
exce
ed s
ervi
ce e
xpec
tatio
ns. T
o th
at e
nd,
we
mus
t be
a le
an a
nd e
ffici
ent p
rodu
cer.
It is
not
ju
st a
bout
cut
ting
cost
s. G
reat
per
form
ance
req
uire
s sp
endi
ng m
ore
and
gett
ing
mor
e fr
om e
very
dol
lar
we
allo
cate
. It i
s ir
resp
onsi
ble
to w
aste
our
val
uabl
e re
sour
ces
on e
xpen
ditu
res
that
hav
e no
thin
g to
do
with
bet
ter
serv
ing
our
clie
nts.
We
belie
ve te
ch-
nolo
gy a
nd e
ffici
ent o
pera
tions
are
cri
tical
in th
e fin
anci
al s
ervi
ces
busi
ness
. We
mus
t rel
entle
ssly
fo
cus
on in
tegr
atin
g an
d up
grad
ing
tech
nolo
gy a
nd
on a
ggre
ssiv
ely
cons
olid
atin
g, s
trea
mlin
ing
and
stan
-da
rdiz
ing
our
oper
atio
ns, a
ll of
whi
ch h
elp
to p
ush
deci
sion
mak
ing
and
auth
ority
to th
e fie
ld. W
e ne
ed
to c
ontin
ually
str
ive
to g
ive
our
cust
omer
s m
ore
—
bett
er, f
aste
r an
d ch
eape
r.
9. W
e ar
e di
scip
lined
in e
very
thin
g w
e do
W
ithou
t dis
cipl
ine,
med
iocr
ity r
ules
. Exh
ibiti
ng
disc
iplin
e in
clud
es m
eetin
g al
l our
com
mitm
ents
. Th
is m
eans
hol
ding
regu
lar
busi
ness
revi
ews,
tale
nt
eval
uatio
ns a
nd te
am m
eetin
gs a
nd c
onst
antly
str
ivin
g fo
r im
prov
emen
t — fr
om h
avin
g a
stro
ng w
ork
ethi
c to
mak
ing
lists
and
doi
ng re
al, d
etai
led
follo
w-u
p.
Disc
iplin
ed le
ader
ship
is li
ke e
xerc
ise;
the
regi
men
has
to
be
sust
aine
d fo
r it
to d
o an
y go
od.
10. W
e ex
ecut
e w
ith
both
ski
ll an
d ur
genc
y
Thro
ugho
ut th
e co
mpa
ny, w
e m
ust s
et h
igh
stan
dard
s of
per
form
ance
all
the
time,
at a
det
aile
d le
vel a
nd
with
a re
al s
ense
of u
rgen
cy. L
arge
inst
itutio
ns
have
a te
nden
cy to
war
d sl
owin
g th
ings
dow
n, w
hich
de
man
ds th
at le
ader
s pu
sh fo
rwar
d co
ntin
uous
ly. A
s im
port
ant a
s st
rate
gy is
, str
ong
exec
utio
n is
key
in
ever
y si
ngle
con
tact
we
have
with
eac
h of
our
clie
nts
and
cust
omer
s. T
o ex
ecut
e su
perb
ly, w
e m
ust a
ct
in a
dis
cipl
ined
way
with
gre
at s
peed
. Bur
eauc
racy
ca
n sl
ow u
s do
wn
so it
mus
t be
cont
inua
lly id
entifi
ed
and
erad
icat
ed. F
ast a
nd le
an a
re th
e an
tidot
es to
cr
eepi
ng b
urea
ucra
cy.
HO
W W
E D
O B
USI
NES
S —
APP
END
IX92
11.
We
will
not
com
prom
ise
our
inte
grit
y
Th
ere
is n
o pi
ece
of b
usin
ess,
no
deal
, no
reve
nue
stre
am th
at is
mor
e im
port
ant t
han
our o
blig
atio
n to
ac
t with
resp
onsi
bilit
y, w
ith e
thic
s an
d w
ithin
the
law.
W
e fo
llow
not
onl
y th
e le
tter
but
als
o th
e sp
irit o
f the
ru
les
and
regu
latio
ns th
at g
over
n ou
r ind
ustr
y. T
here
is
no
room
for c
ompr
omis
e. In
bus
ines
s, a
s in
eve
ry
othe
r are
na, e
thic
al b
ehav
ior d
oes
not j
ust h
appe
n.
It ha
s to
be
culti
vate
d an
d re
peat
edly
affi
rmed
th
roug
hout
the
orga
niza
tion.
Mai
ntai
ning
the
high
est
stan
dard
s of
inte
grity
invo
lves
bei
ng h
ones
t and
do
ing
the
right
thin
g fo
r our
cus
tom
ers,
our
fello
w
empl
oyee
s, o
ur s
hare
hold
ers
and
all o
ur p
artn
ers.
To
para
phra
se J.
P. M
orga
n, Jr
., w
e w
ill c
ondu
ct fi
rst-c
lass
bu
sine
ss in
a fi
rst-c
lass
way
.
12.
We
face
fact
s
W
e m
ust b
uild
a c
ultu
re b
ased
on
trut
h, k
now
ledg
e,
cons
truc
tive
deba
te, a
pas
sion
to s
ucce
ed, a
nd
the
cour
age
to fa
ce a
nd fi
x m
ista
kes.
We
mus
t be
brut
ally
hon
est w
ith o
urse
lves
. Fro
m e
xper
ienc
e,
we
know
peo
ple
will
tell
you
the
trut
h ab
out w
hat
need
s to
be
done
— if
you
ask
them
. We
wan
t to
be
a co
mpa
ny th
at p
rom
otes
this
kin
d of
con
stru
ctiv
e ex
chan
ge. T
hen
— a
nd w
e be
lieve
this
is th
e ha
rdes
t pa
rt o
f lea
ders
hip
— w
e m
ust h
ave
the
fort
itude
an
d co
urag
e to
take
act
ion
and
do th
e rig
ht th
ing,
ho
wev
er d
ifficu
lt. L
eade
rshi
p is
an
hono
r and
a
priv
ilege
and
com
es w
ith a
resp
onsi
bilit
y to
set
the
right
exa
mpl
e. A
ll ou
r peo
ple
mus
t be
enga
ged
in
chal
leng
ing
the
syst
em a
nd s
olvi
ng p
robl
ems.
The
ke
ys a
re n
ever
to s
top
lear
ning
, to
shar
e id
eas,
and
to
alw
ays
ackn
owle
dge
and
lear
n fr
om m
ista
kes.
Our
co
mm
itmen
t is
to c
reat
e a
self-
sust
aini
ng c
ultu
re th
at
striv
es fo
r con
tinua
l im
prov
emen
t, w
hich
will
ens
ure
the
heal
th o
f thi
s co
mpa
ny fo
r dec
ades
to c
ome.
In
a c
old-
bloo
ded,
hon
est w
ay, l
eade
rs e
mph
asiz
e th
e ne
gativ
es a
t man
agem
ent m
eetin
gs a
nd fo
cus
on w
hat c
an b
e im
prov
ed (o
f cou
rse,
it’s
okay
to
cele
brat
e th
e su
cces
ses,
too)
. All
repo
rtin
g m
ust b
e ac
cura
te, a
nd a
ll re
leva
nt fa
cts
mus
t be
repo
rted
and
fu
lly d
iscl
osed
usi
ng o
ne s
et o
f boo
ks.
13.
We
have
fort
itud
e
Fo
rtitu
de o
ften
is m
issi
ng in
lead
ers:
The
y ne
ed
to h
ave
a fie
rce
reso
lve
to a
ct. I
t mea
ns d
rivi
ng
chan
ge, fi
ghtin
g bu
reau
crac
y an
d po
litic
s, a
nd ta
king
ow
ners
hip
and
resp
onsi
bilit
y.
14. W
e fo
ster
an
envi
ronm
ent o
f res
pect
, in
clus
iven
ess,
hum
anit
y an
d hu
mili
ty
Th
e be
st le
ader
s tr
eat a
ll pe
ople
pro
perl
y an
d re
spec
tful
ly, f
rom
cle
rks
to C
EOs.
We
need
to h
elp
each
oth
er b
ecau
se o
ur c
olle
ctiv
e pu
rpos
e is
to s
erve
cl
ient
s. W
hen
stro
ng le
ader
s co
nsid
er p
rom
otio
ns,
they
pic
k pe
ople
who
are
res
pect
ed. A
nd le
ader
s al
so s
houl
d as
k th
emse
lves
: Wou
ld I
wan
t to
wor
k fo
r hi
m?
Wou
ld I
wan
t my
son
or d
augh
ter
to r
epor
t to
her
? Le
ader
s ne
ed to
ack
now
ledg
e th
ose
who
se
rved
bef
ore
them
and
hel
ped
shap
e th
e en
terp
rise
—
it’s
not
one
lead
er’s
ow
n do
ing.
The
re’s
a lo
t of
luck
invo
lved
in a
nyon
e’s
succ
ess,
and
hum
ility
and
gr
atitu
de a
re im
port
ant.
15.
We
help
str
engt
hen
the
com
mun
itie
s in
w
hich
we
live
and
wor
k
W
e be
lieve
that
bui
ldin
g a
stro
ng, v
ibra
nt c
ompa
ny
— o
ne th
at s
tand
s th
e te
st o
f tim
e —
eve
ntua
lly w
ill
bene
fit n
ot o
nly
our s
hare
hold
ers
but a
lso
ever
yone
we
touc
h. It
is w
hat e
nabl
es u
s to
giv
e ba
ck to
our
com
mu-
nitie
s. In
one
sen
se, w
e vi
ew o
urse
lves
as
a sm
all
busi
ness
. If w
e w
ere
the
neig
hbor
hood
sto
re, w
e w
ould
cr
eate
sum
mer
jobs
, spo
nsor
loca
l spo
rts
team
s an
d su
ppor
t nea
rby
orga
niza
tions
. We
oper
ate
this
way
in
man
y of
our
com
mun
ities
aro
und
the
wor
ld, c
omm
itted
to
add
ing
valu
e by
focu
sing
on
issu
es th
at a
re u
nive
r-sa
lly im
port
ant,
incl
udin
g ed
ucat
ion
and
com
mun
ity
deve
lopm
ent.
Our g
reat
est s
ourc
e of
prid
e, h
owev
er, i
s ou
r em
ploy
ees
who
con
trib
ute
trem
endo
us a
mou
nts
of
time
and
tale
nt to
wor
thw
hile
cau
ses
arou
nd th
e gl
obe.
Ou
r lon
g tr
aditi
on o
f vol
unte
eris
m c
ontin
ues
with
th
ousa
nds
of e
mpl
oyee
s pa
rtic
ipat
ing
in h
undr
eds
of
volu
ntee
r effo
rts.
A C
OM
MIT
MEN
T TO
INTE
GR
ITY,
FA
IRN
ESS
AN
D R
ESP
ON
SIB
ILIT
Y
HO
W W
E D
O B
USI
NES
S —
APP
END
IX93
16. W
e hi
re, t
rain
and
ret
ain
grea
t, d
iver
se
empl
oyee
s
We
need
to r
emin
d ou
rsel
ves
that
the
mos
t im
port
ant t
hing
we
can
do fo
r em
ploy
ees
is to
bui
ld
a he
alth
y, v
ibra
nt c
ompa
ny th
at tr
eats
peo
ple
with
re
spec
t and
cre
ates
opp
ortu
nitie
s. E
very
per
son
coun
ts, a
nd w
e al
l sup
port
one
ano
ther
. We
mus
t do
wha
t is
righ
t for
the
com
pany
and
for
the
cust
omer
ev
en if
we
have
to m
ake
unpo
pula
r de
cisi
ons
or
forg
o ne
ar-t
erm
rew
ards
. We
stri
ve to
bui
ld a
n in
clus
ive
wor
k en
viro
nmen
t tha
t dra
ws
on a
nd
deve
lops
the
best
tale
nt. W
e w
ant i
ndiv
idua
ls o
f any
ra
ce, f
aith
, nat
iona
lity,
gen
der,
sexu
al o
rien
tatio
n or
phy
sica
l abi
lity
to h
ave
the
oppo
rtun
ity to
exc
el
base
d on
thei
r pe
rfor
man
ce a
nd c
ontr
ibut
ion
to th
e co
mpa
ny. B
uild
ing
a di
vers
e an
d in
clus
ive
wor
k en
vi-
ronm
ent r
equi
res
effor
t and
per
seve
ranc
e, w
hich
is
why
we
will
mak
e in
clus
iven
ess
and
dive
rsity
an
inte
gral
par
t of h
ow w
e m
anag
e th
e co
mpa
ny.
17.
We
build
team
wor
k, lo
yalt
y an
d m
oral
e
We
need
to c
ontin
ually
hire
and
trai
n a
pool
of d
iver
se
man
ager
s an
d st
rong
lead
ers.
Gre
at m
anag
ers
driv
e fo
r sup
erio
r per
form
ance
, bui
ldin
g te
amw
ork
with
in
and
acro
ss b
usin
ess
lines
. Suc
cess
ful l
eade
rs d
emon
-st
rate
a p
assi
on to
win
by
actin
g qu
ickl
y on
toug
h is
sues
, rel
entle
ssly
str
ivin
g to
impr
ove
perf
orm
ance
an
d de
velo
ping
peo
ple.
We
know
that
loya
lty a
nd m
utua
l res
pect
are
a
two-
way
str
eet.
Loya
lty s
houl
d be
to th
e pr
inci
ples
for
whi
ch s
omeo
ne s
tand
s an
d to
the
inst
itutio
n. W
hen
mis
used
, loy
alty
to a
n in
divi
dual
is a
noth
er fo
rm o
f cr
onyi
sm. S
imila
rly, l
oyal
ty to
em
ploy
ees
does
not
m
ean
that
man
ager
s ow
e an
y pe
rson
a p
artic
ular
job.
It
mea
ns b
uild
ing
a he
alth
y, v
ibra
nt c
ompa
ny b
y te
lling
em
ploy
ees
the
trut
h an
d gi
ving
them
mea
ning
ful
wor
k, tr
aini
ng a
nd o
ppor
tuni
ties.
If e
mpl
oyee
s fa
ll do
wn,
then
we
shou
ld g
et th
em th
e he
lp th
ey n
eed.
M
erito
crac
y an
d te
amw
ork
are
criti
cal,
but t
hey
also
fr
eque
ntly
are
mis
unde
rsto
od. M
erito
crac
y m
eans
pu
ttin
g th
e be
st p
erso
n in
the
job,
whi
ch p
rom
otes
a
sens
e of
just
ice
in th
e or
gani
zatio
n ra
ther
than
the
appe
aran
ce o
f cyn
icis
m: “
Here
they
go
agai
n, ta
king
ca
re o
f the
ir fr
iend
s.”
H
igh
mor
ale
is d
evel
oped
thro
ugh
fixin
g pr
oble
ms,
de
alin
g di
rect
ly a
nd h
ones
tly w
ith is
sues
, ear
ning
re
spec
t and
win
ning
. It d
oes
not c
ome
from
ove
r-pa
ying
peo
ple
or d
eliv
erin
g sw
eet t
alk,
whi
ch a
void
s ha
rd d
ecis
ion
mak
ing
and
fost
ers
pass
ive-
aggr
essi
ve
beha
vior
. Fin
ally
, whi
le te
amw
ork
is im
port
ant a
nd
ofte
n co
de fo
r “g
ettin
g al
ong,
” eq
ually
impo
rtan
t is
an in
divi
dual
’s a
bilit
y to
hav
e th
e co
urag
e to
sta
nd
alon
e an
d do
the
righ
t thi
ng w
hen
need
ed.
A G
REA
T TE
AM
AN
D W
INN
ING
CU
LTU
RE
HO
W W
E D
O B
USI
NES
S —
APP
END
IX94
18. W
e m
aint
ain
an o
pen,
ent
repr
eneu
rial
m
erit
ocra
cy fo
r al
l
W
e ne
ed to
mak
e in
nova
tion
part
of o
ur D
NA.
Thi
s do
es n
ot m
ean
spen
ding
hun
dred
s of
mill
ions
of
dolla
rs o
n fa
iled
idea
s. It
doe
s m
ean,
how
ever
, tha
t w
e w
ill ta
ke c
alcu
late
d ri
sks,
kno
win
g th
at s
ome
will
fa
il. It
requ
ires
that
we
build
forw
ard-
look
ing
idea
s in
to e
very
con
vers
atio
n, e
very
ana
lysi
s an
d ev
ery
new
st
rate
gy w
e co
nsid
er.
19.
We
com
mun
icat
e ho
nest
ly, c
lear
ly a
nd
cons
iste
ntly
Sh
arin
g in
form
atio
n al
l the
tim
e is
vita
l — w
e sh
ould
de
bate
the
issu
es a
nd a
ltern
ativ
e ap
proa
ches
, not
th
e fa
cts.
The
bes
t lea
ders
kill
bur
eauc
racy
and
w
atch
for
tellt
ale
sign
s of
pol
itics
, suc
h as
sid
ebar
m
eetin
gs a
fter
the
othe
r m
eetin
gs b
ecau
se p
eopl
e di
dn’t
spea
k th
eir
min
d at
the
righ
t tim
e. It
’s e
qual
ly
impo
rtan
t for
lead
ers
to g
et o
ut o
f the
offi
ce
regu
larl
y to
sta
y fo
cuse
d on
wha
t’s h
appe
ning
in th
e fie
ld. A
nyon
e in
a m
eetin
g sh
ould
feel
free
to s
peak
hi
s or
her
min
d w
ithou
t fea
r of
offe
ndin
g an
yone
el
se. S
omeo
ne o
nce
desc
ribe
d th
e im
port
ance
of
havi
ng “
at le
ast o
ne tr
uth-
telle
r at
the
tabl
e.”
Wel
l, if
ther
e is
just
one
trut
h-te
ller
at th
e ta
ble,
a b
usin
ess
is in
trou
ble
— e
very
one
shou
ld b
e a
trut
h-te
ller.
20. W
e st
rive
to b
e go
od le
ader
s
Tr
ue le
ader
s m
ust s
et th
e hi
ghes
t sta
ndar
ds o
f in
tegr
ity. S
uch
stan
dard
s de
man
d th
at w
e tr
eat
cust
omer
s an
d em
ploy
ees
the
way
we
wou
ld w
ant
to b
e tr
eate
d ou
rsel
ves
or th
e w
ay w
e w
ould
wan
t ou
r ow
n m
othe
r to
be
trea
ted.
With
out t
he c
apac
ity
to in
nova
te, r
espo
nd to
new
and
rapi
dly
chan
ging
m
arke
ts, a
nd a
ntic
ipat
e en
orm
ous
chal
leng
es, l
arge
co
mpa
nies
like
our
s w
ould
cea
se to
exi
st. T
he p
eopl
e w
ho h
elp
us a
chie
ve th
ese
obje
ctiv
es a
re a
s cr
itica
l to
the
ongo
ing
grow
th o
f our
org
aniz
atio
n as
they
wou
ld
be to
the
laun
ch o
f a s
ucce
ssfu
l sta
rtup
com
pany
. Go
od p
eopl
e w
ant t
o w
ork
for
good
lead
ers.
But
bad
le
ader
s ar
e co
rros
ive
to a
n or
gani
zatio
n an
d ca
n dr
ive
out a
lmos
t any
one
who
’s go
od. I
t oft
en is
a c
halle
nge
to fi
nd th
e ba
d le
ader
s an
d ro
ot th
em o
ut s
ince
man
y ar
e m
anip
ulat
ive
and
dece
ptiv
e. M
ost l
eade
rs I
know
ar
e w
orki
ng to
bui
ld s
omet
hing
of w
hich
they
can
be
prou
d. T
hey
usua
lly w
ork
hard
— n
ot b
ecau
se th
ey
mus
t but
bec
ause
they
wan
t to
do s
o. T
hey
set h
igh
stan
dard
s be
caus
e if
they
are
goi
ng to
do
som
ethi
ng,
they
wan
t to
do it
to th
e be
st o
f the
ir a
bilit
y. T
hey
belie
ve in
thin
gs la
rger
than
them
selv
es, a
nd th
e hi
ghes
t obl
igat
ion
is to
the
team
or
the
orga
niza
tion.
Le
ader
s de
man
d lo
yalty
, not
to th
emse
lves
but
to
the
caus
e fo
r w
hich
they
sta
nd. A
t our
com
pany
and
at
man
y of
the
best
com
pani
es th
roug
hout
his
tory
, th
e co
ntin
ual c
reat
ion
of g
ood
lead
ers
is w
hat h
as
enab
led
the
orga
niza
tion
to s
tand
the
true
test
of
grea
tnes
s —
the
test
of t
ime.
HO
W W
E D
O B
USI
NES
S —
APP
END
IX95
BU
SIN
ESS
PRAC
TICE
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HO
W W
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O B
USI
NES
S —
APP
END
IX96 CO
RPO
RATE
GO
VERN
ANCE
& N
OM
INAT
ING
COM
MIT
TEE
OPE
RATI
NG
COM
MIT
TEE
Bank
ing
EXEC
UTI
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EVIE
WER
S
and
Fina
nce
Stra
tegy
PRO
JECT
TEA
M
REP
OR
T G
OV
ERN
AN
CE A
ND
PR
OJE
CT T
EAM
IIIH
OW
WE
DO
BU
SIN
ESS
— T
HE
REP
ORT
This
repo
rt w
as is
sued
on
Dece
mbe
r 19
, 201
4. A
ll in
form
atio
n is
cor
rect
at t
ime
of p
rint
ing
but i
s su
bjec
t to
chan
ge.
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orga
n Ch
ase
& Co
. doe
s no
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erta
ke to
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ate
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ard-
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ts c
onta
ined
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is re
port
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ct th
e im
pact
of c
ircum
stan
ces
or e
vent
s th
at m
ay a
rise
aft
er th
e da
te o
f the
forw
ard-
look
ing
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emen
ts.
©20
14 JP
Mor
gan
Chas
e &
Co. A
ll ri
ghts
rese
rved
.De
cem
ber
2014