September 25, 2014

John F. W. Rogers,

Secretary to the Board of Directors

The Goldman Sachs Group, Inc.

200 West Street,New York

NY 10282

 

Re: Shareholder Proposal on Independent Chairman

 

Dear Secretary to the Board of Directors:

 

            Enclosed please find my shareholder proposal for inclusion in our proxy materials for the 2015 annual meeting of shareholders and Scottrade letter of my shares ownership.  I will continuously hold these shares until the 2015 annual meeting of shareholders.

Should you have any questions, please contact me at 1-925-643-xxxx or zhao.cpri@gmail.com.

 

                                                                                                            Yours truly,

                                                                                    Jing Zhao

 

Enclosure: Shareholder proposal

          Scottrade letter of Jing Zhao’s shares ownership

Shareholder Proposal on Independent Chairman

Resolved: shareholders recommend that The Goldman Sachs Group, Inc. (the firm) adopt a policy that the Chairman of our board of directors shall be an independent director.  For the purpose of this proposal, an independent director is defined as at page 23 of the firm’s Proxy Statement for the 2014 Annual Meeting of Shareholders.

Supporting Statement

“[O]ur Governance Committee determined that continuing to combine the roles of Chairman and CEO is the most effective leadership structure”, but the reason that “[a] combined Chairman-CEO structure provides our firm with a single leader” (ibid. p. 17) is meaningless. There is no reason that an independent Chairman cannot “[demonstrate] clear accountability to our shareholders, clients and other stakeholders” (ibid. p. 17).  The firm has a Lead Director, but if the role of Lead Director is truly so important (as listed at ibid. p. 18), why not just name it Chairman?  A Chairman has more agenda-setting power than a lead director. An independent Chairman can change the dynamic in the board room. Separating the jobs of Chairman and CEO can add a layer of robust oversight and accountability of management, and provide effective deliberation of corporate strategy. The position of a lead director is inadequate to these tasks because competing or conflicting responsibilities for board leadership remain with the Chairman-CEO.

This proposal should also be evaluated in the context of our company’s overall unethical corporate governance, especially in regard to our firm’s highly risky and complicated international business.  For example, both our CEO and Lead Director listed their positions at Tsinghua University School of Economics and Management Advisory Board as a qualification for re-election. From the fact that Chinese President Xi Jinping met the Advisory Board’s foreign members to disclose his policy change before the Chinese Communist Party Eighteenth Congress in 2012, it is clear that the Advisory Board is a political tool to transferChinafrom state socialism to state capitalism.  In the case of the largest IPO on September 19, 2014, our firm played the core function to facilitate the corrupted conglomerate Alibaba to the U.S. market using the highly controversial and risky “variable interest entity” structure (for example, its board members include former Hong Kong Administrative Head and current Vice Chairman of Chinese People's Political Consultative Conference; its main inside investors include former Chinese President Jiang Zemin’s grandson who also worked in our firm before setting up his own private equity firm; Alibaba’s boss openly praised Deng Xiaoping for his role in the 1989 Tiananmen massacre). At least, our firm needs an independent Chairman without such political nepotism which gravely undermines our firm’s legitimacy doing business in China.