American International Group

Submitted by Shruthi C. Jain (11) Richa Mahule (14) Aman Paliwal (17) Neelima Singh (20)

Overview of the Company

American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries. AIG has operations in the following area: General Insurance, Life Insurance and Retirement Service, Financial Services and Asset Management. Net Income: $2000 mn in 2011 Vision: To be the world s first-choice provider of insurance and financial services. We will create unmatched value for our customers, colleagues, business partners and shareholders, as we contribute to the growth of sustainable, prosperous communities.

Governance Structure
At least two-third of the directors will be independent Annual election of all directors A majority voting by-law that requires director nominees who receive more votes against than for election to tender their resignations A mandatory director retirement age of 73 A lead independent director named An executive session of the independent directors held at each regularly scheduled Board meeting at which the Lead Independent Director presides General limits on the number of Boards on which a director and CEO may serve Annual evaluations of the Board, each member of the Board and of each standing committee of the Board A commitment to the full, fair and transparent disclosure of executive compensation CEO compensation subject to the approval or ratification of the Board

Corporate Governance
Corporate governance is there to Ensure independent and effective functioning of AIG s Board of Directors Foster transparency and clear communication with stakeholders Promote high ethical standards and financial reporting integrity

Compliance with code of conduct

Commitments to each other Commitments to shareholders Commitments in the marketplace Commitments as corporate citizens

Public Policy and Social Responsibility Committee

Triple Bottom Line Performance

Sustainable Investment Environmental Responsibility Governance Environmental

Access to Financial Services

Social Disaster Response & Preparedness Diversity Investing in our people

Corporate Giving

Environmental Responsibility
AIG s global corporate policy and programs on the environment and climate change
Established an Office of Environmental and Climate Change

AIG environmental insurance products that expedite and facilitate cleanup of former industrial sites and other environmentally effected areas AIG Global Real Estate s leadership as an investor in and practitioner of sustainable building principles New insurance policies and practices, such as EcoPractice, Advanced Energy Solutions, and Lexington Insurance Company s EcoSurance Suite that focus on climate change solutions Participated in several collaborative efforts to support climate change solutions Environmental Stewardship Be Green

Social Responsibility
AIG is investing in their employees through a competitive benefits program as well as training and development AIG is providing employee diversity training to increase awareness of the benefits of a diverse working environment. They are also increasing the products that serve diverse communities as well as the diversity of suppliers AIG supports communities worldwide through corporate giving programs that focus on entrepreneurship, innovation, diversity and empowerment AIG is working with non profit organizations and governments worldwide to develop innovative disaster response and preparedness programs

Governance Responsibility
AIG continues to expand its global reach of micro insurance and microfinance services, opening new doors for clients in emerging markets around the world
Agreement with Bank Rakyat Indonesia to provide group policy Micro insurance program in Latin America to provide health and accident insurance Partnered with NGO to spread information and distribution sources of financial services programs

AIG Investments is building on its robust due diligence process to integrate environmental, social and governance considerations into investment analysis
Sustainable Investment Steering Committee Strategies to support ESG investment integration :
Awareness & Knowledge Data & Tools Client & Business Partners Reporting Leadership

Measurement Indicator
GLOBAL REPORTING INITIATIVE :Non profit organization

Economic, environmental and social sustainability Works towards a sustainable global economy Combine long term profitability with social justice and environmental care. Sustainability covers the key areas of economic, environmental, social and governance performance. Comprehensive sustainability reporting framework Measure and report their sustainability performance Reporting transparently and with accountability

Six Year Saga Of Alleged Fraud

The recent outcry over $165 million in post-bailout bonus payments has put AIG on the hot seat. "AIG has a culture of complicity. "You don't get into these kinds of problems by having a good corporate culture," said Peter Morici, a professor at the University of Maryland School of Business and the former chief economist at the US International Trade Commission. "Clearly this company has had endemic problems and it'd be best if we broke it up and sold it off so others can run its parts."

Current Investigations:

The FBI, SEC, and the British Serious Fraud Office are investigating the AIG Financial Products Group for hiding its losses on investments related to derivatives known as credit default swaps. It sustained a loss of more than $11 billion in the fourth quarter of 2008.

January 2009:
-A senior executive of AIG was found guilty in the 2000 case involving AIG and General Re. Christian Milton, who was AIG's vice president of reinsurance from 1982 to 2005, was convicted of conspiracy, securities fraud, mail fraud, and making false statements to the SEC in the case, which cost shareholders nearly $600 million. Greenberg was not charged in the case, although prosecutors identified him as an "unindicted coconspirator."

September 2008:
-Greenberg and three other former AIG executives paid $115 million to settle a case brought by a Louisiana pension fund. The Teachers' Retirement System of Louisiana alleged that half of the $2.2 billion that AIG paid to C.V. Starr -a firm run by Greenberg that also underwrote some AIG business -- from 2000 to 2005 was a sham, a way to artificially drive profits to the company. They also questioned why some AIG executives were allowed to serve simultaneously as officers of Starr, while also profiting from business between the two companies.

February 2006:
-AIG agreed to pay more than $1.6 billion -- the biggest regulatory settlement by a single company in U.S. history, according to Reuters -- to settle claims related to the 2000 case involving General Re and AIG. The settlement was for improper accounting, bid rigging and practices involving workers' compensation funds. ThenNew York Attorney General Eliot Spitzer said at the time that AIG "finds itself in this position solely because some senior managers thought it was acceptable to deceive the investing public and regulators."

September 2003:
-AIG paid a $10 million civil penalty to settle fraud charges involving Plainfield, Ind.-based phone distributor Brightpoint Inc. The SEC charged AIG with fashioning and selling "purported insurance product that Brightpoint used to report false and misleading financial information to the public."

Future Plan of AIG

Corporate Governance & Compliance Sustainable Investment s

Disaster Preparedness

Corporate Giving

Access to Financial Services

Diversity

Investing in People

Environment al Responsibilit y

Challenges
To overcome the prejudice of public in the light of numerous scams. Restore faith in the top executives Sustainable Investments vs. Returns Implementing the CSR plans on a global scale Training organization in new code of conduct

Key Learning
In order to carry out effective CSR activities, objectives should be clearly stated to the employees. However, the top management should also share the same vision. Post 2008, AIG s main objective has been to pay its debt and have subsequently reduced CSR Activities.