Goldman unveils checks on conflicts in bid to fix image SALT LAKE City (Reuters) - After dozens of meetings with executives and regulators, 100,000 hours of employee training and an immeasurable amount of public grief, Goldman Sachs Group Inc (GS.N) CEO Lloyd Blankfein claimed success in putting his bank and his legacy back on track. At Goldman's annual meeting on Thursday, Blankfein unveiled details of a three-year review and overhaul of the bank's practices in dealing with clients, following high-profile missteps that tarnished its reputation in the aftermath of the financial crisis. The overhaul imposes a system of checks to ensure that the bank is fair to clients and avoids conflicts, such as being on different sides of the same trade. Goldman faced public outrage in the aftermath of the 2008 financial crisis over accusations that it had treated clients improperly. The U.S. Securities and Exchange Commission sued the bank in April 2010, accusing it of misleading clients in a mortgage derivative deal. While the bank settled for $550 million without admitting anything more than having made a "mistake," Blankfein and other executives faced intense grilling on Capitol Hill. People familiar with the matter say the lawsuit and the hearings deeply embarrassed Goldman and Blankfein. After serving as CEO since June 2006 and steering the bank through the financial crisis, the 58-year-old Blankfein does not want to leave his post until he feels the bank's reputation and his own legacy are fully restored, these sources said. The month after the SEC's charges, Blankfein set up the Business Standards Committee. He traveled around the world to hold town-hall-style discussions with Goldman partners and managing directors. In a video on Goldman's website on Thursday, Blankfein tells a group of employees not to be afraid to call him if a problem appears because the risk of reputational damage outweighs the cost of possibly wasting his time. "Everyone has to have big eyes, big ears, know what's going on around them, and be policemen for the organization," he says in the video. Blankfein said on Thursday that the committee was part of a "much larger ongoing commitment to be open to change and to learn the right lessons from recent experiences." The venue of the annual meeting - in Salt Lake City, where Goldman is heralded as an economic savior because of its recent expansion there - provided a friendlier atmosphere than other recent shareholder gatherings, where protestors and activists drowned out Blankfein's talk of the Business Standards Committee's progress. The company won shareholder support for its 12 nominees to the board and its positions on the seven other proposals on the ballot. Goldman said the directors had been "overwhelmingly approved." The lowest vote the company received was 68 percent approval for its new stock compensation plan for executives. Proxy adviser ISS had recommended shareholders vote against the stock plan on grounds that it transfers too much wealth from shareholders to employees. Stock incentive plans tend to win support from around 85 percent of shareholders, according to proxy solicitor Georgeson Inc. Under the reforms, Goldman staffers are expected to be "looking around corners" to make sure deals that seem lucrative in the short term won't harm the bank later, the co-chairs of Goldman's Business Standards Committee told reporters at a briefing on Wednesday. The panel, led by J. Michael Evans and Gerald Corrigan, performed the review and implemented changes. Evans said many proposed deals will now encounter hurdles that didn't exist before. If they don't clear them, Goldman won't get involved. In the past, Goldman salespeople and bankers could sell clients almost anything they wanted to buy. Under the reforms, they must now run transactions through computerized processes - which the bank calls matrixes - and sometimes get top-level approvals to make sure deals are appropriate. Transaction that don't pass muster are taken to more senior Goldman managers. First, a manager in the business unit examines the deal. If necessary, it goes to a panel of managing directors, and then a higher-level committee of top executives. Transactions that reach the top executives tend to be advisory deals that involve large derivatives or complicated financing schemes, complex structured derivative products or products that involve tax, accounting or regulatory arbitrage, Evans said. New products proposed by Goldman staff also must run through a committee for approval, Corrigan said. It will be possible for clients to appeal: A deal that's initially deemed unsuitable can be approved if changes are made, Evans said. He gave examples of one unnamed IPO client that took its business elsewhere when Goldman rejected its plan, and another that "begrudgingly" made changes so that Goldman would advise on its offering. Evans said crisis-era deals, like the Abacus and Timberwolf derivatives trades that were documented in a U.S. Senate subcommittee report and involved litigation, would likely not be approved in the same manner today. Abacus, a synthetic collateralized debt obligation, was the focus of the SEC case. The regulator had said that Goldman allowed Paulson & Co to help pick residential mortgage-backed securities underlying the CDO while the hedge fund was also betting against the security, and failed to disclose that to buyers of the CDO. "If Abacus came today, it would run through a totally different framework for approval than before," he said, adding that his team was "turning ourselves into a pretzel" to figure out ways to avoid such situations in the future. Additional reporting by David Henry; Editing by Frank McGurty, John Wallace and Jan Paschal