Discover 2011 Annual Report Download - page 23

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Intellectual Property
We use a variety of methods, such as trademarks, patents, copyrights and trade secrets, to protect our intellectual
property. We also place appropriate restrictions on our proprietary information to control access and prevent unauthorized
disclosures. Our Discover, PULSE and Diners Club brands are important assets, and we take steps to protect the value of these
assets and our reputation.
Employees
As of January 20, 2012, we employed approximately 11,650 individuals.
Risk Management
The understanding, identification and management of risk are important elements to our success. Accordingly, we
maintain a comprehensive risk management program to identify, measure, monitor, evaluate, manage and report on the
principal risks we assume in conducting our activities. These risks include credit, market, liquidity, operational, compliance and
legal, and strategic risks.
Enterprise Risk Management Principles
Our enterprise risk management philosophy is to ensure that all relevant risks inherent in our business activities are
appropriately identified, measured, monitored, evaluated, managed and reported. Our enterprise risk management philosophy is
expressed through five key principles that guide our approach to risk management: comprehensiveness, accountability,
independence, defined risk appetite and strategic limits, and transparency.
Comprehensiveness. We seek to maintain a comprehensive framework for managing risk enterprise wide, including
policies, risk management processes, monitoring, and reporting. Our framework is designed to be comprehensive with respect
to our reporting segments and their control and support functions, and it extends across all risk types.
Accountability. We structure accountability along the principles of risk management execution, oversight and
independent validation. Our business units hold primary accountability for management of the risks to which their businesses
are exposed. Our principles apply across all businesses and risk types.
Independence. We maintain independent risk and control functions including our corporate risk management, law and
compliance, and internal audit departments. Our Corporate Risk Officer, who leads our corporate risk management department,
is appointed by our Board of Directors and is accountable for providing an independent perspective on the risks to which we
are exposed; how well management is identifying, assessing and managing risk; and the capabilities we have to manage risk
across the enterprise.
Defined Risk Appetite and Strategic Limits. Our Board of Directors approves a risk appetite and strategic limit
framework, which establishes an acceptable level of risk taking, considering desired financial returns and other objectives. To
that end, management sets, maintains and enforces policies, as well as limits and escalation triggers, that are consistent with our
risk appetite and strategic limits framework.
Transparency. Our risk management framework seeks to provide transparency of exposures and outcomes and is core to
our risk culture and operating style. We provide transparency through our risk committee structure, processes for escalating risk
incidents, and risk reporting at each level, including quarterly reports to our Risk Committee and the Audit and Risk Committee
of our Board of Directors.
Risk Management Roles and Responsibilities
Responsibility for risk management is held at several different levels, including our Board of Directors, the Audit and
Risk Committee of our Board of Directors, our Risk Committee, our Chief Executive Officer, our Corporate Risk Officer, our
corporate risk management department, our legal and compliance department and our internal audit department.
Board of Directors. Our Board of Directors is responsible for: (i) approval of certain risk management policies, (ii)
approval of our risk appetite and strategic limit framework, (iii) oversight of our strategic plan, and (iv) appointment of our
Corporate Risk Officer.
Audit and Risk Committee of our Board of Directors. The Audit and Risk Committee of our Board of Directors reviews
reports from management on our enterprise-wide risk management program. The Committee also reviews with management
the framework for assessing and managing our risk exposures and the steps management has taken to monitor and control such
risk exposures. The Committee also reviews reports from management on the status of and changes to risk exposures, policies,
procedures and practices.
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