Huntington National Bank 2012 Annual Report Download - page 23

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Available Information
This information may be read and copied at the Public Reference Room of the SEC at 100 F Street, N.E., Washington, D.C.
20549. You can obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
also maintains an Internet web site that contains reports, proxy statements, and other information about issuers, like us, who file
electronically with the SEC. The address of the site is http://www.sec.gov. The reports and other information filed by us with the SEC
are also available at our Internet web site. The address of the site is http://www.huntington.com. Except as specifically incorporated by
reference into this Annual Report on Form 10-K, information on those web sites is not part of this report. You also should be able to
inspect reports, proxy statements, and other information about us at the offices of the NASDAQ National Market at 33 Whitehall
Street, New York, New York.
Item 1A: Risk Factors
Risk Governance
We use a multi-faceted approach to risk governance. It begins with the board of directors defining our risk appetite in aggregate
as moderate-to-low. This does not preclude engagement in select higher risk activities. Rather, the definition is intended to represent
an average of where we want our overall risk to be managed.
Two board committees oversee implementation of this desired risk profile: The Audit Committee and the Risk Oversight
Committee.
xThe Audit Committee is principally involved with overseeing the integrity of financial statements, providing oversight of
the internal audit department, and selecting our external auditors. Our chief auditor reports directly to the Audit
Committee Chair.
xThe Risk Oversight Committee supervises our risk management processes which primarily cover credit, market,
liquidity, operational, compliance, legal, strategic, and reputational risks. It also approves the charters of executive risk
management committees, sets risk limits on certain risk measures (e.g., economic value of equity), receives results of the
risk self-assessment process, and routinely engages management in review of key risks. Our credit review executive
reports directly to the Risk Oversight Committee.
Both committees are comprised of independent directors and routinely hold executive sessions with our key officers engaged in
accounting and risk management.
On a periodic basis, the two committees meet in joint session to cover matters relevant to both such as the construct and
appropriateness of the ACL, which is reviewed quarterly.
We maintain a philosophy that each colleague is responsible for risk. This is manifested by the design of a risk management
organization that places emphasis on risk-ownership by risk-takers. We believe that by placing ownership of risk within its related
business segment, attention to, and accountability for, risk is heightened.
Further, through its Compensation Committee, the board of directors seeks to ensure its system of rewards is risk-sensitive and
aligns the interests of management, creditors, and shareholders. We utilize a variety of compensation-related tools to induce
appropriate behavior, including common stock ownership thresholds for the chief executive officer and certain members of senior
management, a requirement to hold until retirement a portion of net shares received upon exercise of stock options or release of
restricted stock awards (50% for executive officers and 25% for other award recipients), equity deferrals, clawback provisions, and the
right to terminate compensation plans at any time.
Management has introduced a number of steps to help ensure an aggregate moderate-to-low risk appetite is maintained. Foremost
is a quarterly, self-assessment process in which each business segment produces an analysis of its risks and the strength of its risk
controls. The segment analyses are combined with assessments by our risk management organization of major risk sectors (e.g.,
credit, market, operational, reputational, compliance, etc.) to produce an overall enterprise risk assessment. Outcomes of the process
include a determination of the quality of the overall control process, the direction of risk, and our position compared to the defined risk
appetite.
Management also utilizes a wide series of metrics (key risk indicators) to monitor risk positions throughout the Company. In
general, a range for each metric is established which allows the company, in aggregate, to maintain its moderate-to-low risk profile.
Deviations from the range will indicate if the risk being measured is moving, which may then necessitate corrective action.