Sallie Mae 2008 Annual Report Download - page 104

At least annually, the Risk Assessment Department conducts a survey to identify the Company’s top risks,
which supports the development of the internal audit plan. The survey solicits information from over 200
managers and seeks their input on issues such as entity level controls, compliance with laws and regulations,
anti-fraud programs and the internal audit plan. Identified risks are rated on significance and the likelihood of
occurrence. Risks with the greatest significance and highest likelihood of occurrence receive the most attention
and resources from management. Top risks are mapped to the appropriate management committee for problem
resolution and to the appropriate committee of the Board for oversight.
Management risk committees and their primary responsibility are as follows:
Credit Committee: establishes and enforces credit lending policies;
Compliance Committee: advises on and reviews regulatory compliance;
Asset/Liability Committee: manages market, interest rate and balance sheet risk;
Disclosure Committee: manages risk of compliance with SEC disclosure obligations;
Critical Accounting Assumptions Committee: reviews key critical accounting assumptions,
judgments and estimates; manages risk of compliance with financial reporting requirements;
Information Technology Steering Committee: manages security and confidentially of
information and effectiveness of IT infrastructure;
Business Continuity Steering Committee: manages risk of emergency loss of IT and other
infrastructure resources;
Internal Controls Excellence Steering Committee: monitors internal controls and compliance
with the Sarbanes-Oxley Act;
New Product Advisory Committee: approves new loan products and services.
The formal risk management process represents only one portion of our overall risk management
framework. Our Code of Business Conduct and the on-going training our employees receive in many
compliance areas provide a framework for employees to conduct themselves with the highest integrity. We
instill a risk-conscious culture through communications, training, policies and procedures and organizational
roles and responsibilities. We have strengthened the linkage between the management performance process
and individual compensation to encourage employees to work toward corporate-wide compliance goals.
Liquidity Risk Management
Liquidity is the ongoing ability to accommodate liability maturities and deposit withdrawals, fund asset
growth and business operations, and meet contractual obligations at reasonable market rates. Liquidity
management involves forecasting funding requirements and maintaining sufficient capacity to meet the needs
and accommodate fluctuations in asset and liability levels due to changes in our business operations or
unanticipated events. Sources of liquidity include wholesale market-based funding and deposits at Sallie Mae
Bank.
Through the Company’s Asset and Liability Management Policy, the Finance Committee of the Board of
Directors is responsible for establishing our liquidity policy and monitoring liquidity on an ongoing basis. The
Corporate Finance Department is responsible for planning and executing our funding activities and strategy.
In order to ensure adequate liquidity through the full range of potential operating environments and
market conditions, we conduct our liquidity management and business activities in a manner that will preserve
and enhance funding stability, flexibility and diversity. Key components of this operating strategy include
maintaining direct relationships with wholesale market funding providers and maintaining the ability to liquefy
certain assets when, and if, requirements warrant.
For a further discussion of our liquidity and capital resources and the sources and uses of liquidity see the
“LIQUIDITY AND CAPITAL RESOURCES” section of this Form 10-K.
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