Sallie Mae 2012 Annual Report Download - page 95

and working in close coordination with our Legal group. Our Corporate Compliance Committee serves as a
regular internal forum where key compliance issues and risks are discussed. At this committee, business,
compliance and legal professionals review testing of existing regulatory compliance procedures and approve new
or revised procedures.
Our Code of Business Conduct and the on-going training our employees receive in many compliance areas
provide a framework for our employees to conduct themselves with the highest integrity. We instill a risk-
conscious culture through communications, training, policies and procedures. We have strengthened the linkage
between the management performance process and individual compensation to encourage employees to work
toward corporate-wide compliance goals.
Reputational/Political Risk. Reputational risk is the risk to shareholder value and growth from a negative
perception, whether true or not, of an organization by its key stakeholders, the changing expectations of its
stakeholders and/or weak internal coordination of business decisions. This could expose us to litigation, financial
loss or other damage to our business or brand. Political risk addresses political changes that may affect the
probability of achieving our business objectives.
Management proactively assesses and manages political and reputation risk. Our government relations team
manages our review of and response to all formal inquiries from members of Congress, state legislators, and their
staff, including providing targeted messaging that reinforces our public policy goals. We review and consider
political and reputational risks on an integrated basis in connection with the risk management oversight activities
conducted in the various aspects of our business on matters as diverse as the launch of new products and services,
our credit underwriting activities and how we fund our operations. Our public relations, marketing and media
teams constantly monitor print, electronic and social media to understand how we are perceived; actively provide
assistance and support to our customers and other constituencies; and maintain and promote the value of our
considerable corporate brand. Significant political and reputation risks are reported to and monitored by the
Finance and Operations Committee of our Board. Our Legal, Government Relations and Compliance groups
efforts are coordinated through our General Counsel and regularly meet and collaborate with our Media and
Investor Relations teams to provide more coordinated monitoring and management of our political and
reputational risks.
Strategy Risk. Strategic risk is the risk to shareholder value and growth trajectory from adverse business
decisions and/or improper implementation of business strategies. Management must be able to develop and
implement business strategies that leverage the organization’s core competencies, are structured appropriately
and are achievable. The cornerstone of our annual strategy risk management program involves our Board’s
approval of our annual strategic business plan and management’s recommendations for how to grow our business
while focused on managing risks to acceptable parameters. Management and the Board and its various
committees continuously review how we execute on our annual business plan.
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