Sallie Mae 2015 Annual Report Download - page 74

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Compliance Committee. The purpose of the Compliance Committee of the Board of the Bank is to assist the Board in: (1)
overseeing the continuing maintenance and enhancement of a strong and sustainable compliance culture; (2) providing
oversight of the compliance management system; (3) approving sound policies and objectives and effectively supervising all
compliance - related activities; (4) ensuring that the Bank has a qualified Chief Compliance Officer with sufficient authority,
independence and resources to administer an effective compliance management system; and (5) exercising and performing all
other duties and responsibilities delegated to the Committee.
Management-Level Committee Structure
Enterprise Risk Committee. The ERC is authorized by the Board of Directors to provide management oversight of the
ERM framework and compliance with our risk appetite. The ERC is the conduit from management to the Risk Committee of
the Board and provides for escalation in the instances of non-compliance with the framework. Additionally, the ERC is
authorized to create sub-committees to assist in the fulfillment of its oversight activities. During 2015, Sallie Mae operated
with the following sub-committees:
Credit Committee. The Credit Committee is responsible for credit and counterparty risk, product pricing, and credit and
collections operations.
Operational Risk Committee ("ORC"). The ORC is the oversight body for risk related to inadequate or failed internal
processes, people and systems or from external events. It also reviews information technology risk, regulatory, legal and
governance risks.
Asset and Liability Committee ("ALCO"). The ALCO is responsible for oversight of risks associated with managing our
assets and liabilities, and recommending limits for inclusion in our risk appetite and the investment structure.
Each of these standing sub-committees is comprised of subject matter experts from the senior management team and is
accountable to the ERC. Moreover, these sub-committees may be supported by one or more working groups. These working
groups include the Allowance for Loan Loss, Critical Accounting Assumptions and New Product and Services working groups.
Disclosure Committee. Our Disclosure Committee assists our Chief Executive Officer and Chief Financial Officer in their
review of periodic SEC reporting documents, earnings releases, investor materials and related disclosure policies and
procedures.
Compliance Committee. Our Bank Compliance Committee oversees regulatory compliance risk management activities
for the Bank and its affiliates.
Internal Audit Risk Assessment
Internal Audit regularly monitors our various risk management and compliance efforts, identifies areas that may require
increased focus and resources, and reports significant control issues and recommendations to executive management and the
Audit Committee of the Board of Directors. Annually, Internal Audit performs an independent risk assessment to evaluate the
risk of all significant components of the Company and uses the results to develop their annual Internal Audit plan. Additionally,
Internal Audit performs selected reviews of both risk management and compliance functions, including key controls, processes
and systems, in order to assess the effectiveness of the overall risk management framework.
Risk Categories
Our ERM framework is designed to address the following risk categories.
Credit Risk. Credit risk is the risk to earnings or capital resulting from an obligor’s failure to meet the terms of any
contract with us or otherwise fail to perform as agreed. Credit risk is found in all activities where success depends on
counterparty, issuer or borrower performance.
We have credit or counterparty risk exposure with borrowers and cosigners to whom we have made Private Education
Loans, the various counterparties with whom we have entered into derivative contracts and the various issuers with whom we
make investments. Credit and counterparty risks are overseen by the CRO, his staff and the Credit Committee. Our CRO
reports regularly to the Board’s Risk Committee as well as the Board of Directors.