Discover 2010 Annual Report Download - page 22

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 15, 2011, we employed approximately 10,300 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. The framework is designed to be comprehensive with
respect to our reporting segments and its 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. The principles apply across all businesses and risk types.
Independence. We maintain independent risk and control functions including Corporate Risk Management, Law and
Compliance, and Internal Audit. Our Corporate Risk Officer, who leads our Corporate Risk Management function, 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 in
place 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 the 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 the risk appetite and strategic limits approved by our board of directors.
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 Executive Committee and
our Corporate Risk Officer.
Board of Directors. Our board of directors approves certain risk management policies and our risk appetite and
strategic limit framework. Our board also oversees our strategic plan and appoints our Corporate Risk Officer. In
addition, our board receives and reviews Federal Reserve examination reports, as well as information regarding other
examinations and communications from regulators to the extent they relate to risk management matters.
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