JP Morgan Chase 2015 Annual Report Download - page 120

Management’s discussion and analysis
110 JPMorgan Chase & Co./2015 Annual Report
The Risk Policy Committee of the Board oversees the Firm’s
global risk management framework and approves the
primary risk-management policies of the Firm. The
Committee’s responsibilities include oversight of
management’s exercise of its responsibility to assess and
manage risks of the Firm, as well as its capital and liquidity
planning and analysis. Breaches in risk appetite tolerances,
liquidity issues that may have a material adverse impact on
the Firm and other significant risk-related matters are
escalated to the Committee.
The Audit Committee of the Board assists the Board in its
oversight of management’s responsibilities to assure that
there is an effective system of controls reasonably designed
to safeguard the assets and income of the Firm, assure the
integrity of the Firm’s financial statements and maintain
compliance with the Firm’s ethical standards, policies, plans
and procedures, and with laws and regulations. In addition,
the Audit Committee assists the Board in its oversight of the
Firm’s independent registered public accounting firm’s
qualifications and independence. The Independent Internal
Audit Function at the Firm is headed by the General Auditor,
who reports to the Audit Committee.
The Compensation & Management Development Committee
assists the Board in its oversight of the Firm’s compensation
programs and reviews and approves the Firm’s overall
compensation philosophy, incentive compensation pools,
and compensation practices consistent with key business
objectives and safety and soundness. The Committee
reviews Operating Committee members’ performance
against their goals, and approves their compensation
awards. The Committee also periodically reviews the Firm’s
diversity programs and management development and
succession planning, and provides oversight of the Firm’s
culture and conduct programs.
Among the Firm’s senior management-level committees that
are primarily responsible for key risk-related functions are:
The Firmwide Risk Committee (“FRC”) is the Firm’s highest
management-level risk committee. It provides oversight of
the risks inherent in the Firm’s businesses. The Committee is
co-chaired by the Firm’s CEO and CRO. Members of the
Committee include the Firm’s COO, CFO, Treasurer & Chief
Investment Officer, and General Counsel, as well as LOB
CEOs and CROs, and other senior managers from risk and
control functions. This Committee serves as an escalation
point for risk topics and issues raised by its members, the
Line of Business Risk Committees, Firmwide Control
Committee, Firmwide Fiduciary Risk Governance Committee,
Firmwide Reputation Risk Governance and regional Risk
Committees. The Committee escalates significant issues to
the Board of Directors, as appropriate.
The Firmwide Control Committee (“FCC”) is a forum for senior
management to discuss firmwide operational risks including
existing and emerging issues, to monitor operational risk
metrics, and to review the execution of the Operational Risk
Management Framework (“ORMF”). The FCC is co-chaired
by the Chief Control Officer and the Firmwide Risk Executive
for Operational Risk Governance. It serves as an escalation
point for the line of business, corporate functions and
regional Control Committees and escalates significant issues
to the FRC, as appropriate.
The Firmwide Fiduciary Risk Governance Committee
(“FFRGC”) is a forum for risk matters related to the Firm’s
fiduciary activities. The Committee oversees the firmwide
fiduciary risk governance framework, which supports the
consistent identification and escalation of fiduciary risk
matters by the relevant lines of business or corporate
functions responsible for managing fiduciary activities. The
Committee escalates significant issues to the FRC and any
other committee, as appropriate.
The Firmwide Reputation Risk Governance Group seeks to
promote consistent management of reputation risk across
the Firm. Its objectives are to increase visibility of
reputation risk governance; promote and maintain a
globally consistent governance model for reputation risk
across lines of business; promote early self-identification of
potential reputation risks to the Firm; and provide thought
leadership on cross-line-of-business reputation risk issues.
Each line of business has a separate reputation risk
governance structure which includes, in most cases, one or
more dedicated reputation risk committees.
Line of Business and Regional Risk Committees review the
ways in which the particular line of business or the business
operating in a particular region could be exposed to adverse
outcomes with a focus on identifying, accepting, escalating
and/or requiring remediation of matters brought to these
committees. These committees may escalate to the FRC, as
appropriate.
Line of Business, Corporate Function and Regional Control
Committees oversee the control environment in the
particular line of business or corporate function or the
business operating in a particular region. They are
responsible for reviewing the data indicating the quality and
stability of the processes in a business or function, focusing
on those processes with shortcomings and overseeing
process remediation. These committees escalate to the FCC,
as appropriate.