Principal Financial Group 2014 Annual Report Download - page 7

Dear Shareholders:
As your Board of Directors, we take our
responsibility to you and all of our constituencies
seriously. We think it is important that you hear
directly from us about key aspects of our work and
our view on the company’s performance. We see a
critical part of the Board’s role as ensuring a strong
connection between execution of The Principal’s
strategy and your interests as shareholders.
In 2014, The Principal again delivered very strong
operating performance. More importantly, it
continues to deliver strong performance since the
financial crisis. As we have evolved the strategy of
the company toward a strong focus on global
investment management opportunities, we have
seen assets under management grow by 13 percent
per year since 2009. Assets under management are
one of the best metrics to use in evaluating the
overall performance of the company. In addition, we
are very pleased with the company’s recognition by
Pensions & Investments as the “Best Place to Work
in Money Management” in our category for the
third consecutive year.
Future Leadership
The Board believes that succession planning for the
future leadership of the company is one of its most
important roles. We are proud of the strong
leadership team at The Principal, developed primarily
from within the company but with the prudent
addition of external talent when needed. We continue
to focus on executive succession planning at each
Board meeting, with a more in-depth discussion once
each year. The recent appointment of Dan Houston
as president and chief operating officer is a result of
a multi-year succession planning process.
In addition, the Board is focused on having a similar
process to identify, recruit and develop talent within
our Board of Directors. We believe we have a great
mix of experience and expertise on the Board, and
we have a robust process for evaluating each Board
member before they are re-nominated.
Strategy Oversight
Your Board is fully involved in evaluating and
shaping the company’s long-term strategy. Each
year, we hold a two-day special strategy meeting
with the senior management team where we receive
detailed information on the long-term possibilities
for each business, along with the requirements for
success and possible risks involved. We think this has
been an important part of the strong operating
performance of the company. A special committee
of the Board—with regularly rotating membership—
oversees this strategic process. We ask senior
management to provide their future vision of The
Principal, and we use that work to help inform the
Board's deliberations over the next few years. In
short, we are proud of the company’s strategic
planning process, and we believe it will allow us to
continue to drive long-term value for our shareholders.
We are always interested in the thoughts and opinions
of our shareholders, whether on the performance of
the company or other important governance matters.
Together, we look forward to a successful future.
Sincerely,
From the
Board of Directors
Elizabeth E. Tallett
Lead Director, Principal Financial Group
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