Unum 2011 Annual Report Download - page 88

Through adherence to the objectives highlighted by the key components of our ERM framework, we believe we are better positioned
to fulfill our corporate mission, improve and protect stockholder value, and reduce reputational risk.
Risk Culture and Governance
We employ a decentralized risk management model under which risk-based decisions are made daily on a local level. To achieve long-
term success, we believe risk management must be the responsibility of all employees. The individual and collective decisions of our
employees play a key role in successfully managing our overall risk profile. We strive for a culture of accountability, risk management, and
strict compliance, and we believe these values allow our employees to feel comfortable identifying issues as well as taking ownership for
addressing potential problems.
Our risk culture is reinforced by our system of risk governance. We employ a multi-layered risk control system. Our three lines of
defense model is depicted below.
1st Line: The Business 2nd Line: Risk and Control 3rd Line: Independent Review
All Unum Employees Risk Committees and Chief Risk Officer Internal Audit and Internal Controls
Frontline Business Management Chief Actuary Audit Committee of Unum Group Board
Compliance Officers and Staff Unum Group Board
Business units are primarily responsible for managing their principal risks. Our risk committees, chief risk officer (CRO), chief actuary,
and compliance officers and staff serve in risk and control functions responsible for providing risk oversight, or the second line of risk
control. The internal audit team and internal controls team provide a second level of independent review, or our third line of risk control.
The audit committee of Unum Group’s board of directors (the board) oversees the entire ERM governance process, effectively providing
independent review for our third line of risk control.
The board has an active role, as a whole and through its committees, in overseeing management of our risks. The board is responsible
for managing strategic risk and regularly reviews information regarding our capital, liquidity, and operations, as well as the risks associated
with each, and receives an ERM report from our CRO at least annually, or more frequently as appropriate. The audit committee of the board
is responsible for oversight of our risk management process, including financial risk, operational risk, and any other risk not specifically
assigned to another board committee. The CRO provides a report on our risks and risk management processes to the audit committee of
the board at least quarterly. The finance committee of the board is responsible for oversight of risks associated with investments and
related financial matters. The human capital committee of the board is responsible for oversight of risks relating to our compensation plans
and programs. The CRO performs an annual risk assessment of our incentive compensation programs to ensure incentive plans are
balanced and consistent with the risk levels embedded in our financial and business plans. Results of this assessment are presented to our
human capital committee of the board annually, and conclusions from this assessment are reported in our proxy statement. The regulatory
compliance committee of the board is responsible for oversight of risks related to regulatory, compliance, policy, and legal matters, both
current and emerging, and whether of a local, state, federal, or international nature. While each committee is responsible for evaluating
certain risks and overseeing the management of such risks, the entire board is regularly informed through committee reports about such
risks in addition to the risk information it receives directly.
Unum 2011 Annual Report
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Quantitative and Qualitative Disclosures
About Market Risk