Unum 2015 Annual Report Download - page 83

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81
Unum 2015 Annual Report
Our ERM framework is the ongoing system of people, processes, and tools across our Company under which we intend to function
consistently and collectively to identify and assess risks and opportunities, to manage all material risks within our risk appetite, and to
contribute to strategic decision making. With the goal of maximizing shareholder value, the primary objectives of our ERM framework
are to support Unum Group in meeting its operational and financial objectives, maintaining liquidity, optimizing capital, and protecting
franchise value.
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 integrity, commitment, and
accountability and we believe these values allow our employees to feel comfortable identifying issues as well as taking ownership for
addressing potential problems.
Our 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: Own and Manage 2nd Line: Oversee 3rd Line: Independent Assurance
Business processes and procedures
employed throughout the Company
through which management assumes
and monitors significant risks
Management committees chartered with
oversight of activities within
the 1st and 2nd lines of defense,
mitigation of substantial exposures,
and management of emerging risks
Independent review of
ERM framework and
risk mitigation
Business units are primarily responsible for managing their principal risks. Our risk committees and other management committees
serve risk and control functions responsible for providing risk oversight, or the second line of risk control. Our internal audit team provides
periodic independent reviews and assurance activities serving as our third line of risk control.
In addition, our 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. The risk and finance 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. It also is responsible for oversight
of risks associated with investments, capital and financing plans and activities, and related financial matters, including matters pertaining
to our Closed Block segment. The audit committee of the board is responsible for oversight of risks relating to financial reporting risk and
certain operational risks. The human capital committee of the board is responsible for oversight of risks relating to our compensation plans
and programs. 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.
Our executive risk management committee is responsible for overseeing our enterprise-wide risk management program. The chief risk
officer, who is a member of the executive risk management committee, has primary responsibility for our ERM program and is supported by
corporate risk committees and by the risk committees of our operating segments.
Operating segment risk committees for Unum US, Unum UK, Colonial Life, and Closed Block are responsible for oversight of risks specific
to their businesses. These committees are responsible for identifying, measuring, reporting, and managing insurance and operational risks
within their respective areas, consistent with enterprise risk management guidance. Corporate risk committees and other management
committees oversee the operational, global technology services, investment, and capital management risks on a corporate level.