Bank of America 2010 Annual Report Download - page 68

The figure below illustrates the inter-relationship between the Board, Board level committees and management level committees with the majority of risk
oversight responsibilities for the Corporation.
Management
Level
Committees
Board Level
Committees
Board of Directors
Credit Committee Enterprise Risk
Committee
Audit Committee
Credit Risk
Committee
Allowance for Credit
Losses Committee
Risk Rating Executive
Oversight Committee
Regional Risk
Committee
Enterprise Credit Risk
Policy Committee
Enterprise Portfolio
Strategies Steering
Committee
Risk Oversight
Committee
Global Markets Risk
Committee
Equity Risk Governance
Committee
Ethics Oversight
Committee
Operational and
Compliance Risk
Committee
Disclosure Committee (2)
Asset Liability and
Market Risk Committee
Operational Risk
Committee (1)
International Governance
and Control Committee
(1)
Compliance Risk activities, including Ethics Oversight, are required to be reviewed by the Audit Committee and Operational Risk activities are required to be reviewed by the Enterprise Risk Committee.
(2)
The Disclosure Committee assists the CEO and CFO in fulfilling their responsibility for the accuracy and timeliness of the Corporation’s disclosures and reports the results of the process to the Audit Committee.
The Credit Committee is responsible for oversight of senior manage-
ment’s identification and management of the Corporation’s credit exposures
on an enterprise-wide basis, as well as the Corporation’s responses to trends
affecting those exposures. The Credit Committee is also responsible for
oversight of senior management’s actions relating to the adequacy of the
allowance for credit losses and the Corporation’s credit-related policies.
The Enterprise Risk Committee is responsible for exercising oversight of
senior management’s responsibility to identify the material risks facing the
Corporation and oversight of senior management’s planning for and manage-
ment of the Corporation’s material risks, including market risk, interest rate risk,
liquidity risk, operational risk and reputational risk. The Enterprise Risk Com-
mittee also oversees senior management’s establishment of policies and
guidelines articulating the Corporation’s risk tolerances for material categories
of risk, the performance and functioning of the Corporation’s overall risk
management function, and senior management’s establishment of appropriate
systems that support control of market risk, interest rate risk and liquidity risk.
The Audit Committee is responsible for assisting the Board in overseeing
the integrity of the Corporation’s Consolidated Financial Statements and the
effectiveness of the Corporation’s system of internal controls and policies
and procedures for managing and assessing risk, including compliance with
legal and regulatory requirements. The Audit Committee also provides ap-
proval and direct oversight of the independent registered public accounting
firm, including such firm’s assessment of management’s assertion of the
effectiveness of the Corporation’s disclosure controls and procedures and
the Corporation’s internal control over financial reporting; and oversight of
such accountant’s appointment, compensation, qualifications and indepen-
dence. The Audit Committee also oversees the corporate audit function.
The Credit, Enterprise Risk and Audit Committees provide enterprise-wide
oversight of the Corporation’s management and handling of risk. Each of
these three committees reports regularly to the Board on risk-related matters
within its responsibilities and together they provide the Board with integrated,
thorough insight about our management of strategic, credit, market, liquidity,
compliance, legal, operational and reputational risks. At meetings of each
Board committee and our Board, directors receive updates from management
regarding all aspects of enterprise risk management, including our perfor-
mance against our identified risk appetite.
Executive management develops for Board approval the Corporation’s
Risk Framework, Risk Appetite Statement, and strategic and financial oper-
ating plans. Management and the Board, through the Credit, Enterprise Risk
and Audit Committees, monitor financial performance, execution of the
strategic and financial operating plans, compliance with the risk appetite,
and the adequacy of internal controls.
Strategic Risk Management
Strategic risk is embedded in every line of business and is one of the major risk
categories along with credit, market, liquidity, compliance, operational and
reputational risks. It is the risk that results from adverse business decisions,
66 Bank of America 2010