GE 2014 Annual Report Download - page 129

GE 2014 FORM 10-K 109
RISK MANAGEMENT
SENIOR MANAGEMENT
The GE Board’s risk oversight process builds upon management’s risk assessment and mitigation processes, which include
standardized reviews of long-term strategic and operational planning; executive development and evaluation; code of conduct
compliance under the Company’s The Spirit & The Letter; regulatory compliance; health, safety and environmental
compliance; financial reporting and controllership; and information technology and security.
A vice-chairman of GE and GE’s CRO are responsible for overseeing and coordinating risk assessment and mitigation on an
enterprise-wide basis. They lead the Corporate Risk Function and are responsible for the identification of key business risks,
providing for appropriate management of these risks within GE Board guidelines, and enforcement through policies and
procedures.
OPERATING REVIEWS
CORPORATE AUDIT STAFF & GE CAPITAL AUDIT are responsible for reviewing the governance, processes, controls
and accuracy of GE’s and GE Capital’s financial and compliance reporting.
POLICY COMPLIANCE REVIEW BOARD is a management-level committee that further assists in assessing and
mitigating risk. The Policy Compliance Review Board, which conducted 9 compliance operating reviews and met 3 times in
2014, is chaired by the Company’s general counsel and includes the Chief Financial Officer and other senior-level functional
leaders. It has principal responsibility for monitoring compliance matters across the Company.
GE BLUEPRINT REVIEWS are integrated business planning reviews across GE that evaluate strategic objectives,
operating and organizational performance, and enterprise risks. Blueprint reviews are held at least 4 times per year and
include the most senior GE business leaders.
GE CAPITAL ENTERPRISE RISK MANAGEMENT COMMITTEE oversees the implementation of GE Capital’s risk
appetite, and senior management’s establishment of appropriate systems to ensure enterprise risks are effectively identified,
measured, monitored, and controlled. Additional information on GE Capital’s Enterprise Risk Management Committee can be
found in the GE Capital Risk Management and Mitigation section below.
RISK MANAGERS
Risk assessment and risk management are the responsibility of management and are carried out through risk managers who
are operationally integrated into each of our businesses. These risk managers have acquired deep domain expertise through
their long careers and proximity to the business’ operations and core processes. Both risk managers and the business
leadership teams have specific, enterprise risk focused goals and objectives that are aligned with our overall risk framework.
RISK MITIGATION & COMMUNICATION
Risks identified through our risk management processes are prioritized and, depending on the probability and severity of the
risk, escalated to the CRO. These risks are discussed and responsibility for them is assigned to the business or functional
leader most suited to manage the risk in connection with the quarterly operating reviews. Assigned owners are required to
continually monitor, evaluate and report on risks for which they bear responsibility. Enterprise risk leaders within each
business and corporate function are responsible to present to the CRO risk assessments and key risks at least annually. We
have general response strategies for managing risks, which categorize risks according to whether the Company will avoid,
transfer, reduce or accept the risk. These response strategies are tailored to ensure that risks are within acceptable GE Board
general guidelines.