GE 2015 Annual Report Download - page 140

RISK MANAGEMENT
112 GE 2015 FORM 10-K
A disciplined approach to risk is important in a diversified organization like ours in order to ensure that we are executing according to
our strategic objectives and that we only accept risk for which we are adequately compensated. We evaluate risk at the individual
transaction level, and evaluate aggregated risk at the customer, industry, geographic and collateral-type levels, where appropriate. This
section describes our risk management practices during 2015; refer to *(¶V Proxy Statement for Board committee changes effective
March 1, 2016.
RESPONSIBILITIES
GE BOARD OF DIRECTORS
The GE Board of Directors (Board) has oversight for risk management with a focus on the most significant risks facing the Company,
including strategic, operational, financial and legal and compliance risks. At the end of each year, management and the Board jointly
develop a list of major risks that GE plans to prioritize in the next year. Throughout the year, the Board and the committees to which it
has delegated responsibility dedicate a portion of their meetings to review and discuss specific risk topics in greater detail. Significant
risks are presented and discussed in the context of the &(2¶V report on operations to the Board at regularly scheduled Board meetings
and at presentations to the Board and its committees by the vice chairmen, chief risk officers (CROs), general counsel and other
employees.
COMMITTEES
The Board has delegated responsibility for the oversight of specific risks to Board committees as follows:
THE AUDIT COMMITTEE oversees the policies, processes and risks relating to the financial statements, the financial reporting
process, compliance, auditing and cybersecurity. The Audit Committee, discusses with management the &RPSDQ\¶V risk assessment
and risk management practices and, when reviewing and approving the annual audit plan for the &RPSDQ\¶V and GE &DSLWDO¶V internal
audit functions, prioritizes audit focus areas based on their potential risk. The Audit Committee also coordinates closely with the Risk
Committee and periodically meets jointly with the Risk Committee and the GE Capital Board.
THE GOVERNANCE & PUBLIC AFFAIRS COMMITTEE oversees risk related to the &RPSDQ\¶V governance structure and
processes and risks arising from related-person transactions. It also reviews and discusses with management risks related to *(¶V
public policy initiatives and activities and positions on corporate social responsibilities, and it oversees the &RPSDQ\¶V environmental,
health and safety compliance and related risks.
THE MANAGEMENT DEVELOPMENT & COMPENSATION COMMITTEE oversees risk associated with management
resources and structure, succession planning and management development and selection processes, and it reviews executive
compensation practices at GE and GE Capital to confirm that pay arrangements incentivize leaders to improve the &RPSDQ\¶V
competitive position without encouraging excessive risk taking. The Management Development and Compensation Committee reviews
and discusses, at least annually, the relationship between risk management policies and practices, corporate strategy and senior
executive compensation.
THE RISK COMMITTEE assists the Board in its oversight of the &RPSDQ\¶V risk management framework. Its role also includes the
independent oversight of GE Capital, including the adequacy and effectiveness of GE &DSLWDO¶V risk management function and the GE
Capital Exit Plan, and the Risk Committee regularly meets jointly with the GE Capital Board throughout the year. Significant risks are
also discussed in full Board updates, Audit Committee updates and during director business visits.
THE SCIENCE & TECHNOLOGY COMMITTEE oversees the direction and effectiveness of the &RPSDQ\¶V R&D operations. It
also reviews the &RPSDQ\¶V technology and innovation strategies and approaches, including the impact on the &RPSDQ\¶V
performance, growth and competitive position. The Science & Technology Committee assists the Board in overseeing *(¶V
investments and initiatives in science, technology and software and reviews science and technology trends that could significantly affect
the Company and the industries in which it operates.
112 GE 2015 FORM 10-K