Progress Energy 2009 Annual Report Download - page 158

PROXY STATEMENT
20
Board Role in Risk Oversight
We have established a risk management framework that is the backbone for risk management activities
that occur across Progress Energy. The framework establishes processes for identifying, measuring, managing
and monitoring risk across the Company and its subsidiaries. We also maintain an ongoing inventory that details
risk types, the internal department that manages each type of risk and the Board committees that are involved in
overseeing those activities. Our Chief Executive Officer and Senior Management have responsibility for assessing
and managing the Company’s exposure to risk. In this regard, we have established a Risk Management Committee,
comprised of various senior executives, that provides guidance and direction in the identification and management
of financial risks. The Board is not involved in the Company’s day-to-day risk management activities; however, the
various Board Committees are involved in different aspects of overseeing those activities.
The Audit and Corporate Performance Committee is responsible for ensuring that appropriate guidelines
and controls are in place and reviews the framework for managing risk and adherence to that framework. The Audit
and Corporate Performance Committee reviews and discusses with management the Company’s guidelines and
polices governing risk assessment and risk management.
The Finance Committee is responsible for the oversight of the Risk Management Committee Policy and
Guidelines. It oversees the financial risks associated with guarantees, risk capital, corporate financing activities and
debt structure. The Finance Committee ensures that dollar amounts and limits are managed within the established
framework. The Finance Committee reports to the full Board at least once a quarter.
The Operations and Nuclear Oversight Committee is charged with oversight of risks related to operations
and environmental and health and safety issues.
The Organization and Compensation Committee is responsible for the oversight of risks that can result
from personnel issues and misalignment between compensation and performance plans and the interests of the
Company’s shareholders.
The enterprise risk management program is reviewed with the Board on an annual basis. Our risk
management framework is designed to enable the Board to stay informed about and understand the key risks facing
the Company, understand how those risks relate to the Company’s business and strategy, and the steps the Company
is taking to manage those risks.