Unum 2007 Annual Report Download - page 87

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Unum 2007 Annual Report 85
Foreign Currency Risk
We are also subject to foreign exchange risk arising from our foreign operations and certain investment securities denominated in those
local currencies. Foreign operations represented 7.7 percent and 7.4 percent of total assets at December 31, 2007 and 2006, respectively,
and 11.1 percent and 9.7 percent of total revenue from continuing operations for 2007 and 2006, respectively. Assuming foreign exchange
rates decreased 10 percent from the December 31, 2007 and 2006 levels, stockholders’ equity and net income as of and for the periods
then ended would not have been materially affected.
Risk Management
We have an Enterprise Risk Management (ERM) program, with primary objectives of:
 •ImprovingourCompany’srisk-baseddecisionmaking;
 •EffectivelyutilizingourcapitaltoimproveourCompany’sriskadjustedreturns;
 •Improvingandprotectingshareholdervalue;and
 •Supportingeffortstominimizeourreputationalrisk.
Our chief risk officer manages the ERM program. We utilize a “pyramid” risk committee structure, beginning with our board of director
committees and cascading down to business segment risk committees, to govern our ERM process and manage our risks in an integrated
manner. Collectively, these committees are responsible for managing our strategic, market, credit, insurance, operational, capital and
liquidity, and reputational risks.
An executive risk management committee is responsible for overseeing our corporate-wide risk management program. Representative
activities of this committee include, but are not limited to, reviewing risk reports, establishing corporate risk tolerance levels, providing
direction on emerging risk issues, and reporting on a periodic basis to our board of directors. The following executives comprise the committee:
our president and chief executive officer, our chief financial officer and chief actuary, our general counsel, the presidents of our three
primary business units, our chief operating officer for Unum U.S., our chief risk officer, and the senior vice president of internal audit.
Business unit risk committees for each of our three primary business units as well as our corporate function are responsible for
identifying, measuring, reporting, and managing insurance and operational risks within their respective areas, consistent with corporate
risk tolerance levels. Market and credit risk are jointly managed and executed by our asset/liability and investment committees.
Unum 2007 Annual Report 85