At Dominion Energy, we recognize that no enterprise can ever be entirely free of risk – it’s a fact of life. So we are dedicated to minimizing and managing risk through careful analysis, prudent foresight and strict internal controls.
Dominion Energy’s Board oversees the company’s management, business, environmental and all other affairs on behalf of shareholders. The Board and management both recognize that the company’s interests are advanced by responsibly addressing concerns about perceived risks, no matter who raises them — employees, customers, the communities in which Dominion Energy operates or external observers such as non-governmental organizations (NGOs) and advocacy groups. The value of diversity lies in the varied and distinct perspectives that are brought to bear on an issue from different vantage points. Dominion Energy’s Board and management rely on input from a multiplicity of frames of reference to inform their understanding of the various risks facing the company.
While the Board and its committees oversee risk policies, company management carries them out. The company has robust internal processes and an effective internal-control environment that help identify and manage risk. The Board and its committees regularly receive and discuss reports from members of management, including the chief risk officer, chief information officer and chief environmental officer, who are involved in risk assessment and risk management on a daily basis. These reports cover a wide range of topics including safety; environmental, employee, customer and social issues; and financial performance, economic issues and long-term strategy.
The Precautionary Principle
Dominion Energy takes all of these potential risks extremely seriously. The company also recognizes that it cannot foresee every conceivable eventuality. The company identifies and assesses, at least annually, major risks associated with each of its key business units (Gas Infrastructure, Power Delivery and Power Generation). Risk assessments also are conducted for Dominion Energy, Inc.
Risk assessments consider future risk trends; direction and pace of movement; and unknown and uncertainty elements. A key focus of these annual risk assessments entails using mitigation measures to address threats. For many – if not most – of the major risks, it is challenging to predict potential eventualities. Therefore, the company’s approach has always been to employ the Precautionary Principle – which is to minimize known risks and mitigate risks that are not yet fully understood, but for which “road signs” provide some indication of a possible future event or outcome.
When a new development is required based on customer needs and/or expectations, Dominion Energy has a long history of working well in advance of the development with environmental agencies and communities to find the best solution. Although future risks are not always known, potential threats and issues are identified and considered to find ways to avoid or mitigate potential impacts.