From the Board of Directors
To our shareholders
Our charge as your Board of Directors is clear: Oversee management’s strategy and assess and monitor company performance — in particular, the company’s ability to create long-term value for shareholders. In a changing world, this requires management to continuously address new challenges and capitalize on emerging opportunities. We take our responsibilities very seriously. On behalf of the Board, I’m pleased to provide an update on our key areas of focus, and share some thoughts on company performance.
Strategic oversight
The Board not only evaluates company strategy, but also shares perspectives, provides advice, and monitors and assesses management’s implementation. Each quarter, and at our annual strategy retreat with management, we discuss and debate topics critical to the company’s long-term success. At our 2016 retreat, we focused on growth strategies for our global businesses and capital planning. This involved an in-depth look at key challenges including shifting customer demand, technology and data trends, low interest rates and industry regulation. We’re confident management is continuing to evolve and refine company strategy, invest in growth and take appropriate actions to further strengthen its competitive positioning.
Risk oversight
Protection of shareholder value is as central to Board discussions as is creating long-term value. We have a coordinated, comprehensive approach to overseeing the enterprise-wide risk management responsibilities — identifying, assessing, monitoring and managing risk exposures. The Board regularly reviews strategic threats, opportunities, and risks (including credit, market, liquidity, product, operational and cybersecurity risk). Leadership is fully engaged in risk management and has made it a fundamental aspect of company strategy, operations and culture.
Talent and succession planning
Our role in talent and succession applies to both the Board and company leadership. In July 2016, we added Scott Mills, executive vice president and chief administrative officer of Viacom, Inc., to the Principal Board of Directors. Scott brings expertise in accounting and finance, capital markets, operations, business development and strategic planning. We continue to strive for balance between introducing new perspectives and maintaining experience and continuity. Our Board includes 10 independent directors with broad and diverse expertise, skills and viewpoints to help the company advance its strategy.
In September 2016, as part of our management succession process, we announced Deanna Strable would assume the role of chief financial officer, replacing Terry Lillis. Since joining the company in 1990, Deanna has held positions of increasing responsibility, including president of U.S. Insurance Solutions. Deanna brings strong financial expertise and deep experience running one of the company’s most successful businesses. The Board would like to express our sincere thanks to Terry who retired as chief financial officer in February 2017, after 35 years with the company. Terry played a critical role in guiding the company through difficult times and positioning Principal for a strong and successful future.
2016 performance
We, too, were pleased with company performance in 2016, and with the management transition, as Dan Houston completed his first year as CEO. The Board’s focus remains firmly on long-term performance, and the company continued to make strategic investments in the business and important strides in meeting customers’ needs.
Let me close by thanking you for your continued support. I appreciate the opportunity to serve as your lead director. Please contact me with your questions, thoughts and opinions at principal.com/contactliz.
Sincerely,
Elizabeth Tallett
Lead director, Principal Financial Group