Unum 2018 Corporate Responsibility Report

Governance

The trust of our shareholders, customers and employees is best earned by implementing good governance practices and choosing the best people to lead us. We operate with an unwavering commitment to integrity and a laser focus on serving the long-term interests of our constituents.

Board of directors

Good governance starts with our board of directors, an independent and diverse voice that provides expertise, perspectives and insight for critical decisions. Our board members have qualifications and attributes in key areas relevant to Unum, and meet regularly with management and appropriate outside advisers to review and discuss the company's strategy, business and performance, as well as any important issues we face.

The following graphics provides a summary view of the qualifications and attributes of each of our 11 directors.

Accounting / Auditing

9

We operate in a complex financial and regulatory environment with disclosure requirements, detailed business processes and internal controls.

Business Operations

11

We have significant operations focused on customer service, claims management, sales, marketing and various back-house functions.

Capital Management

10

We allocate capital in various ways to run our operations, grow our core businesses and return value to shareholders.

Financial Expertise / Literacy

11

Our business involves complex financial transactions and reporting requirements.

Corporate Governance Leadership

8

As a public company, we expect effective oversight and transparency, and our stakeholders demand it.

Independence

10

Independent directors have no material relationships with us and are essential in providing unbiased oversight.

International

6

With global operations in several countries and prospects for further expansion, international experience helps us understand opportunities and challenges.

Industry Experience

8

Experience in the insurance and financial services industry provides a relevant understanding of our business, strategy and marketplace dynamics.

Investment Markets

3

We manage a large and long-term investment portfolio to uphold our promise to pay the future claims of our policyholders.

Public Company Executive

9

Experience leading a large, widely-held organization provides practical insights on need for transparency, accountability and integrity.

Recent Public Board Experience

8

We value individuals who understand public company reporting responsibilities and have experience with the issues commonly faced by public companies.

Regulatory/Risk Management

10

A complex regulatory and risk environment requires us to develop policies and procedures that effectively manage compliance and risk.

Technology

3

We rely on technology to manage customer data, deliver products and services to the market and pay claims.

Board diversity

We believe a critical component of the board's effectiveness is ensuring its membership remains diverse and represents a range of ages, backgrounds and overall experience. As of the 2019 Annual Meeting, half of our directors have served on the board for five years or less. More than half are women or represent a diverse group, making Unum a leader in our industry in board gender and racial/ethnic diversity. Additionally, board members range from 50 to 69 years of age, with the average age being 60.2 years.

Board Diversity

Chart of Gender, Racial & Ethnic Diversity

Board Diversity

Chart of Board of Directors' Age Diversity

Board Diversity

Chart of Board of Directors' Tenure

Board refreshment

The board is committed to effective succession planning and refreshment, including having honest and difficult conversations with individual directors when necessary. These conversations may arise in connection with the board evaluation process, succession planning or consideration of the annual slate of board nominees. As a result of these processes, directors may decide or be asked not to stand for re-election at the next Annual Meeting. It is expected that these refreshments practices will continue in the future.

Director independence

An independent board is central to our corporate governance philosophy and provides valuable external perspective. Our board is comprised almost entirely of independent, non-executive directors, including our chairman and committee chairs. Rick McKenney, our president and CEO, is the only non-independent director.

Shareholder engagement

In line with our commitment to open communication and transparency, we have a robust shareholder engagement process. These communications promote valuable discussion on various corporate governance issues and provide an open forum to share perspectives on our policies and practices.

Business practices

Ethical behavior is the backbone of our company culture. The business of providing employee benefits requires nothing less than for us to operate consistently, and to compassionately and fairly meet the needs of our customers during difficult times of their lives.

Code of conduct

Our code of conduct is designed to maximize transparency and foster an environment of openness, accountability and integrity. It guides our employees on how to abide by the company's principles and access the resources available to address any ethical issues that arise. Annual training is required for all employees.

Privacy and information security

Protecting the confidentiality of customer information is a responsibility we take seriously. We protect the data entrusted to us by our customers through physical, electronic and procedural safeguards, and we continually evaluate and enhance our systems and processes to help ensure the availability, integrity and accuracy of company assets, customer data and personally identifiable information.

Learn More About Our Policies

Regulatory compliance

Unum is subject to regulations and guidelines from the U.S. Securities and Exchange Commission and other federal and state agencies in the U.S. and Europe. To meet the requirements of these agencies, we have a robust internal system designed to aid us with compliance with applicable laws and regulations, and to ensure we accurately represent our product and service offerings to customers and shareholders. We provide financial data, information about our business operations, details of our executive compensation and other key facts investors have a right to know.

Risk management

As an insurer that helps millions of people gain affordable access to financial protection benefits at the workplace, risk management is essential to our ability to meet the needs of our customers while maintaining and growing our business. In addition to our Executive Risk Management Committee that manages our overall risk profile, we believe risk management must be the responsibility of all employees. We've established a culture that supports candid discussion and reporting of risks while empowering our employees to take ownership of risk management.

Risk Management Overview

The Executive Risk Management Committee...

  • Monitors, evaluates and recommends to the board capital and financing plans, activities, requirements and opportunities.
  • Oversees implementation of and compliance with investment strategies, guidelines and policies.
  • Authorizes loans and investments of the company.
  • Reviews, assesses and reports on the impact of various finance activities on our debt ratings.
  • Monitors, evaluates and makes recommendations regarding matters pertaining to our business segments no longer actively marketed, including the long-term care business, that could have a meaningful impact upon any of the matters for which the Executive Risk Management Committee has oversight responsibility.

Investment strategy

Investment activities are an integral part of our business, and profitability is significantly affected by investment results. Our overall investment philosophy is to invest in a portfolio of high-quality assets that provide returns consistent with those assumed in the pricing of our insurance products. To learn more about how we manage our invested assets and cash flow, refer to Page 10 of our latest 10-K SEC filing.

Unum privacy statement

Unum is committed to protecting the confidentiality of any personal information you provide. To view our privacy statement please visit unum.com/privacy.

View the Unum privacy statement