Norfolk Southern recognizes that the company’s long-term sustainability is connected with identifying and managing risks that could affect business outcomes — both negatively and positively.

The company’s board of directors is responsible for the oversight of risk management efforts. The board works with management to set corporate objectives around risk management, and management implements a program based on these objectives.

The board’s governance and nominating committee has been delegated authority to recommend procedures for risk oversight. This committee assigns oversight responsibilities for specific risks to the board and the board’s committees. In addition, in accordance with applicable regulations and its charter, the audit committee periodically considers the corporation’s major risks and impacts involving finances, financial reporting, and fraud. Finally, the compensation committee considers the corporation’s major compensation-related risks.

Management provides presentations, information, and updates on risk management efforts as requested by the board or board committees. In addition, the board or its committees may conduct additional risk assessments at any time, and each committee is empowered to engage outside advisors as needed to assist in performing its risk management duties.

Norfolk Southern’s 2014 annual report identifies 14 categories of risks that could have financial impacts on the railroad’s business. These risk factors include, in no order, governmental regulation and legislation over commercial, operating, and environmental matters; government-mandated transport of hazardous materials; climate change legislation or regulation; energy prices; technology and technology improvements; the state of capital markets; severe weather resulting in business interruptions and expenditures; competition from other transportation providers; and disruption of operations caused by unionized rail worker strikes or work stoppages.

Compliance with Antitrust Laws

U.S. antitrust laws, enacted to promote free and fair competition, regulate what Norfolk Southern and employees can do when acting alone or with competitors. In 2014, there were no findings of antitrust violations by Norfolk Southern.

The 2014 performance is consistent with company policy to comply fully with all applicable federal and state antitrust laws. No officer or employee is permitted or authorized to take any action inconsistent with the antitrust laws or to permit or order others to take such action. In fact, in the 33 years since the company’s 1982 incorporation, there has never been a finding of an antitrust violation by Norfolk Southern.