Devon methodically manages the risks to our business to ensure we can deliver results.
Devon's board of directors has primary responsibility for risk oversight, which includes determining whether the company’s risk-management programs are appropriately designed and implemented to address our material risks. The four standing board committees consider the risks inherent in their areas of oversight and report regularly to the full board. Our Devon management team is, in turn, responsible for executing the risk-management directives of the board and its committees, including overseeing and reporting on Devon’s day-to-day efforts to manage risk.
To identify and evaluate our business risks, Devon employs a variety of governance and analytical measures. Our enterprise risk-management (ERM) process, overseen by our internal audit function, includes an annual analysis of the top risks to the company. This analysis asks the board, management and internal subject-matter experts to consider the likelihood that certain risks could result in an economic or non-economic impact to the company and to identify our level of preparedness for those risks. Using the results of this analysis, the board and management determine and prioritize the material risks to our business. We also undertake exercises to identify risks and conduct workshops with Devon employees on risk-mitigation strategies. Designated employees within each business function are accountable for managing specific risks. For a more detailed discussion of the material risks of the company, please see our Annual Report on Form 10-K for the year ended Dec. 31, 2018.
Through our ongoing risk-management efforts, Devon has been able to adopt strategies and measures to address emerging risks. For example, in recognition of the increasing relevance of and stakeholder interest in climate-change risks, in 2018 we began formally considering the quantifiable effects of climate change on Devon’s portfolio. Our annual long-range planning and risk evaluation uses a scenario analysis of technology and market conditions that incorporates pricing conditions that are at least as challenging as the IEA (International Energy Agency) Sustainable Development Scenario and runs through at least 2040. For more information, please see our Climate Change Assessment Report.
Cybersecurity risk is another area of increasing focus for our board, particularly as more of our operations rely on digital technologies. To mitigate this risk, Devon has adopted an information security program that uses sophisticated technology and processes and is aligned with the National Institute of Standards and Technology Cybersecurity Framework for risk management. Our management team provides the Audit Committee and the full board with regular updates on this program, as well as on trends in cyberattack activities and other developments impacting our digital security.