French risk managers urged to help build new social contract as the world transforms

French risk and insurance managers must step up their efforts to explain the value they offer to the c-suite in simple terms, as the global economy enters a new phase of volatility that demands a much more cohesive and socially inclusive approach to business than the past, according to Brigitte Bouquot, president of French risk management association AMRAE. Ms Bouquot believes that the rise of trade wars and conflict between leading nations, coupled with increased social and political unrest often leading to violence, shows that the old nation-state structure can no longer be relied upon to deliver what individuals and society as a whole want and need. Many global businesses are now bigger and more powerful than nation states themselves. This means that business leaders in France and elsewhere need to accept their broader social and political responsibility. They need to take a more holistic, risk-managed approach, rather than just focusing on delivering profit for shareholders and ignoring wider social and political implications of their actions. The rise of corporate and social responsibility (CSR) and the push for more sustainable business models needs to be supported by the risk management community, according to Ms Bouquot, who is also director of risk management and insurance at Thales. Individual risk managers must equip themselves to play a central role in this effort to help deliver a more joined-up approach to the world’s challenges, not least climate change, she told Commercial Risk Europe. “There is a big shift occurring in France and worldwide that will require a change of mindset at c-suite level. One can argue that this is a European model whereby the culture demands the company should take care of social risk and be more inclusive. There is a responsibility attached to doing business. At the same time, there has been a change in the way we manage risk because of the rise of corporate social responsibility,” said Ms Bouquot. “This is a long-term journey and risk managers need to be involved in the strategy. Companies want to include young people and risk management needs to be explained to them. Companies are still working on CSR and much of this is to ensure that there is the right level of scrutiny of risk within the value chain and between the company and its stakeholders,” she continued. Ms Bouquot believes the risk landscape changed in 2019, and the French and wider European risk management community needs to react and adapt. “The landscape has changed because of political risks. Powerful states are no longer aligned within the global framework. We see a trade war between the US and China, we have gone through the Brexit story and only in December we saw the strikes across France because of attempts to change the pension system. There is a real concern about long-term prosperity in the new world and how to protect society from market risk. Nation states do not always have the answers to these important questions and need the support of business to come up with solutions,” said Ms Bouquot. AMRAE’s president pointed out that often, multinational companies are actually bigger and more powerful than nation states. They are also becoming more politically active than in the past, she added. This means that political risk has risen rapidly up the corporate agenda and a new balance of “common interests” needs to be found for all, said the risk manager. “You cannot do business as if you are alone in the world. Companies, nations and society as a whole can be hit by trade wars and we need to find a new global framework to manage this risk collectively. The level of risk understanding needs to be improved and the needs of society need to be met,” she explained. The huge risks that are faced by society and business – such as climate change, political volatility, cyber risk and, of course, pandemics – need to be tackled in a joined-up and fair manner, according to Ms Bouquot. “The political world has to understand the risks to issue helpful, progressive and fair solutions to ensure the delivery of services, and business should support it in doing so. We are facing urgent topics such as climate change and cyber, and this all requires cooperation between the nation state and business to ensure that resilient and fair solutions are found, rather just ways to make more money,” she added.

French risk managers urged to help build new social contract as the world transforms

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