Pragmatism & business attitude key to boosting risk profession–France

Those that took part in the European Risk Frontiers survey also pointed out that boards are becoming increasingly aware of the importance of risk management, but noted there is still some work to do to fully realise the function’s potential. To help develop their profession, risk managers must be flexible, pragmatic and highlight the value that they add to their organisations. Professional bodies such as AMRAE, France’s risk management association, have an important role to play in this process, they said. “Risk managers should have a business partner attitude, working close to the operational people, understanding their ecosystem and objectives,” said Sophie Mauvieux, a member of AMRAE’s Scientific Committee and the Group Risk & Insurance Manager at IT security group GEMALTO. “This is how we can better disseminate an ERM approach and influence towards a more ingrained risk management factor in decision-making.”hideTo gain influence, risk managers must show that their job is not to prevent business from taking place but rather that risks taken by a company will lead to successful outcomes. “The added value provided by risk management comes from our ability to build ERM programmes that are pragmatic, flexible and tailor-made to the characteristics of the company,” said Ms Mauvieux. “It will thus support the development and performance of our respective corporations. What we must not do is to push for a dogmatic, linear and systematic approach towards compliance.” It is crucial that risk managers have enough influence within their organisations to ensure their voices are heard when it matters. “The position of risk managers in their companies should be adequate to provide them with legitimacy and the ability to influence those with power,” said AMRAE vice-president Marc de Pommereau. “Depending on the organisation, it could be in the finance, legal or operational departments. Reporting should definitely be at the C-suite level.” “Risk managers must work closely with the CEO or the CFO in order to be implicated in strategic issues,” remarked François Malan, a member of AMRAE’s board and Head of Risk Management at real estate management and development group Nexity. “We need to be as close as possible to the top management of the company, as much as, for example, auditors are. Risk management and internal audit must be at the same hierarchical level within the company. It is not yet the case, but it is something that will happen in the future.” He added: “Boards are beginning to realise the added value provided by risk management. But we have not fully arrived there yet. We still need to make efforts to communicate the fact that risk management is not a brake to business, but a function that adds value to the company.” The implementation of risk management and the consolidation of its function varies company by company, the participants of the survey said. Some firms are more advanced than others and much work still needs to be done in order to push risk management forward in France. “My company’s board definitely understands the value of active ERM,” Ms Mauvieux remarked. “It is interested in the topic and regularly asks for ERM to be put on the agenda of the meetings of the board or the audit committee.” “This understanding is increasing, particularly in major companies,” said Gilbert Canameras, president of AMRAE and Head of Financing and Risk Management at mining and metallurgy company ERAMET. “Among SMEs there is a need to enhance the knowledge of the value of risk management through education, training programmes and communication. Director associations provide a good channel for us to achieve this goal.” “It is difficult to make generalisations,” pointed out Michel Blanc, a member of AMRAE’s board and the risk manager at chemical multinational group ARKEMA. “In our company we created a risk committee three years ago, composed of three out of eight members of the executive board. It shows that there is a lot of interest in the subject and that the executive board has taken responsibility for it.” The risky economic environment of recent years has helped the profession to develop, but legal changes have also contributed to the process. “A law has been passed that demands that companies’ official documents give a bigger dimension to risk reports,” Mr Blanc said. “This has helped to make sure that risks are taken very seriously by groups. The law has already created much more work for us and more could be done in the future to drive risk management.” He added: “I am attached to the general manager in charge of strategy. As a result I work closely with the executive board of the group. The most important thing is that the risk department is in a high enough position to have access to the executive board, and that the recommendations that come from the risk management and insurance sectors can be acted upon.” The best position for the risk management department depends on the organisation and the size of company, Mr De Pommereau said. “Each company is differently organised. Some are huge, while others are not so big. In any case, the risk manager must be placed close to the board of directors. He should report either to the CEO or the CFO. Proximity to the CFO, for instance, can be of much use when the time comes to transferring risks to the insurance market.” But gaining such an eminent position for risk managers often requires hard work. Risk managers must make sure that their efforts are noticed. “Nowadays boards of directors are more convinced of the need for having a risk management process in place. We have arrived at a state where everybody must have a view on what risk management entails. But risk managers have to deliver to the board clear and prospective results of ERM,” added Mr De Pommereau, who is also the head of Insurance at GDF Suez Energy Services. “In particular, it is necessary to show them in a clear way the results of risk mapping exercises. Then risk managers can convince the board about the interest of implementing risk management and the value that it can add to the strategic thinking of the company. It is important to show how risk management is building links between the various pillars of the strategic analysis performed by the company.” A relative lack of knowledge among some businesses about the work carried out by risk managers makes this job difficult and increases the need for the function to communicate with other parts of the company. “We have to explain our job to other kinds of professionals,” Mr Malan said. “Often, human resources are not well aware of what risk managers do, and the same goes for financial departments. It is a recent function and the risk manager, despite the title, is not the person who owns the risks. People often mix things up and believe that risk managers will actually manage their risks. But the reality is that risk managers are the professionals who drive risk management processes forward, but not the actual owners of the risks.”

Pragmatism & business attitude key to boosting risk profession–France

Want to read this article?

Read Next

Risk managers want software providers to integrate more AI tools

Court says German government must tighten up climate protection

Alternative solutions and specialty drive Scor’s Q1 growth

AXA XL names new client and distribution officer in APAC and Europe

Costs rapidly rising for employee health insurance in Portugal

Risk managers want software providers to integrate more AI tools

Court says German government must tighten up climate protection

Alternative solutions and specialty drive Scor’s Q1 growth

AXA XL names new client and distribution officer in APAC and Europe

Costs rapidly rising for employee health insurance in Portugal

Want to read this article?

Read Next

Risk managers want software providers to integrate more AI tools

Court says German government must tighten up climate protection

Alternative solutions and specialty drive Scor’s Q1 growth

AXA XL names new client and distribution officer in APAC and Europe

Costs rapidly rising for employee health insurance in Portugal

Related Articles