Risk gospel must spread out as well as up–AMRAE

During the event, risk managers at some of the largest French groups shared their experience on the use of techniques like marketing and communication strategies to increase awareness about risk. Frédéric Desitter, the Chief Risk Officer at Aéroports de Paris, the airport management company, stressed that it is necessary to ‘convince rather than constrain’ employees of all levels that risk factors must be taken into account in their daily jobs. Mr. Desitter heads a network of 34 risk management coordinators spread around the company and makes use of marketing techniques to spread awareness of the subject. The CEO and the Executive committee of Aéroports de Paris are official sponsors of the risk management programme. Publications on the issue are distributed to the firm's staff, and emphasis is given to the performance of the units in management of their risks, rather than simple compliance to risk management rules. “All managers need to become risk managers,” he said.hideThe culture of risk has already arrived at the firm to the point that, today, all investment plans must identify the risks that may be created and how they will be mitigated, Mr. Desitter said. “But we still have room for improvement,” he concluded. Michel Dennery, French Director at FERMA and Enterprise Risk Management Director at GDF SUEZ, stressed the importance of proper risk mapping. Risk maps are a tool that, in his view, carries out for risk management the same role that accounting plays for finance. Mr. Dennery also said that risk managers must be creative and have a free spirit, because they often have to rely on their own judgement to make the right decisions. "Risk managers must not trust all that they are told...and cross-check different points of view: operational, legal and reputational,” he said. “And we have to be suspicious of those risk factors that we are more confident about,” he added. Mr. Dennery noted that the oil industry had the reputation of boasting some of the best industrial risk management practices before the BP oil spill in the Gulf of Mexico, and that risk management was seen as a major strength of the financial sector until the débâcle of Lehman Brothers in 2008. At Areva, the nuclear firm, a set of procedures has been created to deal with the particular issue of ethics risks, as explained by Olivier Loubière, the firm's Business Ethics advisor. Areva uses an approach whereby the main columns comprise issues like respect for competition, the notion of human rights in business and the prevention of conflicts of interests, which Mr. Loubière has qualified as a major threat to the social cohesion of an organisation. Another important element in the case of a firm like Areva is the adoption of nuclear non-proliferation principles. Breaches of the company's ethical code could embroil the company in an international crisis, he pointed out. Areva has a system of internal reporting that is used to increase the likelihood that ethical slips come to the knowledge of compliance officers and that red flags, both in the company and in competition, are spotted and dealt with, Mr. Loubière said. He also noted that, for ethical risk to be properly managed, top managers must insist on its significance at every possible occasion. “It is necessary to stress it and to repeat it,” he stated. Pierre Rodocanachi, a member of the supervisory board at Vivendi, the media group, told delegates that his company makes it clear to staff that risk taking is also an essential element of the success of a business. In his company, he said, managers are incentivised to act boldly by a bonus system under which two thirds of the value is linked to the performance of their units. Another third is linked to decisions they have taken that were intended to achieve specific risk-related objectives. Mr. Rodocanachi said that Vivendi has yielded some very good results by not being afraid of taking risks, such as its acquisition of Canal Plus, its pay TV subsidiary and its purchase of the TV rights for Ligue 1, the French football league, a deal that currently amounts to about €460m a year, according to media reports. On the other hand, he said, the perception of excessive levels of risk convinced the supervisory board not to recommend the acquisition of Pages Jaunes, an online yellow pages service, in 2006. “We probably regret that decision today,” Mr. Rodocanachi told the conference.

Risk gospel must spread out as well as up–AMRAE

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