The view from Istanbul – Turkey

CRE: What are the biggest risks your organisation faces over the next three years and why? Aysan Sinanlioglu: The risks are those related to the macroeconomic environment, whether they be global or at the local economy level. At the Group level, we closely monitor our foreign exchange and interest rate risks. CRE: Do CEOs and boards generally take risk management seriously and understand the benefits, or is it a tick box/compliance function?hideAS: At Dogus Holding yes, they do take risk management seriously. Every two months the individual sector company and what we refer to as the Holding Risk functions present their analysis and risk-related issues to the respective risk and audit committees for discussion. From there matters are escalated to the board of directors meetings when necessary. There is a risk presentation and discussion at the board meetings that covers risk issues at the Group level as well as at the individual sector company level. CRE: How can risk managers ensure that risk management is properly carried out at line manager level throughout a group and in overseas locations? How can it be truly embedded in a global corporation? AS: At our company there is a governance structure in place that includes a risk and audit committee that reports to the board of directors. Each sector company has a designated team responsible for risk that performs scheduled and ad-hoc activities including risk analysis and reporting as directed by the Holding Risk function. Holding Risk also provides expertise on specialty subjects as needed. Risk functions operate under an enterprise risk management structure that encompasses financial and strategic risks as well as operational and emerging risks. Plus, there are top-down and bottom-up risk identification processes in place. CRE: Would the creation of a globally recognised, formal risk management qualification help convince senior management of the value of the function and raise the influence of the risk manager? AS: It would help draw a line in the sand as far as the basic skills of risk professionals go. There are a growing number of university courses and programmes on risk management, yet, as of now, most risk management staff come from consulting and/or auditing backgrounds. It would also help to establish a common language of risk management. CRE: Should the risk manager of a global corporation also be in charge of insurance management or should the functions be split? AS: I think one would need to consider the complexity and size of a company to make such a decision. A manufacturing company that produces similar product lines in multiple global locations might benefit from specialised skills to manage the entire risk and insurance centrally in-house. Otherwise, partnering with, and effectively managing, a broker and prudent discussions with each company executive team and keeping a Group-level view in an aggregated approach may do the trick. We think we do a decent job facilitating and coordinating the process. CRE: Are you happy with the coverage offered for cross border risks? AS: Our Group continues to expand both inside and outside the Turkish borders. And, naturally, so do our insurance needs. Our marinas in Greece and Croatia and restaurants around the globe, as well as big construction projects in the Middle East and Central and Eastern Europe, have been adequately insured with due consideration and effective management of cross border risks. Where there is international exposure I do not foresee any limitiations in securing the insurance we need. We are able to insure our risks. CRE: Is it time to end the annual renewal process, as some say it maintains a short-term, commoditised approach to the business of insurance? AS: As of now the bulk of our programmes renew annually. I have been through this process only once, and even that was not a complete renewal cycle, so it is hard for me to say anything conclusive at this time. Nonetheless at Dogus we view our risks—existing and emerging—in a longer time horizon and, equally, we view how and with whom we insure prudently.

The view from Istanbul – Turkey

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