Time to raise the bar?

BN: What was discussed at the president’s meeting on certification for risk managers? Why is it an issue on FERMA’s agenda? PT: We discussed the notion of what we should be doing in the future in terms of certification for risk managers. And one of the challenges for us in the risk management community is our future position as professionals. If we look at many of the professions that we work alongside—chartered accountants, lawyers and engineers for example—they have recognised qualifications. We as risk managers have nothing like that. So this is an undefined profession at this stage and that is really the starting point for our discussions. In five to 10 years time it would be nice to think that risk management is a recognised profession alongside those that I mentioned. I think it is important that we start to think about that as a community of risk managers. And maybe we should move towards some form of accreditation and recognition for our profession similar to the law and accountancy. BN: So is this an effort to gain recognition, raise the profile of the profession and further develop the industry?hidePT: Yes, absolutely. It links very well to the idea of the development of the risk management profession and of gaining recognition for the professionals involved. Many risk managers will have professional certification or qualifications linked to an established professional discipline. They may be lawyers, accountants, or engineers. But if you talk to a chief financial officer or a chief executive they will know what a chartered accountant is, what a chartered engineer is and recognise legal professional qualifications. But ask them if they know what IRM, ARM, CII qualifications are and they will probably just look blank. So that is where we are today. You could also say that this situation is fine for where we are today because this is a developing profession, and you could be right. But it does need, I think, some proper recognition at some stage. Let’s take an example: A finance director wants to recruit a seasoned and competent risk manager. When he or she discusses the job specifications and the candidate profile, what will they conclude in terms of professional qualifications? Probably the ones that they know. As I have said already, this is not generally the qualifications that we know. This creates a potential problem for risk managers. BN: Who exactly should be involved to help further this discussion and potentially create some form of accreditation in future? PT: I think it would be good if the risk management associations and organisations, that we in the business recognise today, are involved in that. So that it is not suddenly tacked onto something like a financial institute or something similar. The challenge will be to find the right organisations that are ready to work together. BN: What potential options are there for you and what exactly does FERMA plan to do on this issue? PT: The options are wide open at this stage. The professional certifications that I have encountered include academic qualifications, professional experience, and ongoing professional development. We could try to create some form of organisation that builds on recognition from existing qualifications. Existing independent diplomas, university courses and MBA courses might form a large part of that. But you will also need professional development and professional experience built in. This might quite radically transform some of the existing education and trade organisations as they stand currently. The transformation might take the form of alliances. And, to be frank, I do not know what the implications are for all this yet and I do not think any of us do. So I have a group of people, within FERMA, who are willing to act as a kind of think tank and put together some ideas on this and see what the opportunities are. But also investigate some of the pitfalls and risks. And, at the end of the day, this may not fly. We may come to the conclusion that this is an area that is too complex for us to get into at this stage. Or we may find we develop some alliances with other organisation on which we can start to build and look to the future. BN: Do you envisage a pan-European qualification? Would that be desirable? PT: That would be nice but we do not know if it is feasible. I know for instance in the engineering profession you can be a chartered engineer in the UK and you can also have a European qualification which is called a Euro Engineer. Could that work in the risk management profession? But, of course, under the umbrella of FERMA we are looking throughout Europe, as far east as Russia. And there are some countries that want to move quite quickly in this direction. So there could be pockets within Europe that take off before others. BN: And do you think there is an appetite for all this and how feasible do you think it is? PT: We need a critical mass of people speaking up within an association to do that and a willingness of the members to move in that direction. I did a quick straw poll of risk managers at the recent FERMA conference and about 50% said they were interested. But for some people it is not even on their agenda at this stage. One manager commented that he already had a hard time maintaining his professional development training within his own profession so would not welcome additional requirements as a certified risk manager. There is a good comparison at the moment with the Institute of Internal Auditors. They are much more organised worldwide than we are and they have some sort of recognition in terms of qualifications. And the UK’s Institute of Internal Auditors has recently become a chartered institute which gives them a lot better recognition. So it can be done. But, as I said, my motivation in this, as well as the fact that I think we do need to do something, is just to see what interest there is. BN: It certainly seems to be something that would appeal to younger risk managers who enter the profession and look forward to a risk-based career? PT: For young people coming through they might very well be able to see the merits of such a qualification and the benefits it would bring them in terms of recognition. A graduate with a degree in risk management from university may well want to have a risk management professional recognition. They are likely to become professional risk managers and will not have other professional qualifications and the need to keep up career development points to other areas. So, for those kinds of people coming through now it may well be an interesting concept. Mr Taylor was keen to invite any risk managers or risk professionals who wish to become involved with this initiative, or have any ideas or comments to make, to contact him directly. Mr Taylor is contactable via the FERMA email: info@ferma.eu

Time to raise the bar?

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