Willaert urges risk managers to embrace professionalisation

Outgoing Ferma president Jo Willaert believes the risk management community needs to rapidly professionalise and shed its association with insurance if it is to become the board’s go-to adviser on risk.

In the four years since Mr Willaert became president of Ferma, digitalisation and advances in technology have helped change the risk landscape at an accelerated pace. This has had a profound effect on how risk is perceived by the board and the role of the risk manager, according to Mr Willaert.

“In the four years I have been Ferma’s president, the role of the risk manager has expanded as risk has risen to become a crucial issue for the c-suite. Risk and the role of the risk manager have never been as important as they are today,” he told Commercial Risk Europe.

While awareness of risk has increased, the risk management profession has yet to fulfil its full potential, according to Mr Willaert, who will step down as Ferma president at its forum in Berlin this week. His replacement is Dirk Wegener.

“Every company now considers managing risk an important issue. Four to five years ago, this was only true for multinational and the largest companies, but now smaller and mid-sized companies are interested in risk. However, risk managers are still widely perceived as technicians, and are not viewed as providers of support and advice to the board in the way legal and audit are. When talking about risk, risk managers are still too often seen in the context of insurance,” said Mr Willaert.

Even for companies with sophisticated risk management, the association with insurance is hard to break, he continued. “At the end of the day, even when a senior risk manager comes to the board with ideas, you can see in their eyes that they see a person that pays premiums, avoids incidents and claims. They still see you in terms of insurance,” Mr Willaert said.

He added that risk managers are often brought in too late during strategy planning or a corporate project, when minds are already closed and preconceptions have taken hold.

“Risk managers are usually only involved when thoughts turn to financial exposures and insurance – but by then a project has gone too far. If the risk manager is involved at the beginning of a project, minds are still exploring and advice will be taken in an objective way. When they join late, people are already familiarised and it becomes difficult to say the risks are too big or that things could be done differently,” he said.

New risks are one of the biggest challenges facing companies today, continued Mr Willaert. “The consequences of constantly dealing with new risks are frankly frightening. However, risk managers should able to cope with new risks and be in a position to advise the board accordingly. This for me was one of the biggest changes of my presidency,” he said.

One of the most notable new risks is artificial intelligence (AI), which is increasingly finding uses in autonomous vehicles and industrial robots, as well as advanced data analytics and virtual robots used in medicine, banking, retail and professional services.

“AI is typically thought of as a technical issue for manufacturers and engineers, but is not seen as an issue for risk managers, who tend to deal with risks that are existing and known. Risk managers are often not comfortable dealing with new risks and board members do not typically first think of risk managers when confronted with such issues,” said Mr Willaert.

AI is a key risk topic for Ferma. It has responded to a proposed approach to AI and robotics by the European Commission, and has just published a study entitled Artificial Intelligence Applied to Risk Management. The study is based on the work of an expert group established by Ferma to look into AI. The group is working to understand how risk managers can be key advisers to senior management on the opportunities and challenges of AI technologies, including the ethical implications.

Despite the challenges, Mr Willaert is optimistic about the future to the risk management profession. “Things are changing. Board-level awareness of risk is growing and companies face growing requirements to report on risk. And when I look back over the past four years, I see that we as a profession have made a lot of progress. But we need to consider ourselves as risk managers, and not insurance managers. There are similarities but they are different roles,” said Mr Willaert.

The themes of Mr Willaert’s presidency have been leadership, communication and education. These themes are just as relevant today as they were in 2015. In particular, recognised qualifications are essential if risk managers are to gain recognition at board level, argues Mr Willaert. “When you look at legal and audit, they hold recognised qualifications, but such qualifications are lacking in the non-financial world. However, in the past four years there has been a big push with risk management education, training and qualifications,” he said.

When Mr Willaert became president, Ferma had not long launched rimap, the first ever European certification in risk management. Today, 173 risk managers are rimap-certified and the number continues to grow, gradually but steadily. “My most important piece of advice is to obtain qualifications at a European level – to get the rimap certification. If we all are qualified, I am sure that risk managers will be recognised by the board within the next two to three years,” said Mr Willaert.

However, qualifications, training and experience are just the basic skills for today’s risk manager. They also need to understand the culture of their own organisation and be able to communicate effectively with the board, colleagues and other stakeholders, according to Mr Willaert. “You need to have authority and access to the people above you and on the shop floor. For that, there is only one skill – to listen. For every five minutes of speaking there should be 15 minutes of listening,” he said.

Mr Willaert believes it is the responsibility of the entire risk management community, including brokers, insurers and service providers, to get involved. “We have made significant steps along our journey to a world where risk management is embedded in the business model and culture of European organisations. But we are only at the start of a growing market for risk management and we need the support of the whole risk community,” he said.

“We have momentum with the growing need for risk management but if we do not take this opportunity, others will take our place. For my generation, risk management was not well known and there was little or no training and qualifications. But now there are high-level studies in risk management and we see more and more people attracted to the profession who make an active choice to pursue a career in risk management,” said Mr Willaert.

After four years as president, Mr Willaert regrets he will not be as actively involved in work that will lead risk management to its full potential. “After my career in risk management and my time as a Ferma board member and president, I still believe that risk managers are among those who contribute discretely but with passion to the success of our organisations and the future of Europe,” he said.

To view a pdf version of our Ferma Forum day 1 newspaper click here