Enterprise Risk Management in Non Financial Institutions - ATEL Conference
Andrew Nord and Vincent Galand were invited to make a presentation to the Enterprise Risk Management in Non Financial Institutions Conference held on 12 November 2009 and hosted by ATEL and PRMIA in Luxembourg. The theme of the conference was recent developments in Enterprise Risk Management (ERM). In addition to the avantage presentations, Mr Francois Masquelier of the RTL group spoke of the role of the Treasury in ERM, Christian van Nedervelde (SES) spoke of the changing role of internal audit in ERM, and Mr Patrick Claude (ArcelorMittal) spoke of how to develop and mature risk management in non financial institutions.
At avantage we have noticed a discernible trend for clients (whether financial or non financial institutions) to seek ways of improving their governance and risk management processes. This interest is a result of internal and external stakeholders requiring management to respond to the financial crisis and volatile market(s) in which they operate. At the conference, Andrew spoke of the need to more clearly link risk governance and infrastructure to the strategic objectives (what the company are aiming for) to the strategies (how management intend to achieve that vision). He explained that this is typically done through linking risk assessment (captured in a risk register) to the business planning and budget setting process.
In addition there is a growing trend for regulators to expect more by way of narrative reporting on risk, including additional detail around the business model which builds on the understanding of an enterprise's business objectives, strategies and operations and is useful in articulating the risks it chooses to accept and risks it chooses to avoid in creating value.
The avantage presentation also looked drivers for the stakeholders - as identified in a generic business model. Notably the role institutional shareholders have to make more effective the "comply or explain" principle that is embedded in most European Union Member State codes on corporate governance; of the focus rating agencies and financial analysts are putting on ERM practices (from the perspective of understanding senior managements involvement on risk issues), of candidates (and the intense focus on linking remuneration to risk adjusted metrics and a multi-year time horizon on which variable component of remuneration should be paid); and of customers (and their perception of loss events and the lasting impact this can have to an enterprises reputation, being a risk that will have an impact long after the effects of the credit crisis has past).
You can download a copy of Andrew Nord and Vincent Galand's presentation here.
Copies of the other presentations can be found on the ATEL website.
