WHERE WE ARE 22 member associations in 20 countries Over 4300 individual members who are responsible for risk management and/or insurance in their organisations

OUR MEMBER ASSOCIATIONS

Our Purpose Co-ordinate, promote and support the development and use of risk management, insurance and risk financing in Europe Be a significant stakeholder in the decision making process at the European level on risk management, insurance and risk financing Leading risk management and insurance across Europe

Top Mitigation levelSatisfaction level 1. Political – Government intervention, legal & regulatory changes 2. Reputation and brand 3. Compliance with regulation and legislation 4.Competition n.c* 5.Economic n.c* 6. Market strategy, client n.c* 7. Planning and execution of strategy 8. Human resources / key people, social security (labour) 9. Quality (design, safety & liability of products & services) 10. Debt, cash flow n.c* THE FERMA RISK 2014 MAP High MediumLow *n.c not comparable

The Voice of European Risk and Insurance Managers European Risk and Insurance Report

Embedded activities Insurance management and claims handling and insurable loss prevention Development of risk maps Assistance to other functional areas in contract negotiation, project management, acquisitions and investments Design and implementation of risk controls / prevention Trend

Development and embedding of business continuity management Alignment and integration of risk management as part of business strategy Development and integration of risk culture across the organization PLANNED ACTIVITIES Trend

Reporting at Top Management level A strong interaction with Top Management / Board 48% of Risk Managers present RM activities several times a year Top 3 reporting lines RM functionIM function CFO22%31% Board of Directors18%12% CEO17%12% Widespread use of risk mapping

Reporting at CFO level 22% with sector variations Board of Directors/Supervisory Board level primary reporting line of the ‘Automotive’, ‘Banking and Financial Services’ sectors In small companies reporting to the Board of Directors / Supervisory Board most commonly shared practice Reporting at CEO level mostly observed in the ‘Healthcare’, ‘Pharmaceuticals’ and ‘Real Estate’ sectors CFOs REMAIN PRIMARY REPORTING LINE FOR RISK MANAGERS ACROSS EUROPE

Areas for reflection What is the right organisation for Risk fonctions?

Relationship between risk and other functions

Managing Assurance Whose job is it anyway? The IIA standard 2050 requires chief audit executives should share information and coordinate activities with other internal and external providers of assurance ….. to ensure proper coverage and minimise duplication of effort: yet….. – Assurance roles and responsibilities not clearly defined – Assurance functions reporting lines and not coordinated – Assurance functions have different objectives – Assurance functions do not base programmes on significant risks – Breadth of skills in many assurance functions is limited – Many assurance functions are not represented at "Top Management” and do not get heard – Assurance functions often accused of not working with management – Reporting dull and unconvincing – Box tickers not agents of opportunity or change

Managing risk whose job is it anyway? ► Risk management is fundamental to organizational control and critical to providing sound corporate governance ► It touches all of the organization’s activities ► The establishment of an effective enterprise-wide risk management system is a key responsibility of management and the board ► The board are responsible for adopting a holistic approach to the identification of organizational risks, creating controls to mitigate those risks, and monitoring and reviewing the identified risks and established controls ► The board should ensure that risk management is integrated into the organization, at both the strategic and operational levels

The 8 th EU Company Law Directive 1984 Conditions for approval of persons carrying out the statutory approval of accounting documents 2001 Enron influence globally 2003 Ahold and Parmalat influence in Europe 2010 – Article 41 Focus on good practice for oversight, responsibilities and relationships Wider adoption of the Three lines of Defence model 2014 – Directive 2014/56 Focus on external audit and non-financial information reporting Consequences for the board. internal auditors and risk managers

Risk and Audit Committee responsibilities 1.Review risk management systems 2.CRO or equivalent 3.External audit 4.Relationship and coordination 5.Report annually on the effectiveness and efficiency of risk management in the organization 6.Review annually the performance and terms of reference of the Committee in order to determine whether it is functioning effectively by reference to best practices 7.Oversee the integrity of the financial reporting process and financial reports 8.Review the efficiency of internal control and risk management systems 9.Review and appraise the audit activities: independence, objectivity and effectiveness of the audit process 10.Supervise the internal audit function Audit and Risk Committees News from EU Legislation and Best Practices Source: Audit and Risk Committees - News from EU Legislation and Best Practices 2014

THREE LINES OF DEFENSE Source: Audit and Risk Committees - News from EU Legislation and Best Practices 2014

FERMA Strategic Actions Focus for 2014 and 2015 Profession Innovation Diversity

FERMA Certification The aim is to certify the competence of Risk Managers Certification and Accreditation launched in parallel Certification application through online submission file review interview Certified Risk Managers will be part of an Alumni Longer long term two certification levels planned First Awards at the 2015 FERMA Forum FERMA will accept applications globally

The Profession of Risk Leaders ACCREDITATION: verifying that third-parties can demonstration its competence to carry out specific conformity assessment tasks CERTIFICATION: verifying that individual candidates have adequate credentials to practice the risk management discipline By the Certification Process FERMA will set up an standard to evaluate the candidate skills along with other pillar such as experience, ethics and CPD.

FERMA CERTIFICATION