The Federation of European Risk Management Associations (FERMA) has told the EC it should enforce existing EU corporate governance rules on risk management rather than creating new ones.
FERMA’s comment is a response to the EC’s Green Paper on the corporate governance framework.
In its response FERMA argued that board duty on risk management and risk disclosure overlaps the EU Eighth Company Law Directive which has yet to be fully harmonised across the EU.
According to FERMA the implementation of the Eighth Directive should be fully analysed “before the Commission takes any further action to regulate this duty.”
FERMA also reiterated its support for the goals within the directive which include the proposal to use risk management as a real tool for decision-making rather than as an additional element of internal control and, to ensure that the board properly oversees the risk management process and sets company-wide policy.
The federation also opposes the EC’s suggestion that companies should publish more information about risk management because “it may harm companies’ competitive position, it will not improve their risk management culture and it will not provide more assurance to stakeholders that risks are under control”.
FERMA brings together 19 national risk management associations in 17 European countries and represents a wide range of business sectors from major industrial and commercial companies to financial institutions and local government organisations.