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.
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