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Corporate Governance & Risk Management - "FERMA to the EU : don't rush to make more rules"
 

Corporate Governance & Risk Management - "FERMA to the EU : don't rush to make more rules"

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FERMA will express concern to the European Commission that it is trying to develop more regulations on corporate governance and risk management too quickly.

FERMA will express concern to the European Commission that it is trying to develop more regulations on corporate governance and risk management too quickly.

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    Corporate Governance & Risk Management - "FERMA to the EU : don't rush to make more rules" Corporate Governance & Risk Management - "FERMA to the EU : don't rush to make more rules" Presentation Transcript

    • Corporate Governance& Risk Management -FERMA to the EuropeanCommission:“Don’t rush to makemore rules”
    • “On corporate governance and risk management, don’trush to make more rules” FERMA to tell Commission FERMA will express concern to the European Commission that it is trying to develop more regulations on corporate governance and risk management too quickly WHAT SHOULD THE COMMISSION DO INSTEAD? EXAMINE EXISTING ENFORCE THEM, LAWS TO MAKE SURE RATHER THAN RUSH THEY ARE TO CREATE NEW APPROPRIATE LEGISLATION
    • A shift in emphasis• What are the alternatives? Increased emphasis on implementation of the 8th Company Law Directive, which is in already in effect Focus on appropriate harmonisation of existing national corporate governance frameworks
    • FERMA’s response to the Commission’sgreen paper on corporate governance• What is the status? However, a flavour of The reply is in its final FERMA’s views emerged stages for submission at a roundtable held on later in July the eve of the general assembly in June
    • Who attended the roundtable? Marie-Gemma Dequae Former FERMA Chairman BOARD MEMBERS Marc Hertgen Policy Offices, Michel Dennery Corporate Governance and Deputy Chief Risk Social Officer , GDF Suez Responsibility Unit DG Internal Market
    • Implementing the 8th Directive Work to implement the 8th Directive, which deals with internal control, is not yet finished “We are keen to see the Commission leave time to do that first before moving on to the next stage of regulation” Michel Dennery Deputy Chief Risk Officer, GDF Suez
    • The Commission’s position• Marc Hertgen, Policy Offices, Corporate Governance and Social Responsibility Unit DG Internal Market commented: The Commission wants to start a longer term, cross-sector discussion on the evolution of corporate governance once the immediate emergency of the banking crisis is past The role of directors in managing risk is a key aspect of the green paper “For us, risk management involves a flow of enough information for an effective challenge to executive management from the board or shareholders”
    • Disclosure proposals Risk management is very different from risk management in industrial and services companies All sectors mustdisclose their financialrisks, and there should “Disclosing strategic risk, be no question of risk however, is very similar to taking with safety, revealing strategy. Companiessecurity and technical processes have for a long time made a lot of effort to communicate their strategy clearly to stakeholders and shareholders to get financial support for their development. The share price of a company is Michel Dennery directly linked to the trust in its Deputy Chief Risk strategy” Officer, GDF Suez
    • FERMA’s response to the green paper• Evolves from its work with the European Confederation of Institute of Internal Audit Auditing (ACIIA) on the risk management provisions of the 8th Directive FERMA has consistently stated that the board of directors has to approve and take responsibility for the company’s risk appetite Directors must make decisions on strategic opportunities and ensure that systems to manage downside risks within acceptable limits are effective
    • Future corporate governance for smallerbusinesses and unlisted companies FERMA follows ...although principles its thinking on of the regulation Solvency II... apply to all enterprises Their application should be PROPORTIONATE TO PROPORTIONATE TO THE SIZE OF THE THE RISK PROFILE OF BUSINESS THE BUSINESS
    • • The EU consultation paper is available at: http://ec.europa.eu/internal_market/consultations/2011/corporate -governance-framework_en.htm• The joint FERMA-ECIIA Guidance on the 8th Directive is available at: http://www.ferma.eu/Portals/2/documents/press_releases/201009 21-eciia-ferma-guidance-on-the-8th-eu-company-law-directive.pdf
    • FERMA Risk Management Forum 2011 www.ferma-forum.eu Stockholm Waterfront @FERMAFORUM2011 Congress Center 2-5 October 2011 “FERMA Risk Talk”