On the English version of its Web site, The Russian Risk Management Society, or RusRisk, says its mission is to "increase business stability in Russia" by promoting risk management. It's a challenge in any part of the world, but particularly in a nascent democracy and market economy such as in Russia. Victor Vereshchagin, president of RusRisk is apparently up to the task.

Q: To what degree do Russian companies practice risk management?

A: I think the practice of risk management in Russia started only a few years ago, because we had no real market economy before the financial crisis in 1998. We know that financial institutions—banks and other structures—are developing risk management practices, because they have had good cooperation with foreign banks and foreign institutions. They have specific instruments for financial risk management. We are trying to develop risk management in the non-financial sectors, because Russian companies and enterprises did not practice risk management before.

Q: How is RusRisk trying to build awareness of risk management?

A: We are trying to develop knowledge about risk management, not only among private companies, but also in governmental structures and public organizations. We are also trying to organize training and the certification of risk management [practitioners], both individuals and companies. We actively participate in the conferences and seminars of other [risk management] federations. We cooperate with national associations in Europe, Asia and Africa.

Q: Is RusRisk recommending that risk managers follow one of the general standards?

A: We are continuing that discussion. We created a working group and we are trying to create a list of rules for enterprise risk management activities. Maybe the final goal will be the creation of a Russian version of enterprise risk management or another standard. A few of my colleagues suggest a mixed variant between ISO (International Organization of Standardization) for risk management and a list of [our own] recommendations or rules for risk management practices.

Q: What are the top three risks facing Russian businesses?

A: First is the political risk, because we need political stability and rules for business activity. The second is legislative risk, because we do not have enough laws about risk management activity and technical security of Russian enterprises. The third is the risk of corruption and bureaucracy in Russian establishments on various levels: federal, regional and municipal.

Q: How do you manage these risks?

A: Corruption? This has been a big problem over a long time. It is a pity, but these traditions exist in Russia, but not only in Russia: In Europe, the United States, and Canada. [As for] political stabilization ... we have little experience in this... we are just now creating the new traditions in internal policy. Russia's market economy is also new. A main part of this [transition] process is risk management, because we know a lot of Russian entrepreneurs and directors of large and medium-sized enterprises who do not know the role of risk management in business.

Q: Does the Russian insurance market offer adequate capacity and insurance coverage for companies?

A: The market capacity is still insufficient to cover major risks in full. So the major Russian insurance companies are working closely with the international reinsurance market. Actually, we consider that insurance is one of the most important tools of risk management. In general, [the insurance industry] should play a very substantial role in promoting risk management philosophy in Russia.

Q: Do risk managers benefit from the presence of foreign insurers entering the market?

A: This is developing. New foreign insurance companies are coming to Russia, as well as some international reinsurers. Their services not only include the core business of risk-taking, but these companies also are providers of additional services to their customers, which steer them toward better risk management.

Q: What are some of the short term goals you are trying to accomplish?

A: We have a few goals. First of all, we want to see the better use of risk management activities and practices; the creation of standards of risk management, and the third is maybe integration [of Russia] toward the European and world risk management community.

Founded in 2003, RusRisk is Russia's first national non-commercial association bringing together managers from industry, as well as insurers, reinsurers and other sectors of the Russian economy. The group has more than 50 members, both corporate and individual members, including insurance companies, broker firms, consulting and investment companies. Mr. Vereshchagin, who comes from an academic background, also serves as deputy general of the Russian Union of Industrialists and Entrepreneurs, an independent public organization that represents business interests. He is also deputy general director of the Russian Union's Expert Institute.