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FERMA to review own governance

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BRUSSELS, Belgium—Streamlining the governance of the Federation of European Risk Management Assns. will be among the first orders of business for Marie-Gemma Dequae in her second term as the organization's president.

Since each association that joins FERMA has a representative on the board of directors, the federation has decided to examine how it is governed at its next board meeting in October, she said in an interview.

"The major reason is the increasing number of members in FERMA...and the goal is to reach good and transparent governance," said Ms. Dequae, who was re-elected at FERMA's June 13 board meeting.

New members

FERMA's constitution calls for elections to be held every year but it is customary for the president to serve the two years between the association's biennial forums. Ms. Dequae said she intends to serve the full two years.

At the board meeting, FERMA also approved two additional member associations, bringing the total number to 15. Joining the federation were PolRisk, the Polish risk management association based in Warsaw, and FinnRiMa, the Finnish risk management association based in Helsinki.

FinnRiMa is one of Europe's oldest risk management groups, founded 20 years ago based on a working group of the Central Chamber of Commerce of Finland. The group today has about 200 members--roughly half of which are risk managers.

"We have been dealing with these (risk management) issues already a long time and I feel we can learn a lot from others, but we are also able to provide some competencies and experiences to others as well," said Lassi Väisänen, chairman of FinnRiMa, who is also vp and chief risk officer at TeliaSonera Corp., a Helsinki-based telecommunications company. "The FERMA members and (our members) are all winning something."

Some of FinnRiMa's current objectives concern the implementation of enterprise risk management in practice, overall corporate governance issues and improving transparency of risk management activities vs. reporting, said Mr. Väisänen.

PolRisk is a newer organization, founded last year.

Rafal Rudnicki, PolRisk's board president and group risk manager at Raben Group in Poznan, Poland, believes FERMA membership will benefit local risk managers through education and the sharing of know-how.

The addition of Mr. Rudnicki and Mr. Väisänen as FERMA directors bring the total number on FERMA's board to 22, comprising 15 directors from member associations and seven deputy directors.

As for changing FERMA's future governance structure, "there are suggestions, but no formal proposal has been put forward yet," said to Florence Bindelle, FERMA's executive manager.

Still, with 27 countries in the European Union, FERMA can only get larger, said Ms. Dequae. She noted that there are risk management associations that are either being developed or considered in Turkey, the Czech Republic and Slovakia, as well as risk management contacts in Romania.

Ms. Dequae, group risk and insurance manager of N.V. Bekaert S.A., a Belgium-based multinational metals group, was first elected as FERMA's president in 2005. Asked why she wanted to be president for another two years, she said: "I felt that two years was a bit too short to realize all the things I would like to do."

Serving two terms is not without precedent. Thierry van Santen, group risk manager of Paris-based Group DANONE, served two terms before Ms. Dequae.

"FERMA is growing quite fast, so we have a lot of contacts within our association," she said. "One of the things I want to do (in my second term) is visit all the associations to get a feel of what it is like for my colleagues in other countries."

The other goals for the organization are to:

  • Work more closely and hold joint educational seminars with other federations or associations, such as those representing European internal auditors, loss control engineers and treasurers. Such contacts could lead to joint action on issues before the European Commission, she said.

  • Encourage national associations to make their views heard at the European Commission, on topics such as its inquiry into business insurance competition. "FERMA has reacted, but different countries also have to react on the more country-specific topics," she said.

  • Obtain full transparency for larger companies on broker commissions, which Ms. Dequae hopes to obtain in collaboration with insurers and brokers. She intends to improve communication with broker groups as well as insurers through the Comite Europeen des Assurances in Brussels.

  • Communicate the risks of climate change so that national associations are "aware of the consequences of this, because it is very important to have very good risk management adapted to the climate change we are confronted with."

  • Stay on top of the risks associated with the economic boom in countries like China, which is leading to a "scarcity of energy and enormous fluctuations in the prices of raw materials," she said.

"We also see that some new risks are appearing due to globalization, like the whole logistic supply-chain risks; I think we will have to be very aware of the evolution in that area."

Also at last month's FERMA meeting, the board chose as FERMA's two vps, Franck Baron of the Swiss risk management association, SIRM, and Hans Gorree of the Dutch risk management association, NARIM.