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FERMA president on why risk managers should play a key role at the heart of a successful business
FERMA president Jo Willaert tells Progress why risk managers should play a key role at the heart of any successful organisation
It is perhaps not surprising that the president of FERMA, the Federation of European Risk Management Associations, should be a strong advocate of the importance of risk management for European businesses today. But for Jo Willaert, risk manager at Agfa-Gevaert and current president of FERMA, it is not just risk management, but the role of the risk manager that he is most passionate about.
Jo firmly believes that the risk manager has a leadership role to play when it comes to the company’s strategy and business plan. “By leadership, I mean the position in the company to support the decision-making process of the company – the risk manager supporting the overall strategy,” he says. “Leadership means that the risk manager should know what the targets and strategy of the company are, in order to support the company and to make sure the risks I “It is not enough to say what the risks are. Before you do that, you have to listen, and listen actively” that could be an obstacle to reaching these targets can be managed.”
So, for Jo, it is important that the risk manager is visible in the company, and close enough to the decision-makers. “The risk manager does not make the decisions, but he or she should be informed about the decision-making process and give advice on it. It will then be up to the decision-makers to do with that advice what they want. Senior management and the board are supported by internal audit, financial and legal functions, and risk management should be on an equal level,” he says.
One of the difficulties for the risk manager is the negative connotations of risk. But according to Jo, risk management delivers a positive message. “The risk manager is not there to be an obstacle, just to give reasons as to why the risks are too high to do the business. The risk manager is there to explain to decision-makers the risks of their business plan. Then they can decide how to proceed knowing what the risks are and how much they can be managed. In this way, risk management should influence the strategy and business plans.”
Once the strategy is decided, he explains, the risk manager can come back with a plan for managing the risks in such a way as to make a success of the strategy. “It is a positive message and certainly not one that makes people afraid of taking risks. On the contrary, we support risk-taking, because risk-taking is part of entrepreneurship,” he says. “We try to manage, help and give methodologies and analyses to make sure that the risks are known and under control.”
Leadership was one of Jo’s priorities when he became FERMA’s president, together with communication and education. Communication, he believes, is a key skillset for the risk manager, but it is one that applies at all levels of the company, whether it is with people in the field or the board.
“It is not enough to communicate; you have to do something with that communication,” he explains. “It is not enough to say what the risks are. Before you do that, you have to listen, and listen actively. By that I mean listen to what the decision-makers are saying, listen to what the people in the field are saying and listen to what the customer and suppliers are saying.
“The risk manager must have access to everyone involved with the risks. But at the same time, risk managers should be strong enough to say what they have to say independently.”
The education aspect is where FERMA has been most active so far. FERMA’s professional certification programme, rimap®, was launched last year, providing a programme of European Certification for professional risk managers, giving independent confirmation of the professional competences, experience and standards of individual risk managers, and accreditation for the risk management programmes of educational bodies. In October 2016, at the FERMA Seminar in Malta, the first 18 risk managers received their rimap certification.
What’s next for the profession? For Jo, to be a successful risk manager you need three things. “First, you have to be trained, which is why FERMA is talking about rimap – you need a theoretical basis and you need to know what you are talking about,” he says. “Next, you need experience, and that can be in any company, in any situation, but you do need the experience of managing risk. And third, you need to know your own company. If you do not know the culture of your company, you will fail. Your advice will not be taken into account. It is important to adapt your style to the culture of the company.”
Increasingly, he says, the role of the risk manager is more difficult because you cannot fit the job of risk management in a box. “Risk managers touch everything. The risk manager is linked with IT, with legal, with internal audit, with all the aspects of the company. So, in that sense, the role is now more difficult. But if, at the same time, the decision-makers in the company are increasingly recognising the importance of the risk management function, then it is easier, because of the support they provide. Without doubt, once your job is recognised within your company, and you are there as an equal partner, at that moment your job is easier than it was before,” he says.
That is what Jo wants to emphasise more than anything else – what risk managers require now is recognition. The responsibility of risk management is increasingly a strategic one, and he believes that when risk managers are recognised as supporting the decision making process, then their companies will get full value from the important role they have to play. “Recognition is there for risk management as such, but I think the next step is that it should be centralised in the function of the risk manager. A lot of companies will say that they do risk management; they have a quality manager, human resources, health and safety, and security, and so on. But there is no common link with the strategy of the company, and this is what the risk manager is all about – making sure that the strategy and the business plan of the company will be successful and that targets will be reached. For that you need a recognised individual. There, I think, we still have a way to go.”
Lessons for risk managers
- Take a leadership role - Know the company’s targets and strategy in order to manage the risks that present obstacles to those aims.
- Send a positive message about risk - Let the company know that risk managers exist to support and inform risk taking rather than obstruct the process.
- Listen to everyone involved with risk - From the suppliers and people out in the field to decision-makers, actively seek out the views of everyone involved in a risk, but be strong enough to speak with an independent voice.
- Understand company culture - In addition to having the knowledge and experience to be successful, adapt your styles to the culture of the company.
- Recognition is vital - Use opportunities to get recognition, including through your risk management associations. The role becomes a lot easier once risk managers are properly recognised within their organisations, particularly by decision-makers.
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