VIEWPOINTS [ PEOPLE ][ OPINION ][ COMMUNITY ]
» ask companies to be
Raphael Dautigny
more explicit about their ‘Organisations that are risk appetite. Moreover, this is the goal of the too rigid are cutting green paper published themselves off from by the EU and the 9th Directive on corporate reality … and sooner or governance. When we later a catastrophe will talk about risk appetite, we are talking about the take place’ development of the Michel Dennery GDF Suez business, the appetite for business growth.” However, for ERM to continue to establish itself in the corporate culture of companies around the world, a strong risk management community is essential. This is where Ferma can help, Dennery says. “As professionals, it’s very important to be able to exchange ideas so we can improve risk management in our organisations and share new ideas. Ferma has developed a number of communication
Q&A
‘I believe the risk manager should be an expert in how not to buy insurance’ Could you tell us about your career history? “I graduated in law and I also did postgraduate studies in business administration and human resource management. My first job as a professional was as a manager for a company owned by the French business Vivendi. I have been at Abengoa for the past 20 years. At first I was the manager of one of the companies of the group, and 13 years ago the chief executive gave me the task of setting up a risk management department in our company.” Why did he pick you to set up the risk management department? “I think he knew I had the right management experience, but he also wanted someone who had an education in law, was technically minded and understood the engineering industry. From the beginning, our idea of risk management was not related to insurance, it was to analyse and understand our political, financial and regulatory risks. The chief executive wanted someone who could analyse contracts, agreements, joint ventures, clauses, responsibilities and so on. At the beginning it was me and me alone and now we have 35 people working in the risk management department.”
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StrategicRISK [ OCTOBER 2011 ] www.strategic-risk.eu
Rogelio Bautista Guardeno, CHIEF RISK OFFICER, A BENGOA
Is ERM gaining influence and popularity throughout Europe? “I think there is a lack of understanding of risk management at the highest levels in some big companies in Europe. It’s true that there is a growing number of people who understand that risk management is something that adds value to a company. However, only a few years ago it was still seen as a process that was there solely to protect assets and responsibilities, not to anticipate possible risks or improve the company. In the US the situation is quite different and there are more CFOs than in Europe – my role is more akin to that of a CFO than a risk manager in the traditional sense of the term. I think that Abengoa is probably the only company in Spain where the risk management department engages in all these kinds of activities.” What is the most important lesson that you have learned in your career? “The most important thing is probably that you cannot achieve real risk management if the executive branch of the company is not convinced; risk managers need the support of the board to do their jobs effectively. The most important lesson for me is that risk management has to come from the top down
and not from the bottom up. If risk management comes from the top down, 75% of the battle is already won. The second valuable lesson is that risk management has to be a function that forces the risk manager to understand all of the processes, functions and staff of their company. Risk managers have to have a very broad perspective; you can’t simply be an expert in insurance. I often say that the risk manager should be an expert in how not to buy insurance: ideally they should know how to manage risks without paying for them. Of course, you need to know how to buy insurance, what kind of insurance policies there are in the market, what kind of risk you are able to protect with an insurance policy; but this is the second step. The first step is to manage all other options so that you don’t have to buy insurance.” Do you communicate with staff at all levels of the company? “Yes, I think that this is very important. We have several internal procedures and we have an internal manual on risk management that is transmitted to all employees in the company. For example, for 10 years now I have been organising internal training in risk management not only for the risk management or insurance team but also commercial people,