European risk managers say no to more corporate governance rules from the European Commission particularly concerning risk appetite
Ferma responded to the European Commission’s consultative Green Paper on corporate governance saying that “implementation and robust enforcement” of existing corporate governance rules are needed rather than a new Directive.
"In the current economic situation we need more than ever to ensure that companies are well governed and consequently reliable and sustainable. Too much short term thinking has had disastrous consequences. That is why we have launched a debate on the effectiveness of the existing corporate governance framework,” said Michel Barnier, internal market and services commissioner at the EC, about the new Green Paper.
Ferma is opposing in particular any further obligations for companies to publish information on their risk appetite. “Ferma does not support the position to disclose more information about risk appetite because it may harm companies’ competitive position, will not improve their risk management culture and will not provide more assurance to stakeholders that risks are under control,” the association said in its response to the Green Paper.
Ferma also reemphasised its belief that risk management should be used as a real tool for decision-making, that the board should ensure proper oversight of the risk management process and that is should also help set company-wide risk policy.
For the full EC report click here.
For more detailed analysis of Ferma's position from StrategicRISK:
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