Boards face greater risks
Boards of directors are exposed to a wider range of risks and carry more accountability than they did only a decade ago, according to a recent webinar hosted by the directors’ body Ecoda “Mitigating risks at board level”.
The speakers agreed that boards’ exposure to risks now goes beyond traditional financial risks and includes those related to privacy, climate change and cultural issues, such as the #MeToo movement. New sets of liability rules for supervisory board members are emerging worldwide, which has led to a common set of expectations and a common approach to accountability, they said.
Those on the panel, Kevin LaCroix (Vice President at RT ProExec), Noëlle Lenoir (Partner, Kramer Levin Naftalis) and Noona Barlow (Head of International Financial Lines Claims at AIG), agreed that with many companies operating globally, it is not only the scope of risks that is growing but also the exposure to multi-jurisdictions. In that context, board members must anticipate possible severe crises, almost having to operate as risk managers and closely review an organisation’s risk mapping.
Directors should ask for, and benefit from, periodic compliance training based on real life examples, the speakers said. Board training is key to providing full awareness of directors’ duties and the legal implications of not complying. Many organisations were turning to chief compliance officers within the company as best practice. Having an open culture in organisations where people could speak up without fear of reprisals was also seen as important.
“Boards that have developed strong and proactive relationships with their heads of internal audit have been able to keep abreast of this wider range of risks more readily,” Farid Aractingi, ECIIA President, said commenting on the webinar discussion. “Internal audit’s position in the third line of defence gives it an overview of all of the risks a business faces and it can quickly identify control weaknesses and gaps in assurance where they arise. Many heads of internal audit are now seen as trusted advisers on risk to the board.”
Participants were invited to take part in a poll showing what risks are of most concern for their board. Data security (69%) was the most frequently cited issue followed by corruption and bribery (25%), competition and antitrust issues (25%), privacy (19%), climate change (13%) and health issues (9%). Panellists expressed surprise that corruption and bribery did not receive a higher score and that “#MeToo” type concerns were not cited at all.
Download debriefing note: here
Download speakers’ presentations here
Download the webinar: here
The ECIIA elected Farid Aractingi as President of its management board at the body’s annual conference in Switzerland.
Aractingi (centre in image) was previously Vice President of ECIIA. He is Chief Audit, Risk and Organisation Officer of Renault and a former Chairman of the Board of the IFACI, the French Institute of Internal Auditors, where he is now an honorary member.
“I’m looking forward to building on the great progress ECIIA has made in being the voice of the internal audit profession across Europe,” Aractingi said. “Henrik has done a fantastic job of raising the profession’s profile and authority among our many stakeholders over the past three years. I intend to build upon that firm foundation.”
Henrik Stein stepped down as President.
Thierry Thouvenot (left in image) was elected Vice President. Thouvenot has been IIA Luxembourg Chairman since 2012. Gabrielle Rudolf von Rohr (right in image) was appointed ECIIA Treasurer.
Jens motel now represents IIA Germany on the board and Manuel de Alzua, IIA Spain. The former Yugoslav Republic of Macedonia became an ECIIA member for the first time.
Henrik Stein elected ECIIA President in board reshuffle
Henrik Stein, Chair of the ECIIA’s Banking Committee, has been elected ECIIA President at the body’s General Assembly in Paris on September 20, 2015.
Stein has played an active part in promoting the voice of internal audit during his time as a member of the ECIIA’s Management Board, and also in his role as a Board member of IIA Germany (DIIR). Since 2003, Stein has been head of the Group Audit function at DZ BANK AG and has focused in his career on internal audit in the financial services sector.
Farid Aractingi, a member of the ECIIA’s Management Board and Chairman of the Board of IFACI (IIA France), was elected ECIIA Vice President. Aractingi is Chief Audit, Risk and Organisation Officer of Renault.
Kristiina Lagerstedt, a member of IIA Finland’s Advocacy Committee (she served as IIA Finland’s Chairman between 2010 and 2013) was elected to the ECIIA Management Board. She is a member of the Professional Issues Committee at IIA Global. Lagerstedt is Vice President, Internal audit at Sanoma.
Thierry Thouvenot, Chairman of the Board at IIA Luxembourg and a member of the ECIIA’s Public Affairs Committee, was also elected to the Management Board. Thouvenot is Chief Audit Executive of a pan-European bank.
Thijs Smit stood down after serving two years as ECIIA President. Angela Witzany also stood down as ECIIA Vice President.