Guidance for senior executives on risk can help them avoid additional regulatory attention.
Practical guidance on implementing European company law requirements on risk management, internal control and internal audit can help reduce further regulatory attention, according to the Federation of European Risk Management Associations (FERMA) and ECIIA.
The advice is designed for senior managers and executive committees on practical approaches to support the board and audit committees in meeting their responsibilities under article 41-2b of the EU 8th Company Law Directive: “Monitoring the effectiveness of internal control, internal audit and risk management systems.”
Carolyn Dittmeier, past President of ECIIA, said: “Today, it is crucial for organisations to think clearly about their internal assurance processes to avoid being subject to additional external regulation. The 8th EU Company Law Directive coupled with our papers gives organisations the necessary guidance to enable them to move forward with a governance framework that provides a risk-aware culture to maximise the opportunities of success.”
Jorge Luzzi, President of FERMA, said: “Good governance depends on managers being conscious that good control reinforces management systems. With this Part 2 of the Guidance, ECIIA and FERMA aim to provide senior executives with practical guidance to be adapted to the culture, activities and organisation of their companies.”
The publication offers guidance drawn from the real-life experience of members of FERMA and ECIIA. It takes senior executives through a series of questions that show how they can support the board in managing risks, and making best use of internal control and assurance from internal audit.
The purpose of FERMA and ECIIA in producing Part 2 of the Guidance is not to deliver definitive answers, but to suggest approaches that senior executives can adapt for their companies. This follows Part 1 of the Implementation Guidance on the 8th Company Law Directive for boards and audit committees, released by FERMA and ECIIA in September 2011.