multi-cultural diversity in Auditing

Transcription

1 N 6 - September 2012 The Internal Auditor Compass Michel Eertmans A pragmatic approach to multi-cultural diversity in Auditing A pragmatic approach to multi-cultural diversity in Auditing Internal Assurance: Several Cultures, Several Approaches Systemic risk is back and here to stay La FSMA : une brève présentation de fsma: kort voorgesteld Les variables culturelles du contrôle interne p. 8 P. 10 p. 14 p. 16/18 p. 53

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3 Edito Jean-Michel Cassiers President of IIA Belgium Met groot genoegen stel ik u dit nieuwe nummer van Compass voor dat u zal onderdompelen in de historische en culturele dimensie van interne audit en zijn verschillende benaderingen. Hoewel, zoals Anne Cremers er ons aan herinnert, de interne auditors per definitie professionele luisteraars zijn in dienst van hun bedrijf of organisatie, toch wordt nog te vaak vastgesteld dat ze door hun collega s gevreesd worden. En toch laten de interne auditors geen enkele inspanning ongemoeid om hun competenties te verbeteren en volgens de professionele normen te werken. Hierbij waken ze er voortdurend over een toegevoegde waarde aan hun bedrijf of organisatie te bieden. De samenwerking met alle controlerende partijen is dus essentieel. De tekst van Philip Mariscal illustreert dit via een interessant voorbeeld uit de openbare sector. Dit thema zal verder worden uitgediept tijdens een conferentie die door het Instituut voor Interne Auditors wordt georganiseerd op 14 november aanstaande. Het thema van deze conferentie : Interne audit en openbare sector in België: een hulpmiddel voor het bestuur?. Bovendien lijkt de interne auditor die aan de wijzigende verwachtingen van het management wil beantwoorden, steeds meer zijn opdracht samen met de geauditeerde uit te voeren, de partij die het meest nut heeft van het werk van interne audit, zoals Tommaso Capurso ons aantoont door het servuction - model op de interne audit toe te passen! Zo lijken de auditprestaties invloed te hebben de bedrijfscultuur. De interne auditor, geconfronteerd met de multiculturele verscheidenheid zal de pragmatische benadering, die door Michel Eertmans aanbevolen wordt, overnemen en aandacht schenken aan de culturele eigenaardigheden van de interne controle door zich aan te passen aan de bedrijfscultuur. In een multiculturele organisatie, kan dit een grote uitdaging zijn zoals André G Kiewitz vermeldt. Hartelijk dank aan alle schrijvers van de artikels om hun kennis te delen en om ons mee te nemen op een reis door het oneindige en boeiende universum van de interne audit! Ze herinneren er ons aan dat iedere interne auditor, binnen zijn bedrijf of organisatie, een rol speelt bij het schrijven van geschiedenis over de interne audit! Deze geschiedenis wordt ook geschreven binnen het Instituut voor Interne Auditors, een geprivilegieerde ontmoetingsplek van verschillende ervaringen gekleurd door de verscheidenheid in bedrijfscultuur. Het is ook een plek van wederzijdse verrijking, binnen comités en werkgroepen die ten dienste van het beroep opgericht zijn! Veel leesplezier! JMC I am delighted to present you with this new issue of Compass which will take you to the very heart of the historic and cultural dimension of internal audit, and its different approaches. As we are reminded by Anne Cremers, whilst internal auditors are by definition professional listeners at the service of their company or organisation, it is still noted on too many occasions that they are feared by their colleagues. And yet, internal auditors spare no effort to acquire and improve their skills and to work according to rigorous professional standards, whilst constantly taking care to bring added value to their business or organisation. Collaboration with all those involved in control is therefore essential. Philip Mariscal s text provides us with an important illustration where the public sector is concerned. What s more, this theme will be explored in greater depth during a conference organised by the Institute of Internal Auditors on the 14th November this year, of which the theme is Internal audit and the public sector in Belgium: a tool to help with governance?. Furthermore, the internal auditor, concerned with meeting management s changing expectations, seems more and more steered towards co-producing his services with the audited party, a real stakeholder in internal audit results, as Tommaso Capurso shows us, by applying the servuction model to internal audit activity! Therefore, internal audit performances seem to be dependent on the culture of the business. The internal auditor, faced with multicultural diversity, will find it helpful in this regard to adopt the pragmatic approach recommended by Michel Eertmans, and will be interested in the cultural variables of internal control, whilst taking care to adapt to the culture of the business, which can prove a major challenge in a multicultural organisation, as André G Kiewitz in particular reminds us! Thank you to those who have written articles to share their knowledge and take us on a journey into the infinite and enchanting world of internal audit! They remind us that each internal auditor, within his business or organisation, has a role to play in writing the story of internal audit! This story is also being written within the Institute of Internal Auditors, a special meeting place for varied practices, coloured by the diversity of business cultures; but also a place for mutual enrichment where I invite you to join in with organised activities, as well as the different committees and working groups set up for the benefit of the profession! Excellent reading! JMC Je suis très heureux de vous présenter ce nouveau numéro du Compass qui vous plongera au cœur de la dimension historique et culturelle de l audit interne, et de ses différentes approches. Si, comme nous le rappelle Anne Cremers, les auditeurs internes sont par définition des «écouteurs professionnels» au service de leur entreprise ou organisation, on constate encore trop souvent qu ils sont craints par leurs collègues. Et pourtant, les auditeurs internes ne ménagent par leur peine pour acquérir et améliorer leurs compétences et travailler selon des normes professionnelles rigoureuses, en veillant sans cesse à apporter une valeur ajoutée à leur entreprise ou organisation. La collaboration avec l ensemble des acteurs du contrôle est donc primordiale. Le texte de Philip Mariscal nous en apporte une illustration importante en ce qui concerne le secteur public. Ce thème sera par ailleurs approfondi à l occasion d une conférence organisée par l Institut des Auditeurs Internes le 14 novembre prochain, et ayant pour thème «Audit interne et secteur public en Belgique : une aide à la gouvernance?» En outre, l auditeur interne, soucieux de répondre aux attentes évolutives du management, semble de plus en plus amené à coproduire ses prestations avec l audité, véritable partie prenante des résultats de l audit interne, comme nous le montre Tommaso Capurso, en appliquant le modèle de «servuction» à l activité d audit interne! Ainsi, les performances de l audit interne semblent tributaires de la culture d entreprise. L auditeur interne confronté à la diversité multiculturelle adoptera utilement à cet égard l approche pragmatique recommandée par Michel Eertmans, et s intéressera aux variables culturelles du contrôle interne, en veillant à s adapter à la culture de l entreprise, ce qui peut s avérer un défi majeur dans une organisation multiculturelle, comme nous le rappelle notamment André G Kiewitz! Merci aux rédacteurs des articles de faire partager leurs connaissances et de nous faire voyager dans l univers infini et enchanteur de l audit interne! Ils nous rappellent que chaque auditeur interne, au sein de son entreprise ou organisation, a un rôle à jouer dans l écriture de l histoire de l audit interne! Cette histoire s écrit également au sein de l Institut des Auditeurs Internes, lieu privilégié de rencontre des pratiques variées, colorées par la diversité des cultures d entreprise ; mais également lieu d enrichissement mutuel au sein duquel je vous invite à rejoindre les activités organisées, ainsi que les différents comités et groupes de travail mis en place au service de la profession! Excellente lecture! JMC September 2012 EDITO 3

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5 Inhoud Sommaire Contents You can send your comments, suggestions or articles to: be Edito IIA Corner Career Corner A pragmatic approach to multi-cultural diversity in Auditing Internal Assurance: Several Cultures, Several Approaches Systemic risk is back and here to stay La FSMA : une brève présentation De FSMA: kort voorgesteld Ready to Audit Solvency II? L audit interne : un service coproduit dans un monde de services Auditeur, un métier qui a ses racines dans l Histoire européenne Auditor, een beroep dat zijn wortels heeft in de Europese geschiedenis The advantages of cloud computing: Why you should start experimenting today Process mining: get your processes out of the black box La démarche de Risk Management dans les entreprises en Belgique et son degré de maturité Cybercriminaliteit Les variables culturelles du contrôle interne IIA - INTOSAI «Des structures différentes mais complémentaires» IIA Belgium events September 2012 INHOUD - SOMMAIRE - CONTENTS 5 Editor IIA Belgium Rue Royale Koningstraat b Brussels Tel. : 02/ Fax: 02/ info@iiabel. be www. iiabel. be Produced by Green Pepper info@greenpepper. be www. greenpepper. be Redaction Committee Jacques Coucke Tommaso Capurso Steve Plasman Pieter Peremans Philip Mariscal Marc Vael Danièle Roussel Pictures (Certification Celebration) Call Agency Tel: 02/ info@callagency. be www. callagency. be www. polatonium. be Pictures (General Assembly) Audoin de Vergnette audoindevergnette@hotmail. com The views expressed in the articles, reports reflect the views of the writers. IIA Belgium does not accept any responsibility for those views expressed herein.

6 IIA corner News from IIA Belgium IIA CORNER The Board of Directors nominated Mr Pascal Stroobant as managing director - CSO of IIA Belgium as from 18 June Pascal Stroobant knows IIA Belgium since long. He has been member from 2004 to 2010, and board member from 2006 to If you want to contact him, you can send an at pascal. s@iiabel. be or contact IIABEL at If you want to know more about Pascal, you can go to his profile on LinkedIn: linkedin. com/in/pascalstroobant The Board is convinced that his experience both as a senior manager in important companies as well as with our Institute will help to develop IIA Belgium as a professional organisation. 6 September 2012 News from Global Update on IIA Certification Exam Seat Time Reduction Since January 2012, The IIA has been implementing, on a language-by-language basis, two key changes that enhance the certification candidate s exam experience: - The removal of the computer-based testing (CBT) tutorial from the examination process - a reduction in the number of unscored questions on exams These two changes are enabling The IIA to reduce the candidate s exam seat time and avoid an impending price increase from the testing vendor.

7 Career Corner New functions in Internal Audit Departments Kathleen Desmedt Kathleen Desmedt has been appointed head of Internal Audit for the Europe and APMEA regions at MasterCard Worldwide as from January 1, She was previously leading MasterCard s European tax department. Prior to MasterCard, Kathleen was a Senior Manager at KPMG. Kathleen has a Master Degree in Applied Economics and an International Degree in European tax law. Patrick Michalak As from March 2012, Patrick Michalak has been appointed Chief Audit Executive of Recticel, directly reporting to CEO Olivier Chapelle. In his function, he is responsible of all audit activities within the entire Recticel Group and related joint ventures. He will support Recticel in making a step change toward a sustainable governance. Patrick started his Internal Auditor career in the Hygiene industry in Germany (SCA Hygiene, ) before joining the Petrochemical industry in Belgium (Borealis, ). In addition to his Internal Auditor role, Patrick actively participated to the enhancement of the Borealis governance model by developing and structuring the internal control approach and by managing the full implementation of an integrated Governance, Risk and Compliance tool on Group level. September 2012 CAREER CORNER 7 Koen Van Ootegem Koen Van Ootegem has been appointed as the new Head of local audit at Société Générale Private Banking Belgium within the Hub of Luxemburg. In this role, he reports to the CEO, Audit Committee and DCPE (= Direction Du Contrôle Périodique) and coordinates all internal audit activities within the organization in Belgium. He has a 17-years career within Societe Generale Private Banking Belgium, where he assumed various positions, including at the Audit (from 1999 to 2007) and Operations departments as Head of Middle Office from 2010 up to date. News from the Internal Auditors Community

8 Michel Eertmans Auditeur Général Honoraire ING Belgium Independent Director and Member of the Audit Committee of MLOZ September 2012 A pragmatic approach to multi-cultural diversity in auditing 8 A pragmatic approach to multi-cultural diversity in Auditing by Michel Eertmans Someone wrote that culture is the sum total of shared beliefs, ways of seeing and acting which drive more or less consciously the behavior of an individual or group. A same person can therefore belong to several different cultures or sub-cultures depending on his or her birthplace, nationality, ethnicity, family status, gender, age, language, education, sexual orientation, religion, profession, work place and its corporate culture. I worked in several countries and continents and discovered that cultural diversity was not only a geographical phenomenon but that every region offered itself internally a wealth of different cultures. Take Switzerland for an example. Differences between the French speaking part of the country and the German or Italian speaking regions automatically come to our mind. But I found cultural differences or approaches between Lausanne and Genève and within the audited entities in the latter. I noticed differing corporate cultures between the two main business lines audited. This impacted auditors and auditees. Thank God (Oops! There is a lot of cultural heritage in this expression!) audit has internationally recognized procedures, standards, definitions... which should warrant a uniform way of working and understanding worldwide... but did we achieve excellence... can we make further progress? Every major business faces the same challenge on a global scale and tries to resolve the issue by defining a corporate culture. Not only will this corporate culture also apply to the internal auditors of the company but they will in most cases have to audit the effective and true implementation of this culture. A corporate culture is a framework of common values shared by all staff within a company. So, management should make sure and auditors should check, that: values are understood by staff worldwide; staff recognize themselves in them; staff are proud to adhere to these values.

9 To be internationally adopted and complied with values should be identified with the goals of the company but not be a copypaste of the national culture of the country of head-office. Communication is key! This is why a common language is often adopted; in most cases English is the obvious choice. Fine, provided that a lot of efforts and investments are made to align the level of proficiency between the parties involved. Lots of misunderstandings can arise especially when two languages use similar words with different meanings. Take French and English: actually has not the same meaning as actuellement eventually does not translate into éventuellement A French auditor could write in English that an identified risk will eventually lead to losses and mean éventuellement i. e. possibly while the English auditor reading the report will understand that the risk will definitely (sooner or later) lead to losses. Not the same!!! If a French auditor writes in English actually there is a risk intending to say actuellement (for the present time) he may not realize that he is communicating that there is a definite risk. Imagine now that an English auditor is communicating to the rest of the world using the understatement so common in colloquial English and imagine how the message will be understood by the teams located in countries spread over five continents! One cannot look at cultural diversity without addressing issues of religious and philosophical background. In some countries religion or a philosophical view is the basis of the legal system and social and cultural life. Some countries like France guarantee religious and philosophical freedom but ban any reference to these in States Affairs, Administration, Schools, etc... The principle of laïcité (secularity) applies. It is forbidden to wear religious symbols in Government services, official schools,... Beware, auditors in Government services could be asked to evaluate the implementation of above rules or policies. This does not apply to the private sector. So one could imagine that even auditors in this sector wear such symbols. Is this appropriate? Can it lead to a breakdown in the operation of audit? My experience leads to the conclusion that auditors have a better chance to be respected as objective officers if they do not show personal beliefs. But I also respect the rights of people and had brilliant auditors in my team not hiding their being part of a religious or philosophical community. When auditing, one should anyway be aware and respectful of such backgrounds. The institution I worked with organized courses for foreign managers coming to work and lead teams in Head Office which was my case. Those courses addressed a lot of cultural issues. The coach told us with reference to his country that it was a permissive society made up of intolerant people! Interesting? No, complex! Auditors should be able to cope with such complexity. Many areas that auditors will explore are bound to show cultural influences: Dogma versus pragmatism Valuing breaches to Corporate policies Compensation and benefits rewarding systems Flat or pyramidal management structures Direct or coded communication Consensus or challenge Attitude towards uncertainty Perception of time Attitude towards age and experience Elitism to name only a few. Just a few comments about these points: Neither dogma nor flexibility should ever defeat common sense even if it leads to some pragmatism. When auditing the implementation of Corporate policies keep in mind that the risk is rated on the basis of impact and occurrence of a violation and do not conclude systematically that any breach causes the highest risk. One should of course always report such violations. If you audit reward systems, remember they are initially originating from an Anglo-Saxon environment. Some well publicized excesses caused a lot of damage. Be open about it with management. If bonuses are so high that they allow the beneficiaries to retire and lead a life of comfort and luxury after 1 to 5 years they may be tempted to make such quick fortune by reckless management. Questions have arisen about whether bonuses are appropriate for auditors? Why not, as long as the targets in performance are not biased? Some organizations have decided to cut or cancel bonuses for individuals or teams who get a non satisfactory audit report during the year. Beware that this will make debriefings of audits a sterile fight between a threatened auditee who intellectually agrees on the audit findings but fights for his bonus and a conscientious auditor who should never ever be part of the bonus process except for his own. Flat management structures are increasingly introduced but some organizations still have pyramidal management structures. Understand how communications work or fail in both structures so that your messages flow easily up and down the organization. In some countries consensus is the name of the game, in others challenging or staging wars is the compulsory way to decision making. Adapt to this but an auditor should convince in the end. Perception of time and attitude towards uncertainty (accepted or not) characterize some cultures in such a way that they will impact audit work. Some cultures hate uncertainty while others promote it as a booster of entrepreneurship. Attitude towards age and experience is both linked to culture and to recent demographic developments. Some civilizations notably in Asia, Africa and Southern Europe show a deep respect for senior persons and their experience. Northern Europe and America now facing a generation gap due to the retirement of baby boom managers see less interest in experience (= the past) and rely more on management by models. Model building can be a source of new growth, but some models already tried out in the past turned out to be a recipe for disaster and here experience should have a voice. Finally, elitism is widely pursued with the availability on the market of a growing number of highly educated candidates. Corporates should not miss out on this opportunity and hire bright applicants. The challenge however is to keep a high level of communication and cooperation between specialists and managers. Major disasters occurred in the financial sectors when senior managers were not able to understand what bright new recruits were doing in their organizations. For auditors the challenge will be to get the attention of highly specialized staff. They will therefore have to constantly upgrade their own skills. Jack Welsh, former CEO of General Electric, wrote: discouraging culture... diversity not celebrated... lack of shared values... are signs of a losing organization. So let us be on the winner s side! September 2012 A pragmatic approach to multi-cultural diversity in auditing 9

10 André G Kiewitz Supervisor Competence Center ArcelorMittal Luxembourg September 2012 internal assurance: several cultures, several approaches 10 Internal Assurance: Several Cultures, Several Approaches by André G Kiewitz Allow me to share a message from an internal assurance (IA) functional vantage point, from an environment where several cultures and several approaches abound, in the largest steel and mining company in the world. This is a recipe for much complexity and challenge, not just from a control, risk management and governance point of view but from a qualitative business standpoint as well, where people are a key driving force (a factor we easily overlook in business). Compounding this challenge was a perceived global economic roller-coaster ride which tested us along our journey to fulfil the vision of ArcelorMittal (AM), Internal Assurance. The birth of a new Internal Assurance vision Shortly after the merger of Arcelor and Mittal Steel in 2007, the independent Audit Committee required Francis Lefèvre (VP, Internal Assurance) and his management team to present a strategy and action plan. Francis and his team s response was bold, setting a target of being in the top quartile along with a leading human capital development culture. This ambitious objective was accepted by the Audit Committee members and CEO and President of the merged ArcelorMittal group. Francis Lefèvre embraced this challenge with open arms. He knew that a fresh approach was required, a new IA vision. The vision would have to be seen, implemented, and be contributed to by everyone at IA. He also needed other leaders to help to make this mental picture a reality. In Spain, Valencia, during the 2007 IA Leadership Convention, a group of senior IA members were rallied together for a strategic session - a plan of action was required to tackle this momentous task. IA would have a new vision that needed everyone to fulfil three tiers: A provider of premier audit services, A value-adding business partner, and A unique training ground for future business leaders.

11 A new team The second stage of moving towards IA s vision and aligned values was to have the right team to provide assistance, (along with top management s support and guidance), to ensure that IA took a leadership role in assessing and managing risk, applying continuous quality initiatives, benchmarking and leveraging best practices, and identifying innovative opportunities for its staff in order to feed ArcelorMittal with leaders to ensure its sustainability. Hence, the Competence Center (CC) was formed. The CC is driven by a common goal of facilitating the sustainability of IA through: appropriate standards, a common culture, continuous improvement, human capital development, and leveraging best practices. The CC team would have input into every IA unit worldwide, to achieve IA s new vision. In addition, it also worked hard on a human capital development model which included a career acceleration strategy. What they also had in their arsenal was L N Mittal s support. As a student and teacher of enduring great companies, Jim Collins (author of Good to Great) points out that:... there is a big difference between being an organization with a vision statement and becoming a truly visionary organization. The difference lies in creating alignment - alignment to preserve Figure 1: Organizational Chart of ArcelorMittal, Internal Assurance an organization s core values, to reinforce its purpose, and to stimulate continued progress towards its aspirations. When you have superb alignment, a visitor could drop into your organization from another planet and infer the vision without having to read it on paper. 1 With this in mind, the CC was placing a much needed emphasis on people since the other two elements of Internal Assurance, namely positioning and process were firmly entrenched within the AM, IA function (Positioning: Internal Assurance in ArcelorMittal Governance, Risk and Compliance Model (GRC); Process: working practices and technologies). The Human Capital Development Model Having finalized the merger in 2008, many challenges existed with respect to people s opposing cultures and values systems. Cultural challenges may be detrimental to acceptance, participation and advancement in the work world. 2 These challenges may reverberate through the hallways and fester, rotting the fabric of an organization. In a multicultural company, the management of people human capital plays an important role in embedding a vision. If this is done correctly, an inspired and productive workforce is developed which fine-tunes processes beneficial to a company s bottom line. Since organizations are continuously changing their techniques, structures, goals, equipment, people and locations, how they effectively lead and manage people and these changes, especially in a multicultural environment, is of utmost importance. ArcelorMittal is no stranger to change. The organization has moved from a restructuring to a merger, in an economic downturn and with many other challenges along the way. At Internal Assurance we are aware of the importance of having a common vision and set of values under a common culture. This is a continuous evolution and refinement process. We have made huge strides in developing a human capital development tool to assist with this evolution. The aim of our human capital development model is to speak to each individual s value system and to show the link between the company s values and the individual s value system. When this link is seen, the individual moves into inspiration, rather than motivation. Millions are spent on motivating people. Motivation is an external process the individual needs external stimuli to get back on track. This is in contrast to inspiration which is an internal process, coming from within the individual. If you appeal to an individual s highest values and the individual sees the link between their values system and a company s, a supportive and inspired September 2012 internal assurance: several cultures, several approaches 11 1 Jim Collins, Aligning Action and Values, The Forum, June Madeline E. Heilman & Harvey A. Hornstein, Managing Human Forces in Organizations, Richard D Irwin, Inc, 1982

12 September 2012 internal assurance: several cultures, several approaches 12 workforce is created. A unified culture is built on this tenet. Our Human Capital development model allows people to discover their highest values (their driving force), to have self-tailored value statements, to reflect on soft skills they would like to leverage or develop, to have a personalized vision and a mission in the following areas of life: vocational service and success, mental understanding and wisdom, and social power and leadership, 3 and to do an assessment and alignment of the two value systems, i. e. the individual s and company s. People then plot a personal development plan in the short, medium and long term - this allows for powerful succession planning. In addition, the model gives the individual a choice to also develop other areas of life. The individual is therefore developing his/herself holistically, rather than one-dimensionally. The model is depicted diagrammatically below. A human capital development mindset is further being embedded through eight elements which are represented in the following diagram. A unified culture is the glue that aligns the vision, mission and goals of individuals and the company, creating an alchemy amongst its parts. This further ensures the growth of QUALITY, SUSTAINABLE, LEADERSHIP which are some of ArcelorMittal s values. The Innovation and Creativity Seminar, held by ArcelorMittal University (AMU) in 2011, presented the following on how a leader creates culture: Proper persuasive communication (communication through people s values), Participation, 3 Dr John DeMartini, DeMartini Human Behavioural Institute Seminar, Prophecy I, Points 1 to 6 has been adapted from The Big Idea: Competing on Talent Analytics, Harvard Business Review, October The Big Idea: Competing on Talent Analytics, Harvard Business Review, October Benchmarking, presentation overheads from the International Benchmarking Clearinghouse, p. 4 Role Modeling, Expectancy treat people like they are highly competent, Structural re-arrangement constant structure (order and certainty), Extrinsic rewards, and Challenge. A unified culture and vision, with aligned values and action, allows the company to evolve rather than revolve. Understanding this dynamic allows cultural and stereotyping challenges to be managed effectively. This kind of thinking, along with a point made in the Harvard Business Review, October 2010 Google suspected that many of its low-performing employees were either misplaced in the organization or poorly managed. Employee performance data bore that out, 5 was an additional key pointer which helped to trigger the creation of a new human capital development model at Internal Assurance. The best organizations see their people not only as individuals but also as a rich source of collective data that managers can use to make better decisions. 5 Nothing is ever missed. People have strengths which can be leveraged. We need to communicate as a team and utilize our people resources. This allows us to grow towards being a premier audit business partner, a valuedadded business partner and leaders of the future. An organization s future performance is bound to the abilities and inspiration of a company s people. Organizations that have used data from human capital development to gain human capital insights already have a hard-to-replicate competitive advantage. 5 Benchmarking and innovation We aspire to being a premier auditing service provider and a value-added business partner where people pull together. However, different approaches abound. As a result, included in the CC s mission was the added task: Benchmarking and best practices studies with other top companies, measuring with the best as part of IA s continuous improvement process, to ensure that IA is a world class function. Benchmarking is the practice of being humble enough to admit that someone else is better at something, and wise enough to try and learn how to match and even surpass them at it. 6 The CC therefore established a trusted benchmarking cycle where knowledge is regularly shared with invited corporate giants and global multinationals, from major industries (like Automotive, Oil and Gas, Information Technology (IT), Mining and Steel, Aerospace and Defence, Food, Chemistry, and Pharmaceuticals). The benchmarking cycle s success mirrored the

13 respect that the new steel giant ArcelorMittal was receiving in the global industry. Many learnings are gleaned from the benchmarking cycle reviews but the philosophy of knowledge-sharing and benchmarking does not end: to maintain its sustainability, a company needs to continue to search for innovative and improved ways and to always stay a number of steps ahead of the competition. A renowned Fortune 500 business consultant, Dr J DeMartini, had this to say about innovation: Innovation: The rate of growth in an organization is a sound index to its vitality. Vitality declines with biological, if not chronological age. Everything in the universe grows at a slower rate as it gets older, unless something new is added. When something new is birthed, it is immature. It has a fast rate of growth, an elevated momentum. When something old is matured and dying, it grows slowly or it declines and decays, and it has a depressed or reversed momentum. Keep adding novelty and newness to your business... Every living system is in constant flux. To survive, any system has to respond to (the challenge of) change. The more diversity within the system, the more chances it has to survive major change because it can draw upon these diverse resources. 7 Management of people and their diverse cultural resources and ways of doing things is key. Maximum progress occurs at the border of support and challenge. The importance of a balanced perspective Today s competitive and dynamic environment requires drastic shifts in paradigm - quantum leaps are required. We need to move at greater speeds, raise the level of our vision and mission a couple of notches, work smarter, and have a balanced perspective on our goals if we are to be sustainable. The author of the Tao of Physics, Fritjof Capra 8, believes that the natural laws are key to maintaining sustainability. Natural ecosystems exist as webs, networks of interrelated parts that are multidirectional and nonlinear. They have cycles and they self-regulate by a process of feedback loops. This feedback creates learning. For examples when we touch a fire, we get burned. This is a learning process which creates growth and creativity. In the ecosystem of nature, species often live inside one another, dependent on each other for survival. 7 Flow happens when we realize this. We are dependent on many people for information and we also have to provide many people with information and advice. Therefore, for our projects and our departments to evolve and run smoothly, cooperation and partnership amongst parts is essential. If we ignore the above and an over-emphasis is placed on one aspect, be it quantitative or qualitative rather than a balanced focus on both, a system does not evolve but revolve. Insight, maturity or true wisdom into anything is a synchronous understanding which arises the moment you obtain an equilibrated/balanced, and therefore transcendent, state of mind. Lessons Learned The economic crises and the merger between Arcelor and Mittal have been reported on many a newspaper s front page. Despite this, the road we have travelled has led us to many interesting insights about our people and where we would like to be. In particular, as leaders we have come to realize the importance that: Values, Vision, Alignment of values, Culture, Having a leading team have on a modern economy and its people, and the consequences of getting it wrong. Having assessed companies over 40 years, Jim Collins has highlighted how these pointers are the glue holding any company together. We have further come to realize that we require: A clearly articulated and held vision of being: - A provider of premier audit services, - A value adding business partner, and - A unique training ground for future business leaders; A robust human capital development model focused on growing the right leading team, A mindset that transformation is the only certainty and that specific aspects of ourselves need to evolve, along with work aspects, to deliver value and influence, and A focus that innovativeness and the technology we use is meant to assist us to our greatness and not be the ruler of our destiny. These points have strengthened the incentives of our leaders within the auditing environment and the business. They have taken us back to the drawing board many times to reassess the structure and processes needed to produce: Speedy and streamlined decision making and reporting, leveraging technology and resources at our disposal even when cost is under severe scrutiny, A world class human capital development model producing visionary leaders and succession planning, aligned fully to our business strategy and crossing all cultures in our team s global environment, A robust change management strategy to deal with the conflict that surfaces when ideas and approaches are being pulled in all directions, An emotionally intelligent mindset focused on both qualitative and quantitative aspects of a task or project and realizing the risk of neglecting either of these aspects. The most important of all insights is learning that as leaders, we have to take heed of the above important factors related to people and to also realize that we are here, as leaders to: Inspire others to a shared cause and vision, and Communicate through people s values, bringing them into inspiration. This holds each aspect of our business together. These are the key ingredients required for streamlining and cultivating a healthy multicultural work force and for supporting a company vision and goals. This allows us to transcend the challenges inherent in creating a new dynamic equilibrium. Conclusion ArcelorMittal is a huge global multicultural institution with many cultures and many approaches. However, Head of ArcelorMittal Internal Assurance, Francis Lefèvre s leadership, along with that of his team, has allowed Internal Assurance to constantly support and challenge. His strategies and vision allow IA and its environment to abound with innovation and creativity and has set the function apart from the rest. The Internal Assurance department has become a champion of innovation, crossing all cultures and integrating ways that people do things. Francis Lefèvre is systematically innovating across the entire function a new human capital development tool, new IT systems, organic growth of leaders, new metrics and a new management process. Maximum growth occurs in the center of two extremes. A new dynamic equilibrium has been created by ArcelorMittal, Internal Assurance inside a multicultural steelproducing powerhouse. The Internal Assurance department has become a champion of innovation, crossing all cultures and integrating ways that people do things. September 2012 internal assurance: several cultures, several approaches 13 7 James Redfield and Carol Adrienne, The Celestine Prophecy, An Experiential Guide, Bantam Books, Fritjof Capra, The Tao of Physics, Shambhala Boulder l, 1975

14 Stefan Duchateau Prof. van de Hogeschool-Universiteit Brussel (HUB) September 2012 Systemic risk is back and here to stay 14 Systemic risk is back and here to stay In the run up to the financial crisis, policy makers and financial regulators created inappropriate legislation and ill-inspired regulation that served as a platform for an uncontrolled proliferation of risks, in different forms and shapes that finally led to a near collapse of the western financial system. The fear of a blow-up of the banking system, brought systemic risk back at the core of academic research. The existence of systemic risk comes as no surprise to academic researchers in the field of securities markets. Systemic risk was pointed out as a major concern from investors in equity markets, explaining to a large extent the long time behavior of stock prices in general and solving the equity premium paradox in particular: The spectacular outperformance of equity over bonds, both in nominal and real terms over longer periods of time, is unexplained by standard risk aversion theory unless we apply a substantial additional discount factor, compensating for the possibility of the realization of systemic risk. When systemic risk remains unrealized and the banking system appears stable and reliable, as in the period , this leads to a gradual decline of the required systemic risk premium, leading stock prices to record levels. In the reverse case, as we witnessed in the aftermath of the events of 2008, a build-up of systemic risk increases this discount factor and results in sharply reduced valuations of stocks. The perception of financial stability abruptly ended in 2008, when after a series of rather minor financial events and an unsurprising increase in the delinquency rate of subprime mortgages, started an avalanche of substantial losses, resulting in unprecedented bail-outs of European and American banks and scourges Western economies to this day. In an attempt to avoid further impacts in the real economy, Government intervention inflated budgetary deficits and government debt to dangerous levels. This, in turn, caused downgrades in the quality of investments in most government bonds, increasing the momentum of the negative by Stefan Duchateau downturn and causing even more damage in the real economy. The jury is still out on the question who is to be blamed for this massive destruction of wealth, but superficial analysis in the press quickly points to overly populist arguments: Excessive compensation for traders and appalling moral hazard of top bankers, resulting in extreme risk taking behavior, combined with puzzlingly poor risk control and eagerly but injudiciously attributed high quality scores to certain types of investments by rating bureaus. This explanation seems unsatisfactory. Behavior of this type is not typical for this period alone and has not created systemic risks of this order in the past. The more plausible explanation rather seems to rest in the argument that procyclical regulation created risk management practices with extreme tunnel vision and propelled risk taking behavior of banks to unchartered waters.

15 Since the early nineties, banking regulation provided an excellent platform for balance sheet leveraging, after the introduction of a set of new rules for the risk weightings of different types of asset risks, allowing unlimited positions in investments with high ratings. By mid 2000, absurdly inflated balance sheets of banks were able to attract more investments assets than a sound economy could provide, certainly after the now infamous David X. Li introduced a new technique for the pricing of CDOstructures. The problem of the correlated default risks of the underlying bonds was tackled by Dr. Li with an application of the Gaussian Copula function. This pricing in fact allowed banks to calculate the default risk of the total CDO structure under a set of assumptions. Given this result, it then became obvious how to hedge this risk by providing an equity buffer that equals the anticipated loss. Combined with the eagerness of the American Government to boldly stimulate the housing market, this created a gigantic business opportunity, perceived at zero risk but with high profits in almost unlimited proportions. Certainly, if the mortgage loans could also be attributed to a low standard credit risk environment as can be found in the segment of the subprime debtors. Given the pricing formula, the CDO models could easily be hedged anyhow, reducing the credit risk to near zero. Balance sheet leveraging of this magnitude boosted the ROE of banks to unseen levels but also stressed the liquidity of the financial system to an extreme. Unfortunately, the correct pricing of the risk of the CDO structures relied heavily on the assumptions of correlation between the different types of mortgages, corporate and Government loans. The assumptions on the correlations of default rates with newly introduced subprime loans proved to be dramatically unrealistic. As a result, positions that allegedly were riskless and financed through extreme balance sheet leveraging, now proved to be very risky. Obviously, no additional capital buffers were provided and resulted in substantial loss that quickly eroded the banks capital base. Correlations between various assets have a reputation of being highly erratic and are close to impossible to predict. Swings in correlation patterns have a history of being dramatic, ranging between extreme values over short periods of time. Obviously, building a hedged position based on the correlation in a previous period, can prove to be highly inaccurate over the next period. The idea of having a lucrative, zero risk position then turns into a nightmare. This brought about the fall of England s eldest bank in 1995 when the infamous Nick Leeson hedged a highly leveraged position in Japanese equity with Government bonds. After the Kobe earthquake, the suggested correlations suddenly changed and the zero risk - position eroded the bank s capital in a short span of time. Wrong assumptions on the correlations between corporate and mortgage loans with Government bonds led to the collapse of the highly profiled LTCM hedge fund in Injudiciously calculated correlation between different types of bonds and loans in CDO structures ravaged investments throughout the Western banking system. The Influence of correlations are that devastating since they determine the calculated risk hedges. A sudden switch in these values turns a highly leveraged zero risk position into a shipwrecking experience. The identification and measurement of this type of risk is therefore absolutely crucial in modern risk management that can lift us beyond current measures and assumptions. The accuracy of the models used in risk management should be tested incisively. The first answers most come from accurate back tests of the models. If these tests point to differences in results that are attributed to deviations in the assumed values, risk management should react appropriately and reassess the calibration of the models. Additional, well designed, stress test will be highly instrumental in this process, introducing the concept of regime shifts. This technique allows a risk manager to systemically alter the assumed correlation patterns and assess the resulting shift in the risk position of the banks. Admittedly, the recent official stress test on the European banking system has given a bad reputation to this technique since the results proved to be highly inaccurate. This was mainly caused by a lack of regime shifts that were built into the test. Stress testing the financial system without this specific test is quite pointless and will only confirm certain ill-inspired calculations instead of challenging them. Garbage in, Garbage out. The standard risk management techniques, suggested by the regulators are therefore very much at the core of the current crisis. I wouldn t go as far as certain academics as to point to current days risk management as a chocolate teapot, but there seems to be room for substantial improvement. The false sense of security that was introduced to the financial markets, rampaged the Western economies. In the end, we are not insisting on a harsh judgment on the used risk measure itself but more on underlying assumptions and the resulting increase of systemic risk. E. g. the now infamous value-at-risk is not necessarily biased and inappropriate for the evaluation of financial risk. Of course, it always will be an audacious attempt to reduce risk to just one number and one dimension, as happens in the VaR-approach. This risk-metric mainly becomes a flawed statistic because of a number of underlying assumptions, like the normality of the underlying variables and their correlations. This flaw can easily be remedied by standard techniques, like the Cornish Fisher-Method, resulting in appropriate, modified VaR-numbers, but instead the regulator chooses to insist on fixed assumptions, notwithstanding obvious empirical evidence. Instead of altering erroneous assumptions, the regulator imposes a VaR-multiple as the qualified buffer for market risks in the banking sector. Using 3 times VaR indeed reduces the probability of a bank default to near zero under assumption of a Gaussian distribution of asset returns. This of course is highly unrealistic but leaves the banking system with a false sense of security. I would flag this type of behavior as a main contributor to the formation of systemic risk. If we were to leave the erroneous assumptions and introduce e. g. a standard technique as Chebychev s inequality, we can easily calculate the expected frequency of major bank failures: 4 years... This comes close to empirical results, that point to major upheavals in the banking sector with a ten year frequency. By any standard, this very high probability is very remote from the assumed impossibility implied and suggested by the regulator. This lack of reality in the assumptions is masked by the high degree of complexity of rules, implying a substantial effort from the banks risk management department, leaving little or no room for an inspirational type of risk assessment that goes beyond standard techniques. Flawed rules, resulting from a substandard use of modern statistics and a formover-substance behavior from regulators will only tend to lead us astray. Future generations deserve better and more creative risk measures, that can stand up to an ever more challenging environment. September 2012 Systemic risk is back and here to stay 15

16 Jean-Paul Servais, président de la FSMA September 2012 la fsma : une brève présentation 16 La FSMA et Twin Peaks A l instar de ce qui s est produit dans d autres Etats membres de l Union européenne, le législateur belge a opté pour le passage d un modèle de contrôle intégré à un modèle de contrôle bipolaire, appelé modèle Twin Peaks. Ce modèle prévoit le regroupement, auprès de la banque centrale, du contrôle macroprudentiel et du contrôle microprudentiel des établissements financiers, tandis que la protection des investisseurs, le contrôle des marchés et le contrôle du respect par les établissements financiers des règles de conduite qui leur sont applicables, est confié à une autre autorité de contrôle, l Autorité des Services et Marchés Financiers (Financial Services and Markets Authority ou FSMA). Le modèle Twin Peaks a été instauré en Belgique par la loi du 2 juillet 2010 et par l arrêté royal du 3 mars 2011 mettant en œuvre l évolution des structures de contrôle du secteur financier, qui donne exécution à la loi Twin Peaks du 2 juillet La nouvelle répartition des compétences entre la Banque Nationale de Belgique (BNB) et la FSMA est entrée en vigueur le 1er avril Depuis cette date, la BNB est La FSMA : une brève présentation chargée du contrôle macroprudentiel et du contrôle microprudentiel des banques, des entreprises d assurances et des sociétés de bourse. Outre ses missions traditionnelles relatives à la surveillance des marchés financiers et au contrôle de certains acteurs financiers et de l offre illicite de produits et services financiers, la FSMA exerce également de nouvelles compétences. Celles-ci concernent le contrôle du respect des règles de conduite par les établissements financiers, la surveillance de la commercialisation de produits financiers et l éducation financière du public. Les compétences de la FSMA Les compétences de la FSMA couvrent désormais six grands domaines : le contrôle des sociétés cotées et la surveillance des marchés financiers ; le contrôle du respect des règles de conduite ; le contrôle des produits financiers ; le contrôle des prestataires de services financiers et des intermédiaires ; le contrôle des pensions complémentaires ; la contribution à l éducation financière. par J-P Servais 1. Contrôle des marchés et des sociétés cotées Le contrôle des sociétés cotées consiste pour la FSMA à vérifier les informations diffusées par les sociétés en question. La FSMA veille à ce que ces informations soient complètes, donnent une image fidèle de la société concernée et soient mises à la disposition du public en temps utile et de manière adéquate. La FSMA est également attentive à l égalité de traitement de tous les détenteurs de titres d une société cotée. Enfin, la FSMA surveille le fonctionnement des marchés financiers eux-mêmes en exerçant un contrôle sur les infrastructures de marché. 2. Contrôle des produits L objectif premier du contrôle exercé par la FSMA sur les produits financiers est de contribuer à ce que les produits offerts soient compréhensibles, sûrs, utiles et transparents en termes de frais. Ce contrôle concerne tous les produits financiers qui sont proposés aux consommateurs. Le contrôle porte tant sur l information et la publicité diffusées au sujet des produits financiers que sur le respect de la réglementation relative aux

17 produits. Le régime de contrôle applicable à un produit est déterminé par le cadre légal en vigueur. Le contrôle des produits financiers doit contribuer à améliorer la protection des consommateurs recourant à ce type de produits. Traditionnellement, la protection des consommateurs se focalisait sur la communication à ces derniers d informations suffisantes. L on ne peut toutefois partir du principe que les consommateurs disposent de connaissances et d aptitudes suffisantes pour comprendre ces informations et qu ils sont disposés à consulter les informations disponibles. C est la raison pour laquelle il est nécessaire d intervenir plus tôt dans le processus, à savoir lors du développement même des produits financiers. Cette approche permet d assurer que les nouveaux produits répondent mieux aux besoins des clients auprès desquels ils seront commercialisés. Le moratoire, lancé par la FSMA en 2011 à propos de l interdiction de la commercialisation de produits structurés particulièrement complexes s inscrit entièrement dans cette nouvelle approche. Dans le sillage de la crise financière, la commission spéciale chargée par le parlement belge d examiner la crise financière et bancaire avait recommandé de renforcer la traçabilité des produits financiers. A la suite de cette recommandation, le législateur a doté la FSMA du pouvoir d arrêter des règlements qui peuvent prévoir une interdiction ou des conditions restrictives concernant la négociation de produits d investissement de détail, ou qui sont susceptibles de favoriser la transparence de la tarification et des frais liés à de tels produits. Dans le cadre de ce pouvoir, la FSMA a, en juin 2011, appelé le secteur financier à ne plus proposer aux investisseurs particuliers de produits structurés qui peuvent être considérés comme particulièrement complexes. La FSMA a, dans un premier temps, axé son action sur le marché des produits structurés destinés aux investisseurs non spécialisés, eu égard à l ampleur de ce marché. Avec un encours de 87,2 milliards d euros en 2010 (pour 10,8 millions d habitants), le marché belge fait partie des plus importants d Europe. A titre de comparaison, l encours des dépôts d épargne réglementés dans le secteur privé belge s élevait, fin 2010, à environ 200 milliards d euros et celui des dépôts à terme à environ 35 milliards d euros. Le moratoire concerne la commercialisation, auprès des investisseurs de détail, de produits structurés qui sont considérés comme particulièrement complexes sur la base d un test qui comporte quatre critères. Il s agit tout d abord de vérifier si l information concernant la valeur sous-jacente est suffisamment accessible pour l investisseur non spécialisé. Puis il est vérifié si le produit n utilise pas de stratégie d investissement trop complexe. Le troisième critère concerne la question si la formule de calcul ne comporte pas plus de trois mécanismes pour déterminer le rendement. Le dernier critère concerne la transparence concernant entre autres les frais et le risque de crédit. Après négociations avec le secteur, la FSMA a réussi à obtenir l adhésion volontaire de toutes les entreprises bancaires et d assurance-vie et de très nombreux intermédiaires ont adhéré volontairement au moratoire. Le moratoire a induit une simplification de l offre de produits structurés sur le marché belge. La démarche de la FSMA a suscité un vif intérêt à l échelle internationale et, en particulier, auprès de ses homologues étrangers. 3. Le contrôle du respect des règles de conduite Dans le modèle dit Twin Peaks, qui est entré en vigueur le 1er avril 2011, la FSMA se voit notamment confier le rôle d une autorité de contrôle spécialisée dans le domaine des règles de conduite. Pour pouvoir jouer pleinement ce rôle et intensifier le contrôle des règles de conduite, la FSMA a créé un nouveau service, baptisé Contrôle des règles de conduite. La FSMA a dans un premier temps développé, en collaboration avec plusieurs cabinets de réviseurs agréés, un plan d action et une méthodologie spécifique pour le contrôle du respect des règles de conduite MiFID. La nouvelle approche doit contribuer à la mise en place d une pratique efficace du contrôle des règles de conduite MiFID. La méthodologie adoptée vise à instaurer des dispositifs uniformes et à créer un cadre de référence pour l application des règles de conduite MiFID. Cette approche permet à la FSMA de se positionner efficacement et de faire du benchmarking. La FSMA peut, sur la base des contrôles effectués, déterminer les thèmes pour lesquels des améliorations sont encore possibles et publiera, si nécessaire, des recommandations à ce sujet. 4. Le contrôle des prestataires de services financiers et des intermédiaires La mission de la FSMA à l égard des prestataires de services financiers consiste essentiellement à assurer le contrôle prudentiel des sociétés de gestion d organismes de placement collectif et des entreprises d investissement ayant demandé l agrément comme société de gestion de portefeuille et de conseil en investissement. Le contrôle a pour objectif de veiller à ce que les entreprises contrôlées soient en mesure de respecter à tout moment leurs engagements et d assurer la continuité de leur exploitation. Les tâches du contrôle portent entre autres sur l analyse de l organisation administrative et comptable et le système de contrôle interne, la qualité du management et de la gestion, les qualités des actionnaires, l évolution des activités et des risques, ainsi que le suivi de la structure financière dans son ensemble. Le respect des conditions d agrément et d exercice est surveillé de façon continue. Le contrôle des intermédiaires, une population très importante de plus de personnes, consiste à contrôler l accès à la profession d intermédiaire d assurances et de réassurances ou d intermédiaire en services bancaires et en services d investissement. Cette activité comprend principalement le traitement des demandes d inscriptions dans les registres respectifs et la surveillance du respect des conditions légales à remplir pour pouvoir conserver cette inscription. 5. Le contrôle des pensions complémentaires La FSMA assure le contrôle des pensions complémentaires que les travailleurs salariés ou indépendants constituent dans le cadre de leurs activités professionnelles (ce que l on appelle le deuxième pilier de pension ). La FSMA veille au respect de la législation sociale relative au deuxième pilier de pension et surveille la santé financière des institutions de retraite professionnelle, qui assurent la gestion des régimes de pension complémentaire. 6. Contribution à l éducation financière La loi Twin Peaks confie à la FSMA la mission de contribuer à l éducation financière du public. Cette nouvelle attribution s inscrit en parfaite complémentarité avec les autres missions de la FSMA visant à protéger les investisseurs et les consommateurs de produits financiers. Conclusion La FSMA a été dotée de six grands domaines de compétences. L interaction harmonieuse entre toutes ces compétences doit contribuer à assurer un contrôle adéquat du secteur financier et à protéger le consommateur de produits financiers. En exerçant ses compétences et en développant ses actions, la FSMA entend tirer les leçons de la crise et contribuer au rétablissement de la confiance dans le secteur financier et le système financier. September 2012 la fsma : une brève présentation 17

18 Jean-Paul Servais, Voorzitter van de FSMA September 2012 de fsma kort voorgesteld 18 De FSMA en Twin Peaks Zoals ook in andere lidstaten van de Europese Unie is gebeurd, heeft de Belgische wetgever gekozen voor de overstap van een geïntegreerd toezichtsmodel naar een bipolair toezichtsmodel, het zogenaamde Twin Peaks-model. In dit model worden het micro- en macroprudentieel toezicht op de financiële instellingen gebundeld bij de centrale bank, terwijl de bescherming van de beleggers, het toezicht op de markten en het gedragstoezicht op die financiële instellingen bij een andere toezichthouder worden ondergebracht, namelijk de Autoriteit voor Financiële Diensten en Markten (Financial Services and Markets Authority of FSMA). Het Twin Peaks-model werd in België ingevoerd bij wet van 2 juli 2010 en bij koninklijk besluit van 3 maart 2011 betreffende de evolutie van de toezichtsarchitectuur voor de financiële sector waarmee uitvoering gegeven wordt aan de Twin Peaks-wet van 2 juli Op 1 april 2011 is de nieuwe bevoegdheidsverdeling tussen de Nationale Bank van België (NBB) en de FSMA in werking getreden. Sinds die datum is de NBB belast met het micro- en macroprudentieel toezicht op de banken, de verzekeringsondernemingen en de beursvennootschappen. De FSMA heeft naast haar traditionele opdrachten in De FSMA kort voorgesteld verband met het toezicht op de financiële markten, op bepaalde financiële actoren en op het onrechtmatige aanbod van financiële producten en diensten, ook nieuwe bevoegdheden gekregen. Die hebben betrekking op het toezicht op de naleving van de gedragsregels door de financiële instellingen, het toezicht op de commercialisering van financiële producten en de financiële vorming van het publiek. De bevoegdheden van de FSMA De bevoegdheden van de FSMA beslaan voortaan zes grote domeinen: het toezicht op de genoteerde vennootschappen en op de financiële markten; het toezicht op de naleving van de gedragsregels; het toezicht op de financiële producten; het toezicht op de financiële dienstverleners en tussenpersonen; het toezicht op de aanvullende pensioenen; het bijdragen tot de financiële vorming. 1. Toezicht op de genoteerde vennootschappen en op de financiële markten Het toezicht op de genoteerde vennootschappen houdt in dat de FSMA waakt over de informatie die door deze vennootschappen wordt verstrekt. De FSMA ziet erop toe dat deze informatie volledig is, een getrouw beeld geeft en tijdig door J-P Servais en op correcte wijze ter beschikking wordt gesteld van het publiek. Daarnaast ziet de FSMA toe op de gelijke behandeling van alle houders van effecten van een genoteerde vennootschap. Voorts houdt de FSMA toezicht op de werking van de financiële markten zelf door controle uit te oefenen op de marktinfrastructuren. 2. Producttoezicht Met het toezicht dat de FSMA houdt op de financiële producten, wil zij er in de eerste plaats toe bijdragen dat de aangeboden producten begrijpelijk, veilig, nuttig en kostentransparant zijn. Het toezicht heeft betrekking op alle financiële producten die aan de consumenten worden aangeboden. Het slaat zowel op de informatie en de publiciteit die over financiële producten verspreid wordt als op de productreglementering zelf. Het toezichtsregime voor een product wordt bepaald door het wettelijke kader dat van toepassing is. Het toezicht op de financiële producten moet bijdragen tot een betere bescherming van de consument van die producten. Traditioneel lag de focus van die consumentenbescherming op het ter beschikking stellen van voldoende informatie aan de consument. Men mag er echter niet vanuit gaan dat de consumenten voldoende kennis en vaardigheden hebben om die informatie te begrijpen, noch dat zij bereid

19 zijn de beschikbare informatie te raadplegen. Om die reden is het nodig om in een vroeger stadium in te grijpen, namelijk bij de ontwikkeling zelf van het financiële product. Op die manier kan ervoor gezorgd worden dat nieuwe producten beter beantwoorden aan de noden van de cliënten aan wie ze verhandeld zullen worden. Het moratorium op de commercialisering van bijzonder ingewikkelde gestructureerde producten dat in 2011 door de FSMA is gelanceerd, past volledig in die nieuwe benadering. In de nasleep van de financiële crisis heeft de bijzondere commissie die door het Belgische parlement was belast met het onderzoek naar de financiële crisis en de bankencrisis, de aanbeveling geformuleerd om de traceerbaarheid van financiële producten te verbeteren. In navolging van deze aanbeveling werd de FSMA de bevoegdheid verleend om reglementen te bepalen die een verbod of beperkende voorwaarden kunnen bevatten voor de verhandeling van retailbeleggingsproducten, of die de transparantie kunnen bevorderen over de tarifering en de kosten van dergelijke producten. In het kader van deze bevoegdheid heeft de FSMA de financiële sector in juni 2011 opgeroepen om niet langer gestructureerde producten die als bijzonder ingewikkeld kunnen worden beschouwd aan te bieden aan particuliere beleggers. De FSMA heeft in een eerste fase de markt van gestructureerde producten voor nietgespecialiseerde beleggers aangepakt omwille van de omvang van deze markt. Met een uitstaand bedrag van 87,2 miljard euro in 2010 (voor 10,8 miljoen inwoners) behoort de Belgische markt tot een van de grootste in Europa. Ter vergelijking, einde 2010 had de particuliere sector in België voor bijna 200 miljard euro uitstaan op gereglementeerde spaardeposito s en circa 35 miljard euro op termijndeposito s. Het moratorium richt zich op de verhandeling van gestructureerde producten aan retailbeleggers die als bijzonder ingewikkeld worden beschouwd op basis van een test die bestaat uit vier criteria. Allereerst wordt nagegaan of de informatie over de onderliggende waarde voldoende toegankelijk is voor de niet-gespecialiseerde belegger. Vervolgens wordt nagegaan of de beleggingsstrategie van het product niet te ingewikkeld is. Voor het derde criterium wordt nagegaan of de berekeningsformule niet meer dan drie mechanismen omvat om het rendement te berekenen. Het laatste criterium heeft betrekking op de transparantie van o. a. de kosten en het kredietrisico. Na onderhandelingen met de sector, is de FSMA erin geslaagd om alle instellingen uit de bank- en levensverzekeringssector alsook talrijke tussenpersonen ervan te overtuigen het moratorium vrijwillig te onderschrijven. Het moratorium heeft geleid tot een vereenvoudiging van het aanbod van gestructureerde producten op de Belgische markt. De demarche van de FSMA heeft veel interesse gewekt op internationaal niveau en meer bepaald bij de buitenlandse toezichthouders. 3. Toezicht op de naleving van de gedragsregels In het zogenaamde Twin Peaks-model, dat sinds 1 april 2011 in voege is, krijgt de FSMA onder meer de rol van gespecialiseerde gedragstoezichthouder. Om die rol voluit te kunnen spelen en het gedragstoezicht te intensifiëren, heeft de FSMA een nieuwe dienst Toezicht op de gedragsregels opgericht. De FSMA heeft in eerste instantie, in samenwerking met een aantal erkende revisorenkantoren, een actieplan en een specifieke methodologie uitgewerkt voor het toezicht op de naleving van de MiFIDgedragsregels. De nieuwe benadering moet bijdragen tot een efficiënte praktijk van het toezicht op de MiFID-gedragsregels. Via de nieuwe methodologie wordt tevens een uniforme aanpak verzekerd en wordt een referentiekader gecreëerd voor de toepassing van de MiFID-gedragsregels. De nieuwe aanpak zal de FSMA in staat stellen efficiënt stelling te nemen en aan benchmarking te doen. Zij zal op basis van de uitgevoerde controles kunnen vaststellen voor welke thema s er nog verbeteringen mogelijk zijn en zal daarover indien nodig aanbevelingen publiceren. 4. Toezicht op de financiële dienstverleners en tussenpersonen De opdracht van de FSMA ten aanzien van de financiële dienstverleners houdt in essentie in dat zij prudentieel toezicht uitoefent op de beheervennootschappen van instellingen voor collectieve belegging en op de beleggingsondernemingen die een vergunning als vennootschap voor vermogensbeheer en beleggingsadvies hebben aangevraagd. Dat toezicht heeft tot doel erop toe te zien dat de vennootschappen onder toezicht hun verbintenissen te allen tijde kunnen nakomen en de continuïteit van hun bedrijfsuitoefening kunnen waarborgen. De toezichtstaken betreffen onder andere de analyse van de administratieve en boekhoudkundige organisatie en het interne controlesysteem, de kwaliteit van het management en het beheer, de geschiktheid van de aandeelhouders, de evolutie van de activiteiten en de risico s, alsook de followup van de financiële structuur in zijn geheel. Ook op de naleving van de vergunnings- en bedrijfsuitoefeningsvoorwaarden wordt continu toegezien. Het toezicht op de tussenpersonen, die met meer dan personen een zeer omvangrijke populatie vormen, komt erop neer de toegang te controleren tot het beroep van tussenpersoon in bank- en beleggingsdiensten alsook tot het beroep van verzekerings- en herverzekeringstussenpersoon. Dit houdt voornamelijk de behandeling in van de inschrijvingsaanvragen voor de respectieve registers en het toezicht op de naleving van de wettelijke voorwaarden om die inschrijving te kunnen behouden. 5. Toezicht op de aanvullende pensioenen De FSMA is bevoegd voor het toezicht op de aanvullende pensioenen die werknemers en zelfstandigen opbouwen in het kader van hun beroepsactiviteiten (de zogenaamde tweede pijler ). De FSMA houdt toezicht op de naleving van de sociale wetgeving met betrekking tot de tweede pensioenpijler. Zij ziet tevens toe op de financiële gezondheid van de instellingen voor bedrijfspensioenvoorziening (IBP s) die instaan voor het beheer van pensioenregelingen. 6. Bijdrage tot de financiële vorming. De Twin Peaks-wet heeft de FSMA de opdracht toevertrouwd om bij te dragen tot de financiële vorming van het publiek. Deze nieuwe bevoegdheid vormt een perfecte aanvulling op de andere opdrachten van de FSMA waarbij de bescherming van de beleggers en de consumenten van financiële producten centraal staat. Conclusie Aan de FSMA werden zes grote bevoegdheidsdomeinen toegekend. Een harmonische interactie tussen al deze bevoegdheden moet bijdragen tot een passend toezicht op de financiële sector en de bescherming van de consumenten van financiële producten. Door deze bevoegdheden uit te oefenen en haar initiatieven verder uit te werken, wenst de FSMA de nodige lessen te trekken uit de crisis en bij te dragen tot het herstel van het vertrouwen in de financiële sector en het financiële systeem. September 2012 de fsma kort voorgesteld 19

20 Atila Kas Vice-President of IIA Belgium & Chief Internal Auditor at Generali Belgium September 2012 ready to audit solvency II? 20 What is Solvency II? It is a fundamental review of the capital adequacy regime of the European insurance industry. It aims to establish a revised set of EU-wide capital requirements and risk management standards. The ultimate goal is to protect insurance policy holders across the European market. Ready to Audit Solvency II? by Atila Kas It was important to associate the Belgium Insurance federation (Assuralia) as being one of the key stakeholders in the Solvency II context. The project aimed at clarifying the internal auditor s role within Solvency II and at providing guidance for the internal auditors in the insurance sector. The Solvency II regime creates a number of drivers for change in the (re)insurance undertaking management and in its internal control system. As such, it imposes internal audit functions to re-align themselves and update their audit plans to address the increased assurance requirements that Solvency II is likely to demand. This means that internal audit functions will need to carry out periodical reviews (following a risk-based audit planning approach) over corporate governance, risk management, internal model, (supervisory) reporting, ORSA and data quality control processes in order to provide the organisations governing bodies with assurance over their new areas of responsibility. Also, the need has arisen to clarify internal audit s interaction with the validation processes. IIA Belgium initiative: The IIAs members (CAE, Chief Auditors, Internal Audit Managers) working for the leading companies within the Belgium Insurance Market joined the initiative launched by the Institute in 09/2010 by working together on the available regulations, directives and documentations in order to produce an overview on the role of the IA function. A position paper on The Role of Internal Audit in Solvency II provides guidance to the members on the permissible roles for an internal auditor in the Solvency II context and on the safeguards needed to protect his/her independence and objectivity. Hence, the position paper identifies assurance activities and consulting services related to Solvency II which could be carried out by Internal Audit while complying with the International Standards for the Professional Practice of Internal Auditing. It was important to associate the Belgium Insurance federation (Assuralia) as being one of the key stakeholders in the Solvency II context.