Shedding Light on Non-Financial Risks – a European Survey

Shedding Light on Non-Financial Risks – a European Survey — January 2012

3. The Need for Change in Regulation and Risk Management Practices

Looking at the country groups, the United Kingdom stands out, compared to average, as being significantly less in favour of all proposed measures in favour of transparency, information and governance. Uncertainties on the practical benefits of having independent administrators also mean that respondents are quite influenced by the law and organisation in their country of origin; respondents from the United Kingdom (where there is one sole administrator, usually the fund manager) are against an increased role of administrators, while respondents from continental Europe (where a tradition of corporate-type funds exists in some countries) favour such requirements.

with few consequences to them. Imposing legal penalties on rating agencies is however the option that has received the lowest support in the current theme. So, it seems that too little attention has been given to transparency towards the end investor (Amenc and Sender, 2011) – the ESMA has focused more on how managers use information such as that from rating agencies rather than on how managers communicate relevant information, but the regulation of rating agencies itself is seen primarily as a digression by regulators rather than as a genuine regulatory contribution to the management of non- financial risks.

Figure 3.2.1: How much do you agree with the following assertions regarding regulations on transparency, information and governance for non-financial risks?

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An EDHEC-Risk Institute Publication