There is increasing awareness amongst practitioners that companies must confront systemic risks, including those arising from the environmental and social areas such as climate change and inequality, that may result in stranded assets, disruption to supply chains, as well as economic and political instability. There has been limited discussion of what these broad systemic risks mean for corporate governance regulation and practice; how these medium and long-term risks can be assessed and reflected in business, investment, and insurance strategies; and how regulators can best engage with these risks. Discussants will examine how companies, long-term investors, and insurers relate to pertinent systemic risks, and identify best practices and potential reforms for corporate governance, policy-making, regulation, and reporting.
The event will be divided into two panels:
1 - The role of companies and regulators
In the context of the 2017 FRC review of the UK Corporate Governance Code, the first panel will examine how companies identify, manage and report on systemic risks. The Code instructs directors to carry out “a robust assessment of the principal risks facing the company, including those that would threaten its business model, future performance, solvency or liquidity” (C.2.1). To explore what this means in the context of systemic risks, the panelists will discuss how the Code may evolve to provide guidance to help companies to put in place the right risk management systems and look into the future to manage them proactively.
2 - Investor strategies for considering systemic risks
The second panel will explore best practice amongst forward-looking investors. Considering the capacity for (institutional) investors to engage with companies and provide guidance through market-based activity, panelists will consider how investors can integrate the consideration of systemic risks into their investment and engagement strategies. We will explore the benefits and limitations of stewardship-based approaches for tailoring investment strategies and engaging with investee companies on these issues.
- Moderator: Dina Medland, Independent writer and Forbes Europe contributor
- Hugh Shields, Senior Accounting Expert, Huawei
- Bruce Duguid, Director, Hermes EOS
- David Stark, Senior Vice President, Marsh
- Gerhard Schnyder, Reader in Comparative Management, King’s College London
10:45 Coffee break
11:00 Investor strategies for considering systemic risks
- Moderator: David Pitt-Watson, Executive Fellow at London Business School
- Amélie de Montchalin, Vice-President for Policy & Foresight, AXA Group
- Kirsty Collins, Senior Analyst, Global Responsible Investment, Aviva Investors
- David Shammai, Senior Corporate Governance Specialist, APG
12:15: Closing: Nathan Fabian, Director of Policy and Research, UNPRI
12:45: Networking lunch
The event is free of charge but registration is required and places are limited. Please register your interest filling in the form: link.
This event is the second in a series of three on corporate governance. More information about the first event on the key principles for a new corporate governance model here. The last event will discuss the evolution of corporate accounting practice and policy, taking into account the needs of long-term investors and an integrated approach to value creation, as well as provide guidance to companies on how to comply with a rapidly evolving regulatory environment.