The risk and insurance manager explains how she grapples with the risks and challenges facing the global luxury, sports and lifestyle company.
Reminiscing over her career at the France-based luxury, sport and lifestyle giant Kering, risk and insurance manager Anne-Marie Fournier says: “The Kering group has nothing in common with the company I joined 10 years ago.”
One of the biggest jobs of its kind in France, Fournier is working in a group with more than 35,000 far-flung employees who, between them, control 23 brands, including Gucci, Balenciaga, Alexander McQueen and Stella McCartney in the luxury arm, and with Puma dominating the sports and lifestyle business. Indeed, with its €9.7bn in revenues, Kering has recently acquired different brands, and Fournier constantly tries to anticipate M&A activity so that she is ready when the time comes.
When Fournier joined what is now Kering, the company was known as PPR and was finalising its conversion from a building materials business into today’s apparel and accessories conglomerate. It was rapidly divesting one long-established business after another and acquiring new ones in a breakneck transformation to a brand-based operation.
In the past few years, Fournier has found herself taking on the risk management of, among many other brands, Gucci, Puma and other sports and lifestyle brands, fashion house Brioni, youth-oriented clothing group Volcom and Chinese fine jewellery brand Qeelin.
Last year alone, Fournier oversaw three new acquisitions, including that of UK designer brand Christopher Kane. In addition, reflecting its dramatic change of direction, the group was renamed Kering.
Supply chain management
Thus, with so many acquisitions, Fournier’s responsibilities have multiplied greatly since she first joined, particularly in respect of the management of supply chains. Many multinationals regard their supply chains as a means to an end – the process of linking the factory with the consumer in a mainly logistical exercise. However, this is not the case at Kering, which sees the supply chain as a seamless entity; the DNA of its operations.
“This business is a supply chain,” says Fournier with a laugh. “The common element to all Kering’s brands is that they are operating within a supply chain through many different channels. This is our speciality and we know how to do it. We control the supply chain from beginning to end – design, production, transportation, stores… Kering has people everywhere checking on the supply chain, conducting audits to ensure everything happens in accordance with our principles, in terms of social, environmental and other principles.”
As well as ensuring the observance of these principles, Fournier also oversees the technical management of the supply chain such as training for preventive measures and insurance issues, the identification and measurement of financial exposures and so on.
In addition to these responsibilities, Fournier is also vice-president of AMRAE, the French risk management association, for which she produces thought-provoking papers. She is also a frequent guest on insurance channel television, where she debates current issues.
Multitude of risks
Other issues Fournier frequently grapples with include pandemics, sustainability, emerging risks, equality and scenario testing.
In her opinion, pandemic is one area where multinationals are not receiving enough help. The Ebola crisis, hurtling across national and geographic borders, is the latest example and it has found the insurance industry wanting.
“To combat such cross-border risks, new ways of thinking are required,” she insists. “The old procedures cannot be applied. The insurance industry is not delivering the necessary non-property solutions. After all, these pandemics are not like a fire in a factory, which is easily dealt with.”
Describing the extent of multinationals’ exposure to such pandemics as “frightening”, she has no hesitation in laying down the gauntlet. Fournier believes the insurance industry must make better use of the reams of data available to it and devise products that protect multinationals better. So far, she says, the actuary-driven solutions she has seen are inadequate: “Mathematical calculations are not enough.”
Because Kering is concerned with sustainability, a significant part of Fournier’s job is to ensure the company follows what it preaches. “Kering brands produce high-quality products in a way that respects the planet,” explains Fournier. “It would be highly contradictory if it did otherwise.”
In 2014, Kering was one of only 10 French companies to be awarded an A grade by the Carbon Disclosure Project, the UK-based group, for its progress in cutting carbon emissions. The company also tops the global Dow Jones sustainability index rankings in its sector. Further, in October, Kering officially endorsed the international group involved in the preservation of crocodiles, a species that has been abused in the past by the fashion industry. That followed last year’s commitment to do the same for pythons.
New risks and promoting equality
Like other risk managers, Fournier is presiding over the emergence of 3D production, which she sees as a genuine revolution in production methods. As she points out, in China, recently, 20 houses were built in 24 hours using 3D printing methods. This is nothing but revolutionary.
Kering is cautiously trying out this new technology by developing prototype production, but the company has no intention of being left behind. “The consequences are probably huge for all types of production,” assesses Fournier. “It will change our lives. Kering has to adapt. I don’t yet know how, but it will have to adapt.”
Although France claims an unusually high percentage of women in risk management – at a conference in Germany in November there were only few women, four French – Fournier is keen to promote gender diversity further.
“Gender diversity is not a problem in France,” she points out, citing a list of big companies such as Schneider, Thales and GDF Suez that boast female risk managers.
Recently, Kering underlined its commitment to women power – a highly rational strategy because, after all, most of the customers for its luxury brands are women – by appointing China’s professor Yuan Feng, outspoken voice of gender equality, to the board of the Kering Foundation, which is dedicated to promoting women’s rights and fighting violence against women.
In such a widespread group cultural equality is a constant issue. Kering’s 35,000 employees comprise Italian, Chinese, English, French and German staff.
“It’s a challenging environment, but [Kering tries to instil] common values of respect, fairness, gender and other kinds of diversity,” she says. “It’s important that everybody communicates with one another on the same cultural platform.”
In the interests of installing cultural fairness across the group, Kering deploys two highly effective tools. First, English is the common language. Second, the company is run under a flat hierarchy, which enables employees to raise issues before they turn into problems.
Kering does not make unreasonable demands of its executives. Unlike many American multinationals, the group expects its employees to take an adequate amount of holidays and encourages them to spend time with their families. “I never work at weekends,” says Fournier.
To keep up with the pace of change, Fournier and her team have developed a strategy of trying to anticipate the future through various scenarios. “We constantly analyse current and likely exposures,” she explains. “We are always looking at how we might manage a M&A.”
It might seem that Fournier’s job is made more difficult – but ultimately more satisfying – by the company’s declared policy of giving a generous amount of autonomy to each brand, especially in terms of creativity. With 23 brands spread across two rapidly growing segments – luxury and sport and lifestyle– this is challenging. However, the overarching nature of her responsibilities does not appear to faze her.
“This is what I enjoy about this business; it’s always changing.”
The path to risk management
A native of Normandy like International Monetary Fund managing director Christine Lagarde, whom she admires greatly, Fournier entered risk management from the relatively sedate area of the insurance industry in September 2004. “I wanted to be more involved in the action,” she recalls. She came from 100 year-old Gras Savoye, the brokerage group where she was responsible for the biggest clients. Before that, Fournier worked at the marine business of UK’s Sedgwick group, which partly accounts for her fluent English.
Fournier sees similarities between insurance broking and her current position in the sense that both jobs require her to reconcile differing viewpoints and achieve a consensus before a strategy can be implemented.
She has not been disappointed in her desire to be immersed in the action. Kering has a presence in some 120 countries. Challengingly for the risk management team, some 38% of revenues derive from emerging markets.
l Since 2004: in charge of risk management and insurance at Kering
l Held positions with Sedgwick, in the marine activities; SGCA (Aon Group), as an account executive in charge of some international accounts; and Gras Savoye as director of its global casualty department
l Also in charge of the Group Reinsurance Captiv
l Since 2008: vice-president of AMRAE