FAIM is moving into its next three-yearly cycle and, with it, is updating its requirements from 3.1 to 3.2. Steve Jordan spoke to John Prooij, Project Manager Quality & Risk at FIDI to find out what that means for movers.
It appears that the FAIM (FIDI Accredited International Mover) programme has been a great success since it was first introduced to the world in 1998 and became mandatory for all FIDI members four years later. According to John Prooij at FIDI it is becoming increasingly well known in the corporate world and with Relocation Management Companies (RMCs) leading to it becoming a pre-requisite for some contracts. But, as with any quality programme, FAIM has to evolve to ensure that it remains relevant to the market. As FAIM 3.1 morphs into FAIM 3.2, that evolution has continued.
Intermediate auditing
Quality audits for FAIM have always been performed independently by consultants Ernst & Young (EY) every three years. John explained that the intervening period was felt to be too long, but it would be very expensive to ask EY to audit more often. For that reason, FIDI has recently introduced its intermediate self-assessment through which affiliates are required to provide evidence that they have addressed any issues that were highlighted during their most recent EY audit. “This helps to maintain the focus on quality from one EY audit to another,” he said.
Credit Risk Barometer (CRB)
FIDI has also introduced a pilot financial assessment into 3.2 called the Credit Risk Barometer (CRB). This assessment is performed remotely by EY. It has a simple aim: to establish whether a FIDI affiliate can pay its bills in the short and long term. “There has been huge interest from the big bookers and RMCs about this,” said John. “I am really looking forward to having the data available so FAIM certified movers will be able to demonstrate their good financial health.”
The plan is for all FIDI affiliates to provide documentation that will allow EY to establish their solvency, liquidity and profitability. The data will then be converted into ratios that, when fed through a software algorithm, will provide a single-figure credit rating showing whether a company is high, medium or low financial risk. This process will be repeated every year.
John said that the outcome of a company’s financial assessment will not be shared. Affiliates will receive an individual EY CRB report outlining their own results. The information will be very helpful to FIDI to measure risk trends and will provide assurance to customers and agents that a company is sufficiently financially stable to pass the test. “After one year we will have a perfect financial profile of the membership,” said John. “High risk affiliates might be required to provide a guarantee from, for example, a group or a bank.”
Unlike the FASI (FIDI Affiliates’ Secured Invoices) formerly known as PPP, the CRB will be predictive, rather than reactive, and so will provide much greater protection for customers and instil greater confidence in the FIDI membership. Access to a company’s financial information is strictly limited to EY auditors and FAIM Coordination Centre (FCC) staff. All financial information will be handled in the strictest confidence through a secure online platform fully aligned with FCC’s privacy policy.
A focus on compliance
Compliance is centre-stage in 3.2 as well and John said he is very happy about the increased scrutiny in supply chain management. FAIM focusses on a company’s efforts to mitigate risks from breaches in data protection, bribery and corruption of any kind. “In the future, if you can demonstrate that you are the best in your field for supply chain, you will get the job,” said John. “For me, everything in compliance starts with procedures and training and companies need to demonstrate that they do their upmost, even at CEO level, to mitigate the risks.”
John said that companies should have documented procedures to minimise risk, keep minutes of meetings, provide appropriate training and keep careful records of what was included and who took part, and communicate well with their suppliers to make it clear what is acceptable and what is not. By doing this he believes that companies will have an adequate defence should a breach occur and be able to provide confidence to their customers that they are doing the right thing. “If you have something in place but it’s not perfect, you’ll be OK,” he said. “If you show that you don’t care, you will have a problem.”
Personnel screening
A company is only as good as its people, so employment screening is an important part of FAIM 3.2. John said that RMCs and corporate accounts have told him that they need to ensure that companies check their employees’ backgrounds and that this is becoming a global requirement. He said that the process is simple, but the detail will be very in line with local regulations. For example, the law relating to what a prospective employer can ask an applicant varies from country to country. “Companies should check the law in their own countries and embed those rules within their procedures,” he said. “The procedure could then include checks on a person’s educational qualifications, experience, references and criminal record.” John also emphasised that the procedure should include details of how that sensitive information is stored and accessed at the company. “The procedures should be applied throughout the organisation in a uniform way.”
Diminishing returns
I wondered if we might have reached a level at which an increasing level of scrutiny resulted in diminishing returns for affiliates. With every increasing level of granularity, so the incremental benefits reduce. John agreed and felt that the same argument also applies to the audit process but does not believe that FIDI has reached that point. He also said that it depends on the company: an affiliate working exclusively in the corporate market would have a different perspective from one dealing more with private individuals. “We will reach that point at some time, but I don’t have a crystal ball to say when that will be. For me this is still a necessity and I believe I am aligned with FIDI’s strategic aims.”
Sanctions
Of course, now that FAIM is mandatory for FIDI membership, the ultimate sanction of expulsion from the organisation is ever present for any company that is unable to comply. As the requirements of FAIM develop, so that risk increases. But although failure at the FAIM audit will mean expulsion from FIDI, a breach in compliance might not. For John, it’s the process that’s important. If a breach occurs, the fact that a company has followed an approved process may well provide a reasonable defence. However, it would then be a matter of assessment and judgement for the FIDI Board to decide whether it was appropriate for the company to remain in membership.
The next three years
FAIM 3.2 came into force on 1 January, 2019. Information was sent out in July last year so everyone should know what is required of them. Any EY audit over the next three years will be to FAIM 3.2 so, if a company’s audit is imminent, they need to make sure they comply now. If their next audit is not for two years, there is no longer a period of relaxation as John will be requiring evidence of compliance with 3.2 through the annual self-assessments. This will, of course, be fully audited at the next EY visit. “The idea is to improve consistency thereby maintaining quality all the time, not just for the audit,” said John, explaining that there was a wide range of advice available through training, workshops and telephone support. “Our objective in FIDI is to take our whole membership to the next level leaving nobody behind.”
What’s the plan for 3.3? John said he has some ideas, but they are for the FIDI Board to discuss. He did say, however, that fortunately for FIDI the present Board has a vision for the future and is thinking more strategically, rather than from conference to conference. “What the future holds we don’t know. We’ll just have to wait and see.”
