The rise of the do-it-all risk manager

Education, education, education. In an increasingly competitive and complex world, successful risk managers will have to upgrade their skills, broaden their responsibilities and prove their value, according to French risk management association Amrae’s general delegate Bénédicte de Luze.

“The new challenge for risk managers is to prove to senior management that they are adding real value,” she says.

“Most tend to stay in particular roles, either in insurance buying or enterprise risk management. But this needs to change. To move forward, they need to combine these and become ‘total risk managers’.

“They need to be able to show their employers they can not only advise on managing risk but they can advise on the right risks to take, the risks that present opportunities. They need to show that they can take on the big projects and make a difference. This is the challenge: to advise on positive risk-taking.”

Far from seeing the current challenges facing businesses across Europe as something that should hold back risk managers, de Luze sees the economic crisis as an opportunity – a chance  to break out of the confines of traditional roles and prove your ability to innovate.

“In the present climate, companies don’t have a lot of time and money,” she says. “We have had an economic crisis and all around the world there is a growing competitiveness – the rise of China, India and Brazil.

“Senior managers need to be advised on how to compete and succeed, and the risk managers should be there to show them how to take the right risk. Not the high risk, the risk that means you can lose everything, but the risk that might give you the edge you need.”

Motivation for business

Self-motivation is a crucial skill in achieving this objective. A risk manager needs to be assertive, proactive and willing to find out for themselves what training opportunities there are. They should use these skills to ensure that they have a 360-degree view of operations and are able to take their company forward.

“Maybe your company does not have a captive in place: a good risk manager will still know all about captives and be able to offer advice on the pros and cons of introducing such a programme at their company,” says de Luze. “They will need to know about all the activities they could potentially take on, as well as those they already take on.

“They need to be bold and proactive. The new risk manager – the risk manager for tomorrow – needs to demonstrate they can take on the role of enterprise risk management [ERM] and risk map presentation and insurance, that they can do it all.”

Support for moving towards this can be found within Amrae, as well as other professional bodies such as Ferma.

“Looking internationally, there is already a move to create this kind of framework and we need to be doing this [in France] as well,” adds de Luze.“We will present this framework at the next Ferma congress.

“This is also where Amrae comes in – it is the role of the organisation to help risk manag­ers become more skilled and to get complete control of their role within a company.

“The insurance manager needs to learn about ERM, the ERM guy needs to learn about insurance. They have to ask to take a new direction. They have to be able to convince their employers that they can take the new function on .”

Risk managers know this is not an easy task. Sometimes senior managers don’t want to listen to risk managers; sometimes they don’t really value the function or are simply in denial. “There can be a problem that manage­ment does not listen enough to risk managers, but if this is the case, it is up to the risk managers to make them listen,” says de Luze.

“Start with a new project, demonstrate how risk management can improve and add value to that. Then, after that success, ask for wider implementation.”

From implicit to explicit

To demonstrate her point, de Luze cites a major French network/telecomms provider, which discovered it was having big problems with a product.

“At first the risk manager was saying ‘be careful, be careful’, but the senior managers didn’t want to hear,” she says. “But the risk manager was persistent; he took an analytical, reflective approach and showed his managers the nature of the risks they were taking.

“They were impressed and they learned the real value he was bringing to the company. In this case, the crisis generated the risk management process.”

Another example is a company with a sub­stantial long-term industrial project in India. “The risk management team persuaded them to implement a full risk management pro­gramme that quickly demonstrated a huge number of problems and risks at the factory,” says de Luze. “The management was able to act on this and through the programme they learned the value of risk management – and are now very supportive.”

Everyone knows that with risks come opportunities. But this applies to a risk man­ager’s personal and career development as much as it does to the company for which they work. To be successful, the manager needs to see their chance and act. “The risk manager needs to be a real adviser,” says de Luze. “And be ready to take on anything.