Risk management is growing in stature within businesses, but there is more work to be done, according to Airmic’s technical director, Julia Graham. Speaking at the launch of a report by ACE on the changing role of the risk manager, Julia said that risk management is transitioning from a discipline to a profession. “There is no doubt that we are tomorrow’s risk leaders,” she said. “But we absolutely need to make sure that risk managers are equipped with the right skills.”
Speaking in her capacity as president of the Federation of European Risk Management Associations (FERMA) ahead of its conference in Venice this month, Julia (see photo) said that certification will play a key role. “The challenge of any profession is to specialise and risk management is a bit like that…but you need a basic grounding which is what certification is about.”
She also argued that risk managers must accept the way the world is changing and be ready to adapt by acquiring new types of skills, from scenario modelling to networking. “Collaboration will become more important. Work with your head of I.T., work with your company secretary. The future risk manager will have to be a real networker as well as a leader and I think that will be a new skill for many.”
The report from ACE, based on a survey of 500 senior risk managers across Europe, Middle East and Africa, shows that risk managers are gaining greater eminence within businesses across Europe, and that the UK is leading the way driven by regulatory compliance. For example, more than three quarters of European risk managers believe that their influence over strategic decision making has grown over the past three years. Meanwhile, more than two-thirds said that their level of influence in the board or executive team has increased.
Key findings of ACE survey
The changing role of the risk manager: Key findings of ACE survey:
• 78% believe risk managers’ influence is greater now than three years ago;
• 78% believe risk managers have greater influence around strategic decision-making;
• 79% believe the risk manager is increasingly a business partner, working collaboratively with relevant functions;
• 77% believe balancing the need for centralised risk management and risk management on the ground is highly challenging;
• 83% believe risk managers and IT professionals must work more closely together to fully comprehend the risks posed by technology;
• 81% believe the use of big data and associated analytics will transform risk management;
• 81% believe good risk managers should also be innovators;
• 78% believe certification and professionalisation of standards are key to the future of risk management.
Andrew Kendrick, CEO of ACE European Group, said that with businesses facing more complex risks, “the most important thing is getting risk managers up the food chain.” He also called for more collaboration between risk managers and insurers to help underwriters to understand the risks, especially in newer areas such as cyber: “The future landscape is uncertain but risk managers will see the risks quicker than we [insurers] do, so you must share what you see with us.” The results echo the findings of a survey of Airmic members in May this year, which revealed that over two-thirds of UK risk managers believe that risk management has become more important in their business over the past five years, with only 3% saying it has declined in importance. The Airmic survey did note, however, that breaking risk management out of its traditional silo remains one of the biggest challenges in elevating the role further: 42% of Airmic members believe that the risk culture is not embedded in their organisation, and 36% reported that risk management and risk education are not integrated into the wider business.
The conclusions of the ACE report also chime with Airmic’s technical guidance The Changing World of Risk, published in June this year. The paper was a call to arms for senior risk professionals to increase their strategic influence. It argued that a higher profile for risk management is changing the role of the future risk manager, and that risk professionals need to ensure that they have the right capabilities, skills and competencies.
Katie Moore, Airmic R&D manager and one of the authors of the report, said she was pleased to see evidence that risk management is being elevated across Europe as well as the UK. “We at Airmic have been saying for some time that this is an exciting time for the profession given the growing pressure on CEOs to understand risk in uncertain times, and it’s good to see this echoed across Europe. For any risk professionals wanting practical advice on how they can help their c-suite and raise their own profile within their company, I would strongly recommend reading our report.”
