Risk managers who want to reach the top of their game need to show what they’re made of
With the right skills, risk managers can take advantage of the current heightened emphasis on risk management and corporate governance to propel themselves forward. During a new age of austerity there is also an opportunity, given the focus on risk and governance, if risk managers are willing to step up and take it. But what are the essential ingredients of risk management career success?
Risk managers who want to excel will need to do a number of things well. They may need to improve their business knowledge and commercial acumen, communicate better with the board, as well as overcome some tricky political problems that they will inevitably face, acting as they do as the conscience of the business.
Improve business knowledge and commercial acumen
The most important thing for risk managers is to be seen as business-enabling, not as an obstacle to doing business. Judging by the experience of some in the financial sector of late, it is easy for troublemaking risk managers to be brushed aside.
In order to be seen as business-enabling, risk managers need to talk the same language as the business, which could mean doing some financial training. They must also integrate themselves into the business rather than being tacked onto projects at the last minute.
If risk managers want to become more involved, they need to put forward solutions not just problems. In their presentations to the board, it is no good simply bringing risks to the board’s attention and abdicating responsibility for managing them. A good approach is to present the risks while at the same time offering guidance on how to deal with those issues, either in the form of recommendations or – better still – innovative solutions.
Communicate effectively with the board
Communicating with the board needs to be done quickly and succinctly. It is no good getting bogged down in the intricacies of an insurance contract. The board’s time is precious, so if risk managers have the opportunity to speak to them, it is imperative that they use that time wisely. It may be that a risk manager is called on to deliver a report to the board during a crisis. Moments like these can be career defining. The risk managers who succeed will be the ones able to demonstrate the skills they have and the value that they bring to the role.
Tackle complex political issues
Clearly, it is important not to be too adversarial. However, a time will arise for most risk managers where they have an opinion that is directly at odds with other parts of the business. An example is a business unit that is looking to steam ahead with a new product line, but the risk manager is much more cautious because of huge risks associated with the undertaking. Risk managers faced with similar circumstances should not feel alone. Sometimes they may feel compelled to bypass executive management and go directly to the non-executives with their concerns. This is a huge problem, but it is one that can be overcome.
The advice is to be measured. Try not to compete with the business development department. Rather, present a balanced case with the right level of research and analysis, using data to support the argument. Make sure that senior management are aware of the potential risks as well as the rewards. It may be that, in the end, the risk manager is still over-ruled, but it is better that they have put their view across and it has been documented. Whether or not the business is willing to listen to the voice of caution depends on the culture and the tone from the top.
- Risk managers should be business-enabling not an obstacle to bypass
- They need to integrate themselves into the business and speak the same language as senior managers
- Presentations to the board should be succinct and include solutions, not just problems
- Conflicts will arise, but these can be managed by treating the business with respect