Risk Manager/ Director
Risk Manager / Director
Risk assessment and management is essential to modern business. From board level down, it is necessary to calculate what risks are able to harm an organisation and how best to mitigate or eradicate those harmful factors in order to maximise profitability and ensure the company remains competitive.
Risk Managers / Directors are tasked with predicting change, forecasting cost to the organisation and predicting future trends.
Large companies identify 4 main types of risk that pose a danger to their continued profitability. Credit Risk, Operational Risk, Market Risk and Regulatory Risk.
Credit Risk can be classified as the risk to the company of its customers or clients not paying for services / goods or defaulting on loans.
Operational risk can be defined as the risk of loss due to system breakdowns, employee fraud or misconduct, errors in models or natural or man-made catastrophes – it is basically the risk of the way you run your business leading to financial losses.
Market Risk is the risk that adverse factors may affect the company’s share price or in fact the whole market segment – what external could cause the company to be devalued?
Regulatory Risk is the risk associated to the laws that govern a particular industry sector. For example if a financial services company does not comply with the laws introduced by the industry watchdog they cannot continue trading – what legislation is likely to impinge on the company’s activities and what risk will new laws pose to the organisation.
Risk Managers will generally lead teams of analysts or policy writers. Risk directors will sit at board level and will have the heads of the various risk departments reporting into them. Both these roles can be seen as checks and balances to the commercial side of an organisation. They are there to ensure that growth is achieved in a controlled, responsible and sustainable way. Risk management is a growing sector and is placed in increasing importance by firms, who recognise that it is a key engine for profit growth.
Skills / Qualifications
Completion of a degree is usually essential, and an analytical nature is required. Candidates must also be able to challenge people and present sometimes complex and technical information in a straightforward and commercial fashion.
To get to a risk manager or director role candidates must have a demonstrable track record in the area of risk the wish to manage. It is a specialised area and experience is essential.
With Risk management becoming increasingly important, candidates can expect to progress to board level roles and executive positions within the bigger firms.