Risk managers have more strategic influence than ever, report shows

Demands facing boards have never been tougher, a pressure that in turn is opening up opportunities for the risk profession. Risk and insurance association Airmic says it is time for risk managers to rise to the challenge.

To help them do just that, the association has unveiled a ‘roadmap to success’ in the form of its paper, The Changing World of Risk, which argues that “there is a clear and developing need for in-house risk management expertise” to help C-suites fulfil their obligations and align their approach to risk with their overall strategy. It urges risk managers to become a vital part of decision-making and to “become executive partners, or risk counsel to the board”.

According to the report, the barriers to becoming a resilient organisation in today’s environment are higher than ever before given the pace of globalisation, digitalisation and technological change. Boards are therefore facing increased complexity, often beyond their experience. Meanwhile, changes to the UK corporate governance code mean their accountability for risk management has never been more explicit.

The paper builds on Airmic’s highly acclaimed Roads to Resilience research published last year, which argued that resilience is a key indicator of success. Analysis of a series of case studies revealed that successful companies are underpinned by five common principles: an effective risk radar, diversified resources and assets, rapid response capability, effective relationships, and the ability to review and adapt.

Using checklists and a scoring system based around these five principles, today’s paper sets out a step-by-step process to measure a company’s level of resilience, ranging from “needs urgent attention” to “high level of resilience”. It also provides a road map to success for each principle, including 10 practical tips for each area.

John Hurrell, Airmic chief executive, commented: “Since we published Roads to Resilience last year, the business environment and risk management world have continued to change: its lessons are even more relevant today. This report puts the lessons of that research into today’s business context and provides practical advice for the risk community on how to achieve resilience – and therefore success – in an extremely challenging environment.”

The paper is also a call to arms for senior risk professionals to increase their strategic influence. It states that a higher profile for risk management is changing the role of the future risk manager, and that risk managers need to ensure that they have the right capabilities, skills and competencies.

“Not all risk professionals will want to take their careers in that direction,” Hurrell notes. “But for those that do, the opportunities are huge. In particular we would stress that today’s risk managers must develop their business skills alongside their technical capability. This won’t be easy but is key to holding influence.”

    Share Story:

YOU MIGHT ALSO LIKE


COMMUNICATING IN A CRISIS
Deborah Ritchie speaks to Chief Inspector Tracy Mortimer of the Specialist Operations Planning Unit in Greater Manchester Police's Civil Contingencies and Resilience Unit; Inspector Darren Spurgeon, AtHoc lead at Greater Manchester Police; and Chris Ullah, Solutions Expert at BlackBerry AtHoc, and himself a former Police Superintendent. For more information click here

Modelling and measuring transition and physical risks
CIR's editor, Deborah Ritchie speaks with Giorgio Baldasarri, global head of the Analytical Innovation & Development Group at S&P Global Market Intelligence; and James McMahon, CEO of The Climate Service, a S&P Global company. April 2023