Risk Manager Job Description: Skills, Duties, Requirements and Career

A risk manager is a person responsible for analyzing, assessing and managing the risks faced by an enterprise.

The job of a risk manager is to identify, anticipate and prevent all of the critical financial, operational and safety risks that may potentially harm the enterprise and develop strategies, processes and systems for monitoring and managing those risks and ensuring business continuity.

But what does a Risk Manager do, exactly?

A risk manager’s first task is to carry out investigations and analyses and gather data in order to identify the internal and external risks to which the enterprise is exposed and on that basis define the enterprise’s operational and financial risk profile. As part of this process, the risk manager analyses the enterprise’s key risk indicators (KRI) and conducts ‘what-if analyses’ to determine what the consequences would be if the risks identified were to actually occur. Potential consequences may include a financial loss, a loss of earnings, a breach of confidential information or damage to the enterprise’s assets (e.g. products or infrastructure).

Based on the risk analysis, the risk manager performs an assessment of the company’s risk management policies and procedures to determine whether the company has adequate controls in place in all areas of its operations. If this ‘vulnerability assessment’ reveals critical areas or weaknesses, the risk manager may propose changes or improvements to the organization’s risk policy or enterprise risk management system.

Risk managers are also responsible for implementing control systems and strategic action plans designed to protect the company’s assets and resources by preventing risks from occurring, mitigating the potential damage or transferring the risk to other parties.

The measures identified by a risk manager will naturally vary from organization to organization. For example, they may include formulating business continuity plans to respond to potential disruptions, defining crisis management processes, introducing new operating protocols or regulations, updating procedures in line with the latest standards and best practices, or taking out insurance coverage.

Some risks, however, are inherent in a company’s operations - such as the risks associated with financial market transactions - and thus cannot be totally avoided. In these cases, risk managers are tasked with setting the level of risk that the company is prepared to accept (known as an organization’s risk appetite) and developing strategies to keep its risk exposure below a certain threshold. A key role in this process is played by documentation. In order to support their assessments of the risks to which the company is exposed and enable the creation of the reports they periodically submit to the organization’s management team, risk managers need data (e.g. statistics, business sector reports etc).

Risk managers use the information they gather to providing advice and recommendations to senior management on a range of risk management-related issues, for example proposing strengthening the IT infrastructure to enhance cyber security, automating a company’s internal processes or adapting the business model to respond to emerging risks.

Risk managers are also responsible for proactively monitoring and identifying developments of a financial, social or legislative nature that may impact on an organization’s operational and strategic risk profile.

In some cases, they may also have direct responsibility for the implementation of the risk management plans they propose and act in a quasi-project manager role, with a set budget and a delivery deadline. This typically involves working with managers and staff at all levels of the company to ensure that new procedures are followed and conducting training to educate personnel on the new risk policy and increase awareness of the risks associated with the organization’s activities.

Another key element of the risk management process is carrying out checks, stress tests and audits (as part of a cycle of continuous review and improvement) to verify that the procedures and controls in place are effective and compliant with all the relevant regulatory requirements.

Risk managers are employed by public organizations and private companies in a wide range of sectors and industries. However, the majority of vacancies for risk managers can be found in banks and financial services companies, insurance companies, construction and engineering firms, IT and telecommunications companies, auditing firms and consulting groups specializing in risk management, and in the healthcare sector.

The work of a risk manager is largely office-based, although sometimes business trips may be necessary in order to assess risks associated with specific operations or workplaces, present risk analyses and assessments to management or investors, or to provide clients with risk consultancy services.

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A risk manager’s primary tasks and responsibilities include:

• Analysing company risk profile
• Presenting risk assessment to senior management team and company directors
• Devising effective risk management strategies
• Monitoring key risk indicators
• Regularly reviewing internal risk policy and ensuring compliance with new legislation
• Actively contributing to implementation of risk management plan and involving all personnel in process
• Training personnel on risk management principles and raising awareness of risk within organization
• Designing monitoring systems to maintain level of risk below established threshold
• Writing periodic reports for management and providing advice and recommendations on risk management-related issues

To become a risk manager typically requires a degree in statistics, economics, business and finance, mathematics, IT or in another scientific field. In addition to knowledge in a range of cross-cutting areas, such as data analytics, corporate governance, risk management, internal audit, regulatory compliance, security, quality assurance, and an understanding of risk assessment models, the job also calls significant prior experience in a risk management role - for example in an insurance or financial setting or with an auditing or consulting firm.

For positions managing risks in very specific areas, such as IT or engineering, candidates may be required to have specialist qualifications and technical knowledge, including of the relevant regulatory framework and the national and international standards and best practices for risk management. Finally, candidates holding specific risk management qualifications are likely to be preferred.

The key skills and qualities required by a risk manager include:

• Knowledge of risk assessment models
• Knowledge of auditing and reporting procedures
• Knowledge of actuarial and statistical tools
• Ability to implement risk monitoring and testing procedures
• Ability to use office automation tools
• Excellent verbal and written communication skills
• Ability to build relationships with key stakeholders
• Analytical skills
• Attention to detail
• Organizational and time management skills
• Team player but ability to work independently
• Proactivity

A career as a risk manager typically begins with an entry-level position, such as junior controller or junior risk manager, in an industry such as finance or insurance. This represents a chance to gain valuable experience in a range of areas (e.g. auditing, financial analysis, compliance management and risk management) and may, eventually, offer the opportunity to progress up the ranks to more senior positions, such as risk manager, senior risk manager and chief risk officer.

An alternative career path is to become a self-employed consultant (working either independently or in collaboration with partners), providing organizations and businesses of various kinds with risk management services.

A further possibility is to specialize in managing a specific type of risk. In the banking, insurance and financial services industries, for example, credit risk analysts and credit risk managers - professionals who specialize in managing and assessing various types of business risk such as credit risk, liquidity risk, financial risk and market risk - are in high demand.

Another highly sought-after professional group are IT risk managers, who are responsible for a range of different processes, including information risk management, IT infrastructure protection, data privacy, IT compliance, information system governance and business continuity management.

Finally, there are a large number of other specialist areas offering interesting career development opportunities for risk managers, including enterprise risk management, operational risk management, technology risk management, security risk management and commodity risk management.

Why should you consider working as a risk manager?

The role of a risk manager is an important one, involving direct responsibility for identifying, assessing, monitoring and managing the risks faced by an organization. Risk managers work together with all areas of a company to ensure a coherent, integrated approach to risk governance and to raise employee awareness of risk-related issues. The role is suited to individuals with strong decision-making and problem-solving skills, who are capable of building positive working relationships at all levels.

The job comes with a significant degree of responsibility and the competitive salary packages offered reflect that. There is now widespread recognition of the strategic importance of risk management and, as a result, companies are increasingly on the lookout for qualified risk advisory specialists capable of ensuring business continuity and helping them respond to a rising number of potential threats, including globalization, the digitalization of business processes and the need to meet regulatory compliance obligations.

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