Risk Manager Is Suddenly a Hot Job
Risk Manager Is Suddenly a Hot Job
(Bloomberg Businessweek) -- Twenty years ago, corporate risk managers had near-zero public visibility. Most were back-office staffers who focused on securing insurance for environmental and real estate problems (tornadoes, fires, earthquakes, facilities breaches). Young people didn’t aspire to be risk managers: There were just a dozen small academic programs in the U.S. focused on the career. The pandemic has catapulted the field into prominence almost overnight. “Risk management now has boards’ attention and has been given a seat at the table for input and consideration,” says Al Marcella, president of Business Automation Consultants LLC, a St. Louis-based security assessment firm. Boards are quickly creating risk committees focused on crisis planning and remote work data privacy—and they want a chief risk officer on speed dial.
The role is complex and demands a wide range of skills. Chief risk officers need the analytical might to evaluate everything from supply chains to staffing; the ability to maintain many relationships (to law firms, insurance brokers, industry peers); the power of persuasion to sway fellow executives; the communication savvy to handle employees and media in a crisis; and financial literacy to understand not only a company’s balance sheet but also how much money would be lost if, say, the parts factory in Turkey closed for a week. All this while answering to the government regulators and investors who risk managers say are inquiring about preparations for global catastrophes. The job is about managing “wars you didn’t start, which will require immense resources to win, with domino-like consequences that contain a whole list of potential subcrises,” says Jonathan Bernstein, who runs a crisis management firm.
While the global spread of the new coronavirus has thrust risk management into the spotlight, the field has been steadily expanding for years, spurred by a succession of national tragedies, starting with 9/11. K. Campbell, who began a Pentagon job on Sept. 4, 2001—a week before the terrorist attacks on the U.S.—watched as a newfound appreciation for crisis and business continuity planning emerged overnight within the private sector and government. “There was more visibility for these planners both inside and outside the government,” says Campbell, now a principal at Blue Glacier Security & Intelligence LLC, a security consulting company based in Washington, D.C.
Fortune 1000 companies began to employ a risk manager, and perhaps a staffer or two, usually seated among lawyers in the depths of the legal department and reporting to the chief legal officer or perhaps camped out in the finance department reporting to the treasurer or chief financial officer. Their job was to collect extensive information from across the organization for insurance and risk analysis. Ambitious risk managers diplomatically communicated vulnerabilities to their bosses, who often ignored the issues.
The 2008 housing market crash focused the profession more on enterprise risk management, and recent cybersecurity breaches extended risk managers’ oversight into new areas including hacking and privacy, but the career path remained stunted. A career risk manager could aspire to the rank of vice president or, if lucky, maybe senior vice president. Apart from those in finance and insurance, “very few companies had chief risk officers,” says Nancy Green, executive vice president at insurer Aon Plc. “Too many organizations viewed it as an insurance-buying position.”
Only 80 university programs exist in the U.S., compared with more than 5,000 accounting programs. As recently as two months ago, business degree programs didn’t include mandatory risk management coursework. With the pandemic rattling boardrooms and head offices globally, that’s about to change. “I think some schools will make risk management part of the business curriculum, and make it mandatory,” says Brion Callori, a senior vice president at insurer FM Global and former chairman of the Spencer Educational Foundation, which funds risk management and insurance education. “Millions of jobs over the next 10 years are going to be open.”
Graduate and certificate programs are already seeing a shift under way. The one-year graduate program in emergency management and continuity planning at the University of Illinois at Chicago enrolls 10 students annually; this month, a recruitment webinar attracted 28, the largest crowd ever, and the program is expanding to meet demand. Zach Finn, who directs the risk management and insurance program at Butler University in Indianapolis, says his program has also seen a surge in interest. He’s thrilled to see his profession emerge from the sidelines. “We’ll finally be respected for holding the world together,” he says.
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