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What does a Risk Manager do?

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  • Written By: Ryan Russell
  • Edited By: A. Joseph
  • Last Modified Date: 06 November 2016
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A risk manager is responsible for managing threats posed to the progress of a business or organization. Specifically, his or her job description calls for protection of company assets, income, employees, reputation and shareholders. The area of expertise required of people in this position often varies depending on the industry. Some companies need risk managers to establish regulatory procedures and manage legal risk, and other companies might need one who specializes in technology and data risk.

Risk managers are responsible for creating risk management protocol that governs how to conduct business while limiting risk. They study the risk and reward of each major organizational undertaking. It is his or her role to identify trouble before it occurs and to relay this information to others within the organization.

The risk assessment data that risk managers gather is reported to individuals working in various facets of an organization. They structure these reports differently depending on the audience. The board of directors might receive general risk assessment data that will ensure that the board members understand the most pressing organizational threats. Company managers receive risk assessment data relevant to the department that they manage. Employees might receive risk assessment data so that they can understand and acknowledge potential safety risks posed by their jobs.

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Risk managers are able to shield organizations from serious legal costs through the proper review of company procedures. They make sure that compliance and risk agreements are maintained in every part of the organization. They often conduct their own audits of company policy and regulatory practices to ensure that the enterprise is legally secure. Risk managers are often required to provide training to company managers on how to stay within proper legal boundaries when running their departments.

Larger organizations typically hold insurance policies to protect them from the costs of legal liability. Risk managers are responsible for managing various company insurance policies to ensure that the organization is properly protected with the right amount of insurance. If problems arise, he or she will file claims with the insurance companies.

Risk manager jobs require a certain level of experience and education. Individuals who hold these positions typically have previous experience dealing with liability in the insurance or legal fields. Most risk management jobs require someone with at least a bachelor’s degree. Many risk management positions require at least a Master of Business Administration degree.

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sunnySkys
Post 4

I'm not surprised a risk manager might need to have experience in the legal field as well as risk management training. After all, part of their job is to limit their company's legal liabilities, so you would probably have to have some experience with the law to do that.

And of course, I can see why a background in insurance would help too. Then you would understand the concepts behind insurance and have enough knowledge to help your company get the best insurance policy for their needs. I'm sure there are a lot of things you could learn from being in the insurance business the average person will never know.

ceilingcat
Post 3

@indemnifyme - Interesting. I know you can get a lot of different discounts for homeowners and car insurance, but I never stopped to think about why the insurance company would do that. I guess it's all about risk management!

Anyway, I think being in business or financial risk management must be pretty stressful. Imagine the consequences if you messed up? If you failed to protect your company from risk, you company could lose a lot of money or business or maybe even go under! I don't think I would want all that responsibility on my shoulders.

indemnifyme
Post 2

I used to work in insurance, but I mostly sold homeowners and car insurance, not business insurance. However, risk management is a well known concept in insurance, and for a lot of policies if you're doing something to manage your risk, you can get a discount.

For example, if you have a home security system, you can often get a discount on your homeowners policy. From the perspective of the insurance company, this makes you less risky to insure, because there's less risk of your house getting broken into.

I'm wondering if you can get the same kind of discounts for business risk management? I guess a good risk manager would probably know the answer to that question!

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