The benefits of choosing a career in risk management
What is risk management:
Risk management is the process of identification, assessment and treatment of risks
that seeks to minimise, control and monitor the impact of risk occurrence through
the cost effective utilisation of resources.
Where does risk management apply
Risks occur in every walk of life, in every industry and in every service delivery
enterprise, both private and public sectors. The severity of risks occurring depends
upon many factors. In order to quantify such severities most organisations
traditionally employ some sort of risk processes to assess the likelihood of risks
occurring and their perceived or calculated impact. This enables risks to be
prioritised and resources applied to meet the overall best interests of the
organisation and its internal and external stakeholders.
Risks, great and small
In today’s connected and integrated world risks and their impacts can and do
translate across international boundaries. No longer are they confined to
departments and within individual companies. Economic boundaries and
geographical structures are such that companies now need to assess risks in a world
where a volcano in Iceland can cause the closure of a manufacturing plant in Japan.
Equally at the individual organisation level the importance of undertaking health and
safety risk assessments in order to protect the health, safety and welfare of it’s
employees is a legal obligation for many companies. Product manufactures will
undertake design risk assessments in order to ensure that the ultimate users are
protected from any safety related design hazard.
Local authorities are required to ensure that they provide safe highways and passage
for the general public. For example, they will need to assess the amount of sand and
grit they will need to ensure they can cope with the pressures of harsh winter
weather to protect the individual motorists and the unsuspecting pensioner on an
All of the above and in many more private and public sector industries and services
there is the basic requirement for someone or some persons to identify a potential
risk, to evaluate the likelihood of the risk occurring and to calculate the impact or
consequence of the risk in order to best minimise its impact.
Risk management – does it work?
Armed with the knowledge that risk is everywhere but that there are robust systems
and processes to manage them is it safe to say that such systems and processes
Certainly there are many examples of where risk management has worked. If the
available systems and processes didn’t work then they simply wouldn’t be used. Risk
departments and risk mangers would be unlikely to exist and an irresponsible
attitude to risk would likely be prevalent.
Risk management however does not work in all cases. It’s impossible not to be
tempted to assert that the BP oil well catastrophe in the Gulf of Mexico could have
been prevented if the risks had been fully evaluated. Similarly the lack of controls to
adherence of risk processes that has resulted in global financial problems has been
laid at the doors of some of the worlds largest financial institution and banks.
Another dimension to risk management
With the proliferation of risk management tools, the use of highly complex modelling
techniques and experts and specialists in their fields of expertise, why is it that risks
of the magnitude and scale noted above, to the trip hazard on the local pavement, to
the vulnerability of the child in a local authorities occur?
It is simply that risk management is not just about rules and regulations. Successful
risk management needs a culture and a set of values that ensures that it becomes
part of an organisations DNA. If corporate culture is perceived as resentful towards
those who raise risks then any risk process is useless. People will hope that the
problems just go away. The culture must allow for honesty and openness that allows
for maximum benfits to arise from the tools and modelling techniques.
Why choose a career in risk management?
Risk managers and people whose job it is to minimise the occurrence of risks are
experts in their field. Their value contribution to any organisation is immense.
Qualifications in risk management for some specialised industries – for example
insurance – is sometimes necessary and will certainly add to an individuals self
marketing capability. However a large number of active risk management individuals
do not consciously set out on a career path of risk management. They some how
stumble in to it. At this point there is a choice. Do you stick with the tools and
techniques or do you grasp the risk agenda and take it forward? The emergence of
enterprise risk management aligned to systems thinking; the inescapable link
between successful risk intelligent organisations and culture; the in depth knowledge
of an organisation and its independencies are immeasurable assets in a world where
some have developed a low tolerance to risk. A career in risk management can be as
dull as it can be exciting. The choice is yours.
But remember, risk is about taking the opportunity to grow, expand and compete
more effectively. Without risk, there is no reward – for the organisation or for the