In this edition’s guest article, RIMS Chief Executive Officer Mary Roth discusses the unique role risk professionals play in their organizations and the importance of strong collaboration with their broking partner.
The risk management professional of today and tomorrow is uniquely positioned to provide even greater value to their organizations. Their knowledge, skills and relationships with different areas of the business, such as human resources, information technology, legal and others, allow for a comprehensive understanding of key business initiatives, strategies and challenges.
Risk professionals have become a proactive force and are answering questions like “what can our organization do to ensure its insurance coverage does not have to be activated” and “how can the identification, assessment and modification of risk enable our organization to move forward with new initiatives?” Risk management has become a solution-providing consultative practice, and a key to making informed, strategic decisions.
Risk has a negative connotation but should it? Risk is an uncertain future outcome that can either improve or worsen an organization’s position. No business would succeed without embracing and understanding risk. Risk professionals are the vehicle to drive that culture-shaping message across the organization.
Additionally, before others in the organization are able to embrace a risk-aware culture, they must understand the organization's position on risk taking. What is the organizations appetite for risk? How averse is it to risk? Risk management can serve to educate others on this position, providing a basis for making strategic decisions moving forward.
Enterprise risk management (ERM) and strategic risk management (SRM) practices continue to mature.
With ERM and/or SRM in place, an immense amount of organizational knowledge will rest in risk management’s hands. Tapping into that institutional knowledge can be a tremendous asset that directly contributes to an organization’s sustainability and growth.
With a proactive and strategic approach to risk management, working with business leaders to cultivate and analyze critical data is crucial to the organization’s future. Partnerships with finance, accounting and treasury will highlight past expenditures, losses and, possibly, areas that need new controls. Partnerships with other business areas can uncover compliance issues, safety and health concerns, system vulnerabilities, as well as opportunities for cross-department collaboration that can lead to enhanced processes and new revenue streams.
More than just sharing information, these relationships are pivotal to engaging individuals within the organization, promoting the value of risk management to their work and capitalizing on individuals’ skillsets to advance the organization.
While partnerships with internal business leaders are vital, partnerships with external parties can be equally as important.
The risk professional, broker relationship is a great example. While it is critical for risk managers to provide their brokering partners with details about their business, context around that data will add real value. By building long-term relationships of trust, risk professionals and brokers are not only able to collaborate on stronger risk financing and modification programs but can also help identify new services, products, partners and technologies that improve the organization’s ability to achieve its goals.
Turning risk into reward is every organizations’ goal. With risk management leading the way the organization is better equipped to more accurately define uncertainties, cultivate and apply institutional knowledge, foster enterprise-wide collaboration, develop long and meaningful relationships with external sources that, ultimately, help the organization achieve or exceed their strategic objectives.
Mary Roth, RIMS Chief Executive Officer.