What makes a good risk manager? Such a loaded question that has numerous answers to it. The question was poised to the Risk Managers LinkedIn group on last week. The group is for Risk Managers to network and communicate, benefiting from each others knowledge and experience.
Several answers to the question came pouring in from group members, including:
- Knowledge of macroeconomics and microeconomics,coupled with taste and smell for analysis.-we have to know,how much,to whom and for what.
- These days a good risk manager has a good understanding on strategy and the alignment of risk management with strategy management. Risk and strategy are no longer separable. I for one believe that the risk function should be integrated into an office of strategy management, although others strongly disagree.
- A good risk Manager is one who can listen beyond what is spoken and who can see beyond what is visible AND who equips himself to face and manage the risk(s). He should make others relevant for the purpose to be aware of all facets of risks.
- In addition, they need to understand the industry they are in, and how the company they belong to or are assessing fits into that industry. They need to understand the risk appetite of the company and of the immediate management they are providing their assessment to. They need to be confident in their assessment and their ability to convey it successfully so that it can be used to effectively influence business decisions.
- From my experience, it has been the mix of engaging risk owners to “work” their risks, ensuring senior management is setting to tone for solid risk management to be performed in all team meetings and the combination of:
1. Ability to identify risks,
2. Ability to mitigate risk potentials,
3. Ability to score risk severity and occurrence parameters, and
4. Ability to respond to an issue’s impact.
- A good risk manager needs the “right tools” to ensure all appropriate people have access to the knowledge they need (the “right information”) and the “right tools” to measure awareness and accountability at the individual level and the “right tools” to equip people to report risks, red flags, threats, etc. and the “right tools” to get this information to the “right people” so they can “do the right things”.
- Everything is a cycle, Understanding that all markets share the same rule and are governed by it. Keeping things simple.
- A good risk manager is one who have a good understanding of risks from the beginning to the end of projects, monitor and control risks at a level which can be accepted by stakeholder
All are great answers and speak to every specific responsibility a risk manager does take on. JDi Data agrees and adds in that a good risk manager also focuses on having the best tools that provides them with insightful information to prevent future incidents, speedily processes information over to the correct people with proper documentation, and streamlines the internal business process.
What characteristics would you include in the growling list of what makes a good risk manager?