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Risk managers, superiors see things differently.

By and large, risk managers like their jobs and even see risk management as a promising field for their future. However, many of their superiors do not share the same view of risk management's role in the organization. This was among the findings of a survey conducted during the Risk Management Excellence session at the recent Western Regional RIMS Conference in Keystone, Colorado, sponsored by the Rocky Mountain Chapter of RIMS.

Sixty-five risk managers, all deputy members from 20 RIMS chapters, were asked to comment on their individual jobs and the general practice of risk management. The survey was conducted through questionnaires distributed during a panel discussion featuring Tom Irvin, vice president of marketing at CIGNA Special Risk Facilities in New York; Bill Perry, president of the New York-based executive recruiting firm Logic Associates; and Steve Wilder, director of corporate risk management at The Walt Disney Co. in Burbank, California. The panel members addressed topics relating to risk management, and session attendees were asked to indicate their views on the questionnaires.

Eighty-six percent of the risk managers said risk management was a promising field for their futures, and 72 percent enjoyed the diversity of their involvement with their employers' businesses. However, 74 percent thought their superiors expressed little interest in risk management, while 71 percent believed they had no common ground with their superiors on what risk management is all about.

The latter results dismays Mr. Wilder. "It is my responsibility that my boss has the same view as mine," he says. "If he doesn't, then it's my problem. If the boss is not interested, how can it be a promising career?"

In the past, many risk managers shared their bosses' view that risk management was not a career path or a profession. Yet Mr. Irvin believes the 86 percent approval rating for risk management's future career promise is significant, particularly in light of recent layoffs of risk managers due to the depressed economy. He also points to a change in the way risk managers view their profession. He notes that in previous conversations with risk managers around the country, "a very large number, if not the majority of risk managers, did not think of themselves as a professional. They thought of themselves in terms of exhibiting the characteristics of professionals, but they didn't think they were regarded by other professionals as a profession," he says. "Sometimes I've made statements that risk management is a profession, and I've heard snickers from audiences of risk managers. I think this particular survey caught risk managers in the right frame of mind, when they were not only willing to think of themselves as professionals but were also enthusiastic about it."


As for corporate advancement, 22 percent of those surveyed saw themselves as moving into financial management positions with their current employers, and 38 percent said their risk management experience provided them with a background which may propel them into a general management position; 37 percent are uncertain where their promotions would lead and 3 percent anticipated promotions to a human resources position. The last two responses surprises Mr. Perry, who believes risk managers might need a more precise outlook for their careers. As for going into human resources, Mr. Perry says 3 percent is 3 percent too many because human resources represents a separate and distinct career path" from risk management.

But if the risk managers became so disgruntled that they changed positions, 68 percent said they would seek work other than in risk management, with 9 percent considering consulting, 9 percent broking, 8 percent finance and 6 percent human resources.

One RIMS member suggests that risk managers need to employ a greater degree of self-promotion. "We limit ourselves because we have not done a good job in explaining what our capabilities are," says Gwen Thayer, risk manager at Forest Oil Corp. in Denver. "Many risk managers think that senior management does not understand what risk management is. As a result, we [risk managers] need to do a lot to improve our image."

Mr. Irvin adds that RIMS is now trying to improve treasurers' understanding of risk management.

Mostly, the risk managers strongly agreed on some of the key elements that help create a quality risk management program. Ninety-eight percent contended that a risk manager who places loss control as one of the most important goals of a company is well on the way to having a quality risk management program; the same percentage surveyed thought risk managers should require quality service from their providers, such as policies issued correctly and on-time. The idea of a risk management audit that could attest to the quality of their program pleased 88 percent. Eighty-five percent believed in cost-of-risk analysis, and 80 percent thought that property meeting highly protected risk standards is a sign of a quality program.

"It is not enough that risk managers have specialized knowledge," Mr. Irvin comments. "They also need a network of key contacts." His opinion was shared by 95 percent of the risk managers, who thought that interaction with other risk managers in their industry would help their job performance and personal development. Eighty-five percent cited long-term relationships as vitally important, and 95 percent thought they should develop business relationships so they could use them throughout their careers. Furthermore, 97 percent thought that over time, most new business relationships could be improved significantly.

Continuing Education

Risk managers thought that continuing education was helpful to their professional status, with 80 percent claiming that an MBA is increasingly important in today's job market; the ARM designation was viewed by 54 percent as more highly regarded than a CPCU, which received 42 percent. Yet 55 percent of those surveyed had neither an ARM, a CPCU or an MBA.

The importance of an MBA, especially a degree in finance, cannot be overstressed, according to Mr. Perry. However, he is not surprised that only 6 percent of those surveyed were currently pursuing this degree because, he says, it involves more money and time to achieve than an ARM or CPCU.

The ARM designation may not have received more support because of semantics, according to Ms. Thayer. She believes that many people outside the risk management sphere are confused with the "associate" part of the title. "The courses necessary to reach the ARM are graduate level courses, not undergraduate courses," she says. "Ours is not an associate degree; it's an 'associate in' degree. To the outsider it's very misleading."

Almost all risk managers thought that brokers should be skilled negotiators (98 percent), and that they must understand the risk manager's business (94 percent). Sixty-eight percent said one broker working on their account was better than two; the same percentage considered their broker to be an integral part of their risk management department.

Sixty-two percent believed that "the best program" could be achieved by periodically inviting bids from various brokers. Mr. Wilder finds this point interesting because it contradicts previous surveys that show risk managers do not bid out their insurance programs.

In other issues, 85 percent believed that employee benefits management is a function of risk management, and 97 percent saw new opportunities with the growing focus on environmental issues. The greatest dissatisfaction for risk managers results from office politics (35 percent) and too much paperwork (20 percent).

Views on RIMS

Finally, the risk managers inquired about the way RIMS conducts itself. Fifty-four percent did not think RIMS was organized correctly to promote the interests of 1990s risk managers. Most risk managers surveyed were willing to welcome individual membership categories for risk managers whose employers don't join RIMS (86 percent), former deputy members (66 percent), ARMS (71 percent) and risk management consultants (63 percent), but did not think that RIMS should create individual membership categories for safety engineers and CPCUs.

The notion to expand RIMS membership to new categories is supported by Sam Fisher, risk manager with Denver's Hamilton Oil Corp. "If you look at the CPAs and the majority of other professional organizations," he says, "most memberships are individual memberships. RIMS may be one of the few that is a corporate membership. RIMS has to open up or restructure to avail itself of individual membership." He adds that expanding membership categories will bring an influx of professionals that would further solidify the concept of risk management as a profession.

"It would be interesting to hear the thoughts of other members of the risk management community on these issues," Mr. Fisher said.
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Author:Hall, Phil
Publication:Risk Management
Date:Dec 1, 1991
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