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25 Aug 2020
In the constantly shifting world of corporate risk management, how can companies prepare for the next ten years?
In the last decade, the role of corporate risk directors, who traditionally procure company insurance, has changed beyond recognition.
While companies still require insurance, which risk directors secure, risk identification has become a much broader exercise. Looking forward to 2030, businesses can expect greater shifts still, with new responsibilities and considerations landing in risk directors’ in-trays.
Take reputational risk. In the 2010s, the rise of social media and access to information exposed companies to new levels of reputational risk, requiring updated strategies and products, and interactions with marketing and public relations to work out ways of safeguarding a company’s reputation in an increasingly digital age.
Fulfilling the job specification of a risk director today is no mean feat. Required skills continue to grow in line with the corporate-risk landscape – data analytics, interpersonal and communication skills, coding and a strategic mindset to name a few. What’s more, the nature of risk mitigation involves tackling new, unfamiliar risks to a business in a calculated way, balancing the outcome of previous incidents with the variables of a new situation. Along with everything else, risk professionals of the 2020s need to be adaptable.
The risk-management sector is experiencing a shortage of talent. According to a survey from the Risk Management Society (RIMS), 94% of respondents believe risk management-professionals will need to develop new skills to meet future challenges yet just 32% believe they are prepared to make the changes needed. What’s more, only 16% of respondents think there will be enough graduates to fill open positions in risk management by 2025.
The pace of change the industry is facing means that, even with talented new graduates joining the workforce, their education will need updating. The RIMS research shows a strong feeling that the curriculum just can not keep up with the complexity of the workplace risks emerging in today’s world. Some 92% of executive leaders in risk management believe colleges and universities need to substantially alter their curriculum to meet future risk-management needs.
Businesses should look to prioritise diversity in the workforce, recruiting employees with a broad range of professional experiences and backgrounds to find solutions in a new era of risk. The RIMS survey found that 88% of respondents felt a diverse risk-management workforce is necessary for the future, with 95% of millennial respondents agreeing.
Risk managers need to get comfortable with change. Sticking to the status quo will not mitigate ever-evolving business risks, and it’s necessary for directors to tune into socio-economic developments that may expose their clients or employers, exploring new strategies that protect and support businesses.
As new risks emerge, so do increasingly innovative solutions, such as the ubiquity of flexible office space around the globe today Business continuity solutions that provide companies with nearby back-up office space at the drop of a hat when disaster strikes are another solution that risk directors have in their arsenal when formulating a bullet-proof risk-management plan. Future risk directors will need to remain open to new solutions and strategies, and embrace the innovation that the 2020s will bring.
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