The Advantages of Having a Risk Manager

Life is a series of calculated risks and nothing more! Unconsciously, we encounter many risks daily and are unaware of the ramifications of these risks. Today, Risk Management is prominent on the agenda of successful organizations and entities all over the world. 

All businesses and non-profit organizations face unexpected risk events, such as a natural disaster, loss of funds through theft, or injury to staff, customers, or visitors in your home/office premises which could impact operations. Any of these events can cost your organization money, give bad reputation or cause your organization to permanently close.

See Also: Is Getting Insurance a Waste of Money? (Hard Knocks and Bitter Truth On Need for Insurance Protection)

At this point, it is important to understand what risk management means. Risk Management, according to Charles Nyce (2007) involves the efforts of individuals or organization as to efficiently and effectively assess, control, and finance risk to minimise the adverse effects of losses or missed opportunities. He went further to note that individuals practise risk management to protect their limited assets from losses and to help them meet their personal goals; while organizations do so to add value and ensure that losses or missed opportunities do not prevent them from meeting its their corporate goals.

The uncertain economic times of the past few years have had a major effect on how companies operate these days. Recently, companies have a renewed focus to manage risk.

Functions of the risk manager

With a risk management plan, you can prepare for the unexpected, minimizing risks and extra costs before they happen. The Risk Manager may be in charge of all or part of Risk Management activities, which may include the following:
  • Help the company to define and develop corporate risk management philosophy, mission, framework, and processes in alignment with corporate vision and strategie
  • Oversees and support Risk Assessment (risk identification, analysis, evaluation) functions.
  • Ensure the implementation of Risk Controls (to an acceptable level, based on chosen risk criteria).
  • Prioritize the need to embrace risk culture across the organization.
  • Design and implement Risk financing in alignment with the risk management policy.
  • Support and guide management in the event of uninsured and uninsurable events happening.
  • Provide efficient and effective Claims processing system in the organization.
  • Facilitate the implementation of Business Continuity Management
  • Actively support Crisis Management intervention.
  • Effectively Monitor, Report and Communicate risk management process and procedures in the organization.
In summary, the risk manager presents to Top Management the organization’s risk profile and optimized reduction and finance solutions, within the limits of the risk appetite and risk tolerance as defined by the organization’s Board of Directors or Board of Governors.

Engr. Jacob Adeosun
Executive Director
Industrial Risks Protection Consultants
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