Career Definition of a Director of Risk Management
A director of risk management can work in a number of different industries, so the specific training they need and duties they perform may vary slightly from role to role. One of their main functions is to create an environment of risk awareness and promote risk reduction for their company. In order to do this they need a clear understanding of the things that expose them to potential risks, such as insurance claims or lawsuits. They need to be familiar with the regulations that apply to their industry to ensure that measures are put in place to reduce the possibility of adverse financial implications for their company.
Part of their role involves evaluating potential risks and exposures for the company. They then determine how to effectively minimize those risks and develop procedures that can be implemented. They also determine how to monitor workplace activities to ensure that risk management protocols are being followed. They may oversee staff if they work for a large company. Their duties may also include assessing insurance policies to determine which policies suit their company's needs. Their role may involve meeting with other directors, managers and lawyers, and the director of risk management will be involved with monitoring internal investigations of incidents that have exposed the company to potential risks. They may also be involved with vetting company contracts to identify potential risk issues.
|Educational Requirements||Bachelor's degree|
|Job Skills||Teamwork skills, communication skills, analytical skills, budgeting skills, mathematical skills, attention to detail, decision-making skills, problem-solving skills|
|Median Salary (2021)*||$146,631|
|Job Outlook (2020-2030)**||17% (financial managers)|
Sources: *Salary.com; **U.S. Bureau of Labor Statistics
A bachelor's degree is the minimum education level typically required to become a director of risk management. Employers look for individuals who have a degree in disciplines such as business or finance; they will also consider those who have studied law or logistics. Practical work experience is also required, so those considering this career should expect to start out in other risk management roles to qualify to become a director of risk management. Some employers prefer applicants with a master's degree. To qualify as a director of risk management it may also be necessary to have and Associate in Risk Management (ARM) certificate or Chartered Financial Analyst (CFA) certification.
To be an effective director of risk management it is essential to have strong analytical skills because the director of risk management must review a lot of information to identify potential risks. They need problem-solving skills in order to create strategies that will minimize risks for their company. They also need to be capable of communicating effectively since their role may involve supervision of other staff and since they regularly meet with other executives in their company. They also need to be able to effectively implement policies so it is important that they are capable of communicating those policies clearly to staff.
Career Outlook and Salary
The U.S. Bureau of Labor Statistics (BLS) does not distinguish between directors of risk management and other types of managers who deal with specific financial issues for their company. They provide data for these professionals as part of their listing for financial managers. A 17% job growth rate is expected for financial managers from 2020 to 2030, according to the BLS. As of 2021, Salary.com reported that the annual median income for a director of risk management was $146,631.
There are a number of different roles in risk management that those aspiring to be a director of risk management may gain experience from before assuming a director's role. Use the links here to learn more about other risk management careers and other financial management occupations.