MBA Can Open Doors For Risk Managers

Risk managers, as prototypical knowledge workers, need to keepupgrading their education and skills to prosper in an increasinglycompetitive job market, the profession's top placement specialistcontends.

The job is getting a lot more complicated, with many riskmanagers having to cope with Sarbanes-Oxley compliance demands andnew broker disclosure requirements.

“That means risk managers need to get up to speed and make suretheir skill sets are state of the art,” said Bill Perry, presidentof Logic Associates, the veteran risk management placement expertheadquartered in New York.

Logic's “2004 Risk Management Compensation Survey,” co-sponsoredby National Underwriter, found that among the risk managerssurveyed, very few have law degrees, despite the fact thatinsurance policies are contracts and claims often involvelitigation.

However, Mr. Perry said this is not a surprise, given theevolution of the profession into high finance.

“Many years ago, risk managers were usually insurance buyers andclaims processors, so it was more of a lawyer's function. Somereported to the general counsel at their firms rather than theCFO,” he recalled.

“But with the growth of the profession over the years, now it'sclearly a treasury and finance position,” he added. “You'd ratherhave a risk manager with an MBA in finance than one with a lawdegree. You hire lawyers to handle litigation–you don't need alawyer as your risk manager.”

However, the survey found that while virtually all risk managershave at least a BA degree, not all have earned an MBA. In fact,even at the largest firms, no more than two-thirds possess anadvanced degree, while only 30 percent of risk managers at thesmallest-size firm category have an MBA.

The number of those with an Associate in Risk Management (ARM)designation is also far from an overwhelming majority. Only two ofthe eight categories surveyed show over half of the respondentswith ARMs.

“There's definitely room for risk managers to grow here,” saidMr. Perry. “The better educated you are, the better chance you haveof moving up the ladder to bigger firms that pay highercompensation.”