Insurers like to win. Highly competitive in their markets, they are constantly looking for new techniques to get an edge over rivals, while adjusting to the rough consumer and regulatory turf. Toughening up for the future, insurers are developing enterprise risk management (ERM) programs to strengthen their operations against financial blows.
One of the key steps in developing an ERM program is creating a risk committee to advise the board of directors on strategic risks. The risk committee also helps make decisions on key issues that impact day-to-day operations. To build a champion team, sports professionals set firm goals and objectives, invest in talent, appoint dynamic leaders, and commit themselves to extended periods of intense training. Similarly, companies must take concrete steps to build a winning roster of risk experts.
Making the Best of Draft Picks
Risk committees should also have a leader, typically the committee head, who may or may not also be the company’s chief risk officer. He or she may not have the strongest risk background, but must be able to call on additional resources when needed. More importantly, he or she will also have the personal qualities of a coach. These qualities may include:
- Strong organizational skills, with a firm understanding of what time commitment and education will take the team to make deadlines and reach goals.
- A deliberate appreciation of each individual’s strengths and gifts, and the knack of deciding how best to allocate those resources to a team task.
- Composure under pressure, with willingness to shoulder responsibility for major decisions or setbacks, rather than pass the buck.
- Concern for the relationships between team members, and the understanding that people need to feel secure and valued as a team member in order to make their best efforts. Good captains spend time integrating newcomers into the group. They may also help resolve conflicts between current members, with sense of balance and fairness.
Spring Training: Orientation & Warm Up
Motivation can be difficult to maintain for any long-term effort. To maintain motivation for a risk committee, set performance goals for the committee (whether or not tied to compensation). Just meeting or exceeding goals can be a boost to a team. For individual committee members to stay motivated and engaged in ERM efforts, they may appreciate non-financial opportunities, such as working closely with the executives, senior managers, or new business. Alternatively, individual risk committee members may want or need ongoing training and education as a condition of their participation. Explore what help drives these professionals day-to-day.