Clearing these communication hurdles typically requires one of two approaches by risk management:

Avoid terms with multiple meanings.
Repeatedly define terms during their initial uses. Remember that senior management may not retain the risk management definitions meeting-to-meeting, so meetings may need to start with a brief re-education.

Risk management also can grab the C-Suite's attention by using meaningful metrics. It is always preferable to describe risk management results using impact to earnings per share (EPS) or return on investment. A “20% reduction in work comp dollars” sounds nice, but “a 20% reduction in work comp dollars contributing five cents to EPS” can be music to the c-suite's ears.

If you can employ imagery, even better. Suppose your firm manufactures mattresses. A concise story about efforts to reduce workers' comp dollars, the subsequent impact on EPS, and a graphic of the 10,000 mattresses equivalent to those savings (admittedly, an unconventional approach that might require the assistance of a graphic artist) will make for a more memorable meeting.

Complex concepts can be particularly challenging as they often require a lengthier explanation. One approach to promoting understanding is an analogy to something more common to that executive.

For example, consider the accrual for a large deductible. That number will change annually for years as consulting actuaries adjust their estimates based on claims experience. CFOs can be frustrated by the fluctuation in the projections. They often do not understand why estimated ultimate losses change and a policy year sometimes takes decades to fully close.

Many CFOs better understand the dynamic if it is described as a bond with a fluctuating face value and an indefinite term. CFOs are familiar with bonds and can more easily conceptualize one with a changing face value. “Face value” is analogous to “ultimate loss” in risk management terms. An indefinite term—term being the length of a bond's repayment—is roughly equivalent to the “length of the tail” to those in risk management.

These are just a few solutions to some of the communication issues that can impact the interaction between risk and senior management. While there are plenty of ideas circulating in the risk management community, here are four key takeaways you can use to ensure your next interaction with the c-suite is not lost in translation:

Set the context for the conversation
Be cognizant of terms that have multiple meanings
Use examples and metrics that resonate with your audience
Prepare useful explanations & analogies for more complex topics.

Specialists who can translate their subject matter into terms senior management immediately grasp are enormously valuable to an organization. With these tips, you will not only get your point across, but meet the need of every C-Suite for someone who speaks their language.

Special Reports /

Say what? How to speak 'c-suite'

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