White Paper: RMs Need Status For Program Success

White Paper: RMs Need Status For Program Success

NU Online News Service, June 18, 4:10 p.m. EDT?A risk professional needs to be positioned high enough in an organization to ensure the success of the program, according to a white paper released yesterday by the International Federation of Risk and Insurance Management Associations.[@@]

The paper explained how and why enterprise risk management should be implemented across every organizational structure in order to meet business objectives, and suggested a high employment status for risk managers in different industries.

"Risk is inevitable in today's business environment," said IFRIMA president Susan Meltzer. "It is time to get risk professionals in charge of mitigating the risks they are trained to identify and thereby leverage opportunities that benefit the whole of the company."

According to the document, posted on www.ifrima.org, the value of risk management can and should be achieved by developing policies and activities in three significant areas:

? Contribution to the overall business objectives of the organization. All organizations must take risk in order to be successful, IFRIMA said. Appropriately applied, risk management will allow the organization to take the risks necessary to its overall value, and to leverage opportunities from the ability to take and manage risks.

? Good corporate governance requires that effective risk management programs be established by boards of directors and implemented by management. These programs must be comprehensive and transparent, promoting risk consciousness through the organization and allowing for comprehensive reporting externally to shareholders and regulators.

? Protection from adverse variances and catastrophes requires the consideration of both internal and external risk factors. Achieving appropriate protection requires a combined focus on risk mitigation and risk transfer through insurance, hedging or other financial instruments, according to IFRIMA.

"Risk professionals don't fit into a certain mold," said Ms. Meltzer, who also serves as assistant vice president of risk management at Sun Life Financial in Ontario. "Frankly, that is the intrigue of this profession for many of us. Across different industries, throughout different countries, the job description varies tremendously."