One of the primary objectives of most risk management certifications is to ensure that the student is well-trained in the many areas of business risk management. Profit-seeking companies are the largest user of risk management techniques and are thus the largest employer of individuals with risk certificates. Through certification training and courses the student is taught how to identify the business risks unique to their industry or organization, assess the likeliness and impact of occurrence, and manage these risk exposures through elimination, avoidance, transference, and mitigation. There are specific certifications available from individual industry organizations that monitor and evaluate the risk management profession, and therefore there is a plethora of different certificates for individuals and hiring companies to seek.
Business risk management in its most successful form is well-structured, demonstrative, and preemptive. It requires proactive monitoring of its many different but interconnected moving parts. Effective management of business risks typically involves the development and implementation of an organizational risk management policy or plan that outlines the company’s goals as they relate to risk. This framework further aims to identify the processes that will be used to identify risk in the business’ operation and strategy, and indicate which departments or individuals will be charged with analyzing and mitigating them. The skills required to implement such a framework is another benefit of obtaining a risk management certification.
Almost all profit-objective organizations are exposed to some level of risk in their business operations. Examples of business risk include exposure to commodity prices, interest rates changes, ups and down in currency levels, or even unseasonal weather. More generally, firms are exposed to risks in their overall strategy, distribution, or production. The appearance of a new competitor or the increased aggressiveness of an existing one present business risks within the marketplace. Businesses identify risks by typically back-thinking from their objectives and the success drivers of those objectives. By thinking about the ‘situations’ or events that would jeopardize those success drivers, it is often easy to discover some of the risks that organization is exposed to.
Certain elements of business risk management can be designed and conducted by external consultants whom are well-versed in the principles of risk management and often hold risk management certifications themselves. Seeking external advice in the areas of risk identification, analysis, and mitigation is always a strong decision, however there are a few drawbacks; most notably a decreased recognition of the idiosyncrasies of the individual organization and typically a considerable fee. There are, however, risk management consultancy’s that offer sufficient services at manageable fee levels. Furthermore, there are a number of business risk management consultant firms that cater to the unique needs of small and medium sized businesses.
Increasingly, profit-driven organizations are ensuring that a team of certified business risk management professionals operates internally within the firm, with access to senior management. Most large organizations have a C-suite level position focused on risk management, typically with the title of Chief Risk Officer. Of course the need for this position, and his related team, is greatest in particular industries, such as financial services, but their prevalence is up across the board. This increased need for individuals with skills and training in the areas related to risk has improved the credibility and impact of earning a risk management certification from an acknowledged industry association. It has now, more than ever, become a reliable and tangible business training step and a source of abundant opportunity.