Franck Baron, group general manager for risk management and insurance at International SOS and chairman for PARIMA, on why risk managers need risk qualifications
Risk qualifications are very much relevant today. They are needed because risk management is not yet seen as a profession, as I discussed in my previous StrategicRISK Asia opinion piece. We are seen as a mission, as a target, or an aim or an objective. This is very different to being seen as a profession. People are approaching risk in very different ways and forms, with very different reporting lines and scope of responsibility. We are missing a reference point where people may say ‘I may have my own version of risk management in my organisation, but this is what I should expect from a risk professional who will be able to support this process’. As chairman of PARIMA, eight months ago we launched our certification for Asia-Pacific and that says a lot about how I am a true believer in risk qualifications.
Risk qualifications are so important because they are a way to make sure people who want to embrace this career are going to get the frame of skills and knowledge that need to be mastered if they want to succeed. Risk qualifications are also vital when it comes to sending a very strong and powerful message towards top management at an organisation about what they should expect from a risk professional and a risk management team.
If you go back to more established roles like in-house lawyers and financial directors, these are very well structured functions. They have their own qualifications, but this does not mean, for example, that every general counsel or in-house lawyers is doing the same thing. It just ensures there is a framework around what they do. This is why a risk qualification is so important, it lets people know what risk management provides for an organisation.
It is also important to remember that we are still in the infancy of risk management within Asia-Pacific. That is why if you look at a good proportion of our members at PARIMA, many of them are not very well recognised within their organisation and their scope of responsibilities are not broad or well understood. The existence of a risk qualification is going to be the way to make organisations understand they are not effectively leveraging the risk management staff they are employing. There is much more that firms can expect from the risk team and much more that team can do. It could also let that firm know that the team they have in place is not the right one, because they will know what risk management should be doing for them.
So what do we understand by a risk qualification? We have a certification at PARIMA, which is a way to certify a set of skills needed by a risk manager. But as for a risk qualification, one that would be gained at Bachelor’s level at a university, I do not think there are any specific qualifications that provide the perfect path to becoming a risk manager. Someone can do a finance, marketing or engineering major and then become a risk professional if they wish. That is why that certification-level is needed as it gives people a clear picture of the skills needed to be a risk manager.
Most risk managers in Asia-Pacific, at least in terms of PARIMA’s members, have a bachelor’s level qualification. Very few have an MBA and this might be because organisations often fund staff doing the actual MBA, but very few risk managers are invited to do that. In many ways experience and business acumen are more valuable than an MBA for a risk manager anyway. It is vital to understand your organisation, the context it works within, the constraints and its strategic objective. Risk managers need to be organisation-savvy about who they work for. You are not working in isolation, you have to understand what a company wants to achieve. That is the only way to ensure that when you are doing risk management within a company, it is going to be seen as a relevant tool for business leaders.
As for the future of risk qualifications, I am still frustrated that the top universities are not integrating risk management modules in their curriculum, so there is huge room for improvement there.