As firms seek abilities to handle risks and exposures, there is a growing market for risk management certification on the international job market.
A certified risk professional has a distinct combination of skills, including risk management, ethics, and leadership, which enables them to fit in multiple positions within an organization, which gives them a competitive advantage over others. An extremely significant risk management credential that tackles the severe skills gap in the labor market is the Postgraduate Diploma in Risk Management offered by MANCOSA. You should understand how to create a career path to become a risk management specialist if you are thinking about a career in risk management. You must comprehend what risk management is, what risk management specialists do, the job opportunities in the market, and how to get certified in the subject.
What is risk management?
The possibility of an event and the impact of its consequences can be considered to be the two risk elements. Risks that can obstruct value creation or degrade existing value are indicated by events with a negative impact. In the development of strategies and across the organisation, risk management is used. The discipline of risk management and certifications like the Postgraduate Diploma in Risk Management involve assessing potential outcomes that could impact the entity and managing risk to be within its risk appetite while offering reassuring assurance that the business will accomplish its objectives.
Prevention and control of unfavorable events that could result in losses are part of risk management. This is necessary in a wide range of businesses and organizations, offering a wide range of job choices. Professionals in risk management make sure that laws are followed and that regulatory bodies’ governance structures are implemented. To secure finance and investment, it is crucial to include risk management measures in business applications. Risk management’s range of applications includes:
- Strategic planning
- Financial Risks
Enterprise risk management (ERM) is a revolutionary idea that transforms the conventional method and encapsulates risk management as an integrated, thorough, and strategic system.
What constitutes risk management's five steps?
The five steps of risk management include the following:
- Risk identification
- Risk Assessment
- Risk Evaluation
- Risk Mitigation
- Risk Monitoring
What does a risk manager do?
A risk manager determines the firm’s tolerance for risk, identifies the hazards to which the company is exposed, and manages those risks. Strategic planning and daily operations are both a part of risk management, and they develop business continuity plans to reduce risks. A risk manager’s responsibilities also include:
- risk reporting
- corporate governance
- health and safety
- conducting policy and compliance audits
- Designing and implementing the overall risk management process
The job that risk managers undertake is largely influenced by the sector in which they are employed. Generally speaking, they collect and analyze data to identify internal and external risks and offer recommendations for changing risk management strategies.
Risk Management Examples
There are various types of risk management. Some examples of these include:
- Commodity price risk is concerned with how changes in the price of commodities like oil, copper, platinum gold, and resources, among others, affect the cost of production inputs. For instance, a flour mill that anticipates a rise in the price of wheat over the course of the following year can utilize a forward contract to protect itself from raw material price increases.
- Either debt or equity is used to finance businesses, and the larger the debt-to-equity ratio, the riskier the business is. Financial risk is defined as the risk that depends on the source capital utilized.
- The financial risk raises the possibility of bankruptcy, which is a legal action taken against businesses that are unable to pay their debts.
- Compliance risk relates to the need for organisations to abide by a specific legislative framework in order to function legally in the sectors in which they operate; failing to do so, for example, may result in fines or license revocation.
Careers in risk management
Risk managers evaluate and put into action strategies to avoid losses. You require a bachelor’s degree, preferably in risk management, in order to pursue a risk management certification. If you possess any of the following qualifications, you may also submit an application for a postgraduate diploma in risk management:
- Financial management
- Business management
- risk analyst
- insurance analyst
- loss control representative
- risk consultant
- risk control consultant
- risk management consultant
- risk manager
- business risk manager
- corporate risk manager