In most large companies, the risk management function is assigned to a manager, who reports to the chief financial officer, treasurer, or controller. This executive is charged with the responsibility of implementing procedures consistent with the corporate risk management policy. This person works closely with other functional areas, such as engineering, safety and health, personnel and industrial relations, production, plant security, legal, and accounting. It is important that this person have a thorough knowledge of the company’s operations, products, and services, as well as risk history, so that he or she can evaluate risks and exposure properly. Within these constraints, the job description of the typical risk manager is:
- Ascertain and appraise all corporate risks.
- Estimate the probability of loss due to these risks.
- Ensure compliance with state, federal, and local requirements regarding insurance.
- Select the optimum method for protecting against losses, such as changes to internal procedures or by acquiring insurance.
- Work with insurance agents, brokers, consultants, and insurance company representatives.
- Supervise a loss prevention program, including planning to minimize losses from anticipated crises.
- Maintain appropriate records for all aspects of insurance administration.
- Continually evaluate and keep abreast of all changes in company operations.
- Stay current on new techniques being developed in the risk management field.
- Conduct a periodic audit of the risk management program to ensure that all risks have been identified and covered.