Responsibility # 1 – Identify all the Possible Risks
The first responsibility of a Risk Management Expert is to identify all the areas in which a company has a possible risk exposure. This risk exposure may arise due to entering new markets or even due to existing liabilities. One of the key responsibilities is to identify and evaluate the risks associated with the liabilities. He/she has to collect data about these involved risks, document them and let the management know about these risks. Once he/she has identified the sources of potential risk, he/she has to check if the organization can avoid the risk by not entering new markets or by trying to get in funds to offset the liabilities.
Responsibility # 2 – Find all the Feasible Solutions
After identifying all the possible risks, the risk management expert has to think and conceptualize all the possible solutions to stem or eliminate the risk. A risk management expert also has to figure out how losses can be minimized and how the expenses incurred through possible losses can be covered. Further financial instruments which help cover risks have to be thoroughly analyzed by the risk management expert so that they can be made use of in the time of need. The risk management expert should also evaluate the liquidity of the company and see if acquiring liquid assets can be a viable option for the future. The onus is on the risk management expert to discuss the various options available with the company’s management.
Responsibility # 3 – Implement the Optimal Solution
A risk management expert has the responsibility of helping the management decide on the optimal solution and the next course of action. He/She must evolve a risk management model which makes the best use of all the available solutions and customizes it to suit the company’s needs. After working out the mathematical probability of the success of the conceptualized model, he/she will be involved in implementing the optimal solution to either help the company negate a crisis or detour a risk. The risk management expert has an additional role of evaluating the percentage of success that the risk management model has had and must innovate in order to maximize the success percentage.
Overall, a risk management expert has a key role of ensuring that a company’s profitability does not dip due to its risk exposure.