Originally a risk manager is a purchaser and manager of insurances, focused on managing operational risk. Because of increasing importance of compliance at organizations, legal and financial subjects have become a fixed matter for risk managers which have changed their role.

The risk manager has become the right-hand man of the CEO and/or CFO. Many operational risks are also strategic in nature, especially in the current volatile world. Thus a declining dollar not only involves valuation risks and also influences the purchase and production prizes as well as the competitive position of an organization. This can then influence the market shares and produces the fact that fluctuation in valuation brings along strategic risk. In 2008 for example, this development led Volkswagen to decide to move a part of production to the US to arm itself against the weak dollar. By looking only at the possibilities to financially control valuation risk, for example by arranging valuation swaps, FRA’s, or futures, you pass over operational possibilities to profit from a low dollar exchange rate, such as moving production activities. This changes the role of the risk manager and purchaser and administrator of the insurers to the advisor of the board. The risk manager can estimate which risks are approaching the company and how he can quantify those risks.
By taking the time to look at the future and take stock of possible developments, an organization can make an inventory of different possible risks. On the basis of this inventory certain actions can be executed or put ready so that adequate action can be taken in the case of the manifestation of such an event. This can reduce the downside of the risks and enable profit from a possible upside. De Ruijter Strategy helps organization to think about possible future risks, and more important, which possibilities the organization has to turn these risks into opportunities. In addition, De Ruijter Strategy lectures in Enterprise Risk Management to the students of the University of Amsterdam and has been working with leading company in risk management Aon for years.

Read the article about connected risks Paul de Ruijter wrote for FD Outlook.

Would you like to know more about how De Ruijter Strategy can be of service to your risk management? Contact us at +31 (0) 20 625 02 14, or email Jolanda van Heijningen: jolanda@deruijter.net