By MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance®
Let's face it. Risk management has its fair share of bean counters and insurance buyers, bit players taking up space in exchange for a paycheck, many novices and even some no-goodniks. The thought brings to mind a memory from the RIMS meeting in Hawaii a few years back, after which I found one risk manager (from a rather large company) on the beach. I asked what she liked best about the conference, and she said something like, "You're looking at it." She'd spent the whole time on the sand at Waikiki.
Look, I'm not picking on risk managers. It's a simple law of humanity that not everyone can be a superstar. Most people in the business, any business, are just average, or, maybe to be nice, let's say slightly above average.
If you are a CFO or treasurer and have one of these average risk managers working underneath you--somebody that gets only slight premium raises at renewal every year, or who can be counted on to keep comp claims from increasing too rapidly year to year--I am all for forestalling a bonus and freezing pay raises.
Worse yet, if you're one of those companies, financial or otherwise, that's gotten lost in today's economic wilderness, and your risk manager has failed to provide the risk compass to keep (or regain) your bearings, by all means hold off on that bonus. (Fewer risk managers are expecting it too, according to a recent study.)
Or, do what Bank of America did (recently as of this writing) and clean risk management house. Plenty of talented, ambitious and innovative risk professionals are available out there, standing out as A students among the sea of Cs, awaiting that big break.
Take our cover girl this month: Google's risk manager Kelly Crowder. Her position was new to the Internet giant--not one emptied after a predecessor got the ax--but she's taken full advantage of the opportunity Google afforded her.
Oh, you already have a superstar like Crowder as your risk manager? One of the top 10 percenters, a true original thinker, someone whose influence can be felt from the factory floor to the chief executive's door, a superstar you can count on in a clutch before you even know the clutch has arrived?
Then you better damn well give them that bonus this year.
I know, I know, economic uncertainty this, global recession that. Still, be honest. Are you one of the many nonfinancial companies that aren't that hard off? Many corporations out there have solid books, without the debt and insidious investments that are sinking financial entities. If you're one of them, don't hit the brakes on your risk manager's compensation simply because you see the red brake lights ahead of you in traffic.
Sure, sure, if your company's laid off thousands this year and all salaries are frozen until further notice, your hands are tied. You can't reverse companywide policies for one employee, no matter how superior they are at what they do.
But then you better at least find some other way to show them your appreciation and you better budget down the road for some hefty monetary rewards to make up for these lean years. Let your risk manager feel the love now, even if it's deferred.
Otherwise, when times turn around--or even right now if your superstar is that ambitious--your risk manager will shop around for a better job. Yes, monetary compensation and bonuses are not everything, but they sure feel nice to get. And the big bucks will surely be dangled in front of your standout risk manager soon.
Talent eventually gets its due. So make sure it's you doing the dangling.
(Read Managing Editor Cyril Tuohy's opposing viewpoint on risk manager compensation.)
July 1, 2009
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