What is a risk manager? Roles and responsibilities

What does a risk manager do?

The risk manager's job is to protect a company's property and profits -- as well as its public image and reputation -- against loss. This involves multiple duties, including the following:

• Risk identification. The first task is to identify potential risks to the organization. These can be internal concerns such as employee mistakes, operational failures and malicious employee behavior, as well as external threats such as cyberattacks, market uncertainty and regulatory changes.
• Risk assessment and analysis. Each identified risk is then scrutinized for its possible occurrence and subsequent organizational impact. Risk assessment often involves quantitative methods, including financial modeling and statistical analysis, and qualitative methods, such as scenario planning and gathering expert opinions.
• Risk evaluation and prioritization. Continuing the assessment, the manager compares each risk with the organization's vulnerability to -- and comfort with -- that risk, prioritizing accordingly.
• Risk mitigation and control. Once risks are identified and prioritized, the manager develops and implements strategies to avoid or mitigate damage.
• Risk monitoring and review. Risk assessment requires continuous monitoring of an organization's sprawling infrastructure, including its physical office(s), financial systems, network and physical servers. Risk managers regularly evaluate, probe and test these areas and others, then review the company's risk mitigation strategy.
• Reporting and communication. In addition to internal reviews and assessments, risk managers must routinely communicate risk management activities, with appropriate complexity, to various stakeholders. This includes the board of directors, senior management and employees.
• Ensuring compliance. Regulatory compliance helps avoid government interference. Effective risk managers know the latest industry laws, regulations and other standards.
• Budget management. All of this must be done within budget, which influences the overall strategy. For example, risk managers must balance ambitious programs they create to reduce risk exposure with limited payroll available to achieve those goals on a day-to-day basis.

What skills and qualifications are needed to become a risk manager?

A bachelor's degree is generally considered the minimum requirement for a risk manager. Some universities, including many online universities, offer specific degrees in risk management and insurance. The following are some other acceptable majors for a would-be risk manager:

• Business administration/management.
• Finance.
• Economics.
• Accounting.
• Mathematics/statistics.
• Law.
• Cybersecurity.

In addition to formal education, risk managers need a diverse set of both technical and soft skills, including the following:

• Analytical and problem-solving abilities.
• Quantitative skills, such as financial modeling, statistical analysis and forecasting.
• Understanding of financial principles and market dynamics.
• Communication and interpersonal skills.
• Knowledge of regulatory compliance.
• Organizational and project management skills.

Though they're not mandatory, professional certifications significantly enhance a risk manager's credibility and career opportunities. The following are some popular and valuable certifications:

• Financial Risk Manager (FRM). Offered by the Global Association of Risk Professionals, FRM is a globally recognized certification for finance professionals specializing in risk management.
• Professional Risk Manager (PRM). Offered by the Professional Risk Managers' International Association, PRM is another globally recognized credential for risk management professionals.
• Chartered Enterprise Risk Analyst (CERA). Provided by the Society of Actuaries, CERA certification focuses on enterprise risk management and requires a strong understanding of the economic, financial and regulatory environments.
• Certified Risk Manager (CRM). Offered by the National Alliance for Insurance Education & Research, the CRM program provides a comprehensive overview of risk management principles and practices.
• RIMS-Certified Risk Management Professional (RIMS-CRMP). The Risk Management Society, or RIMS, provides RIMS-CRMP competency-based certification, which validates a professional's ability to manage risk effectively. It is the only risk management certification with American National Standards Institute National Accreditation Board accreditation under ISO/IEC 17024:2012.
• Certification in Risk Management Assurance (CRMA). Offered by the Institute of Internal Auditors, CRMA certification is designed for internal auditors who specialize in risk management assurance.

The day-to-day work of a risk manager

Risk managers must handle some repetitive, daily tasks. These duties vary in number depending on the industry, size and complexity of the organization, but they typically include the following responsibilities:

• Scrutinize data on both internal and external risks.
• Analyze data in relation to organizational risk appetite.
• Notify management of principal threats.
• Assess all organizational practices and their risk potential.
• Examine current risk management methods and update as needed.
• Use qualitative and/or quantitative analysis to assess risk-reward scenarios.
• Regularly revisit risk assessment as conditions change.
• Pinpoint any vulnerability, making appropriate changes.

Risk managers meet routinely with business heads, usually monthly, to review the prior period's risk performance; address the number of incidents, near misses and losses; update the list of principal risks, if needed; and introduce any key initiatives or projects.

These meetings not only enable management to review the organization's principal risks, but they also let risk managers present and gain support for action plans to address these risks.

Additionally, business units often approach the organization's risk manager for advice and guidance on applying risk policies and frameworks. To provide useful guidance, risk managers must be well versed in company policy, regulatory compliance and the specific business unit's operations. Moreover, policy changes often require additional training from the risk management team as the organization implements them.

What is a typical risk manager career path?

Similar to many careers, a risk manager's path often begins in an entry-level role, progressing through increasing levels of responsibility and strategic involvement. Here's a general outline:

1. Entry-level positions. In these beginner jobs, analysts cover risk and compliance, develop skills, learn the industry and report to more senior-level managers.

2. Midlevel positions. As they gain experience and establish trust, successful analysts move into managerial roles, where they must develop and implement management policies and procedures. They begin to work with other departments to address risk mitigation.

3. Senior-level positions. Senior risk managers lead complex risk management projects, develop long-term risk mitigation strategies and supervise a team of risk professionals. They report to upper management, either a director or someone in the C-suite.

4. Executive-level positions. The most senior risk management role within an organization is the chief risk officer. The CRO is responsible for and oversees the entire risk management team, developing strategy, integrating risk management within corporate governance and advising senior management on risk-related matters.

Salary, job outlook and interview questions

According to Indeed.com, the average annual U.S. salary for a risk manager in April 2025 was $110,047, depending upon experience, industry and location.

The job outlook for risk managers is expected to grow. The U.S. Bureau of Labor Statistics projects employment for financial managers -- which includes risk managers -- to grow much faster than the average for all occupations, with 17% growth expected from 2023 to 2033.

Typical interview subjects and questions include foundational understanding, mitigation and control, communication and stakeholder management, technical skills and a demonstrated ability to identify potential risks. They also include sharing job-related situational challenges and thoughts on addressing these issues.