Women in Risk Management

Leadership Gender Gap Persists

The number of women in risk management leadership roles is increasing, but the field is dominated by men.
By: | January 9, 2017 • 3 min read
Topics: Risk Managers

Women still have a long way to go to attain senior-level risk management positions, according to a recent study “Women in Financial Services,” by the Oliver Wyman consultancy.

Only 15 percent of chief risk officers are women. The percentage is even lower in the banking industry, where only 10 percent of CROs are women.

But the research was not all discouraging. The study found that female representation is increasing on boards and executive committees in the financial industries – and much of the growth between 2013 and 2016 comes from women taking on CRO and CFO roles.

In 2013, only 7 percent of CROs were women, according to the Oliver Wyman study.

Nicole Lamb-Hale, managing director, investigations and dispute practice, Kroll

Nicole Lamb-Hale, managing director, investigations and dispute practice, Kroll

“I think the risk management field isn’t that different than many other professional fields in terms of the number of women who ascend to leadership roles,” said Nicole Lamb-Hale, managing director, Kroll’s investigations and dispute practice.

“Some of it has to do with mentoring and exposure. Some may have to do with the extent that women may not be aware of opportunities in the risk management area,” she said. “It’s a very interesting industry and I am very happy to be a part of it now.”

Lamb-Hale, who previously was assistant secretary and deputy general counsel at the U.S. Department of Commerce, as well as having been a partner in two major law firms, said that Kroll has committed itself to bringing in women for leadership positions.

Andrea Bonime-Blanc, CEO of GEC Risk Advisory, also took a nontraditional route to a risk management role, having worked as a general counsel and then in ethics and compliance roles.

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“The CRO’s role is a relatively newer role than general counsel or CFO,” she said. “I think it’s a little less organized in the sense of diversity initiatives targeted to that particular role. I think that’s part of what’s going on here.”

The Oliver Wyman research suggested four main reasons for the gender imbalance:

  • Fewer women graduate in technical subjects;
  • The constant need for oversight may be incompatible with women who want to play a major role in their children’s lives;
  • The potentially confrontational nature of the role may deter some women; and
  • Conservative business leaders may hesitate to appoint women to a traditionally male role.

“For too many mid-career women, the costs [of leadership positions] seem to outweigh the benefits, and they choose to step back from their careers,” according to the study.

Susan Colantuono, CEO of Leading Women, a consultancy that advises companies on ways to close the leadership gender gap, said there may be bias in existing HR or promotion systems, but another factor working against women is they are perceived as lacking business strategy and financial acumen.

She said women in middle management need to shift their identity “to being someone who positions the organization in its marketplace and develops the leadership and executive presence or brand that makes you a credible representative of the business in the external marketplace.”

Andrea Bonime-Blanc, CEO, GEC Risk Advisory

Andrea Bonime-Blanc, CEO, GEC Risk Advisory

Bonime-Blanc noted that many mid-level managers are extremely competent but are not “taken seriously by the business people because they are not connecting their work directly to the strategy of the business.”

“I don’t think that is a gender issue,” she said. “I think that’s a role issue,” noting that when professionals work in non-core business roles they may be marginalized by the corporate leadership.

Lamb-Hale of Kroll said it’s important for organizations to develop a pipeline to increase the opportunities for women in risk management. Initiatives should include using mentors to help young women develop their careers.

“Insurance is male-dominated,” she said. “There are many industries that are male-dominated and women, when given the opportunity, have done very well, be it in risk management or insurance or any other industry.”

Colantuono said risk management professionals who succeed at advancing their careers “learn how to look at the function through the eyes of the executive team and the board and not through the eyes of the profession or the field of risk management.” &

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2017 RIMS

RIMS Conference Opens in Birthplace of Insurance in US

Carriers continue their vital role of helping insureds mitigate risks and promote safety.
By: | April 21, 2017 • 4 min read

As RIMS begins its annual conference in Philadelphia, it’s worth remembering that the City of Brotherly Love is not just the birthplace of liberty, but it is the birthplace of insurance in the United States as well.

In 1751, Benjamin Franklin and members of Philadelphia’s first volunteer fire brigade conceived of an insurance company, eventually named The Philadelphia Contributionship for the Insurance of Houses from Loss by Fire.

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For the first time in America — but certainly not for the last time – insurers became instrumental in protecting businesses by requiring safety inspections before agreeing to issue policies.

“That included fire brigades and the knowledge that a brick house was less susceptible to fire than a wood house,” said Martin Frappolli, director of knowledge resources at The Institutes.

It also included good hygiene habits, such as not placing oily rags next to a furnace and having a trap door to the roof to help the fire brigade fight roof and chimney blazes.

Businesses with high risk of fire, such as apothecary shops and brewers, were either denied policies or insured at significantly higher rates, according to the Independence Hall Association.

Robert Hartwig, co-director, Center of Risk and Uncertainty Management at the Darla Moore School of Business, University of South Carolina

Before that, fire was generally “not considered an insurable risk because it was so common and so destructive,” Frappolli said.

“Over the years, we have developed a lot of really good hygiene habits regarding the risk of fire and a lot of those were prompted by the insurance considerations,” he said. “There are parallels in a lot of other areas.”

Insurance companies were instrumental in the creation of Underwriters Laboratories (UL), which helps create standards for electrical devices, and the Insurance Institute for Highway Safety, which works to improve the safety of vehicles and highways, said Robert Hartwig, co-director, Center of Risk and Uncertainty Management at the Darla Moore School of Business at the University of South Carolina and former president of the Insurance Information Institute.

Insurers have also been active through the years in strengthening building codes and promoting wiser land use and zoning rules, he said.

When shipping was the predominant mode of commercial transport, insurers were active in ports, making sure vessels were seaworthy, captains were experienced and cargoes were stored safety, particularly since it was the common, but hazardous, practice to transport oil in barrels, Hartwig said.

Some underwriters refused to insure ships that carried oil, he said.

When commercial enterprises engaged in hazardous activities and were charged more for insurance, “insurers were sending a message about risk,” he said.

In the industrial area, the common risk of boiler and machinery explosions led insurers to insist on inspections. “The idea was to prevent an accident from occurring,” Hartwig said. Insurers of the day – and some like FM Global and Hartford Steam Boiler continue to exist today — “took a very active and early role in prevention and risk management.”

Whenever insurance gets involved in business, the emphasis on safety, loss control and risk mitigation takes on a higher priority, Frappolli said.

“It’s a really good example of how consideration for insurance has driven the nature of what needs to be insured and leads to better and safer habits,” he said.

Workers’ compensation insurance prompted the same response, he said. When workers’ compensation laws were passed in the early 1900s, employee injuries were frequent and costly, especially in factories and for other physical types of work.

Because insurers wanted to reduce losses and employers wanted reduced insurance premiums, safety procedures were introduced.

“Employers knew insurance would cost a lot more if they didn’t do the things necessary to reduce employee injury,” Frappolli said.

Martin J. Frappolli, senior director of knowledge resources, The Institutes

Cyber risk, he said, is another example where insurance companies are helping employers reduce their risk of loss by increasing cyber hygiene.

Cyber risk is immature now, Frappolli said, but it’s similar in some ways to boiler and machinery explosions. “That was once horribly damaging, unpredictable and expensive,” he said. “With prompting from risk management and insurance, people were educated about it and learned how to mitigate that risk.

“Insurance is just one tool in the toolbox. A true risk manager appreciates and cares about mitigating the risk and not just securing a lower insurance rate.

“Someone looking at managing risk for the long term will take a longer view, and as a byproduct, that will lead to lower insurance rates.”

Whenever technology has evolved, Hartwig said, insurance has been instrumental in increasing safety, whether it was when railroads eclipsed sailing ships for commerce, or when trucking and aviation took precedence.

The risks of terrorism and cyber attacks have led insurance companies and brokers to partner with outside companies with expertise in prevention and reduction of potential losses, he said. That knowledge is transmitted to insureds, who are provided insurance coverage that results in financial resources even when the risk management methods fail to prevent a cyber attack.

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This year’s RIMS Conference in Philadelphia shares with risk managers much of the knowledge that has been developed on so many critical exposures. Interestingly enough, the opening reception is at The Franklin Institute, which celebrates some of Ben Franklin’s innovations.

But in-depth sessions on a variety of industry sectors as well as presentations on emerging risks, cyber risk management, risk finance, technology and claims management, as well as other issues of concern help risk managers prepare their organizations to face continuing disruption, and take advantage of successful mitigation techniques.

“This is just the next iteration of the insurance world,” Hartwig said. “The insurance industry constantly reinvents itself. It is always on the cutting edge of insuring new and different risks and that will never change.” &

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]