Imagine being a Las Vegas casino owner after the mass shooting last October. Or an oddsmaker, or tourism executive. According to an LA Times story from November 2017, they all felt the economic impact of the event. But did they all have risk managers on staff?
Today, in addition to managing risk around natural disasters, financial exposure and executive behavior (a consideration since the 1990s), businesses must consider the risk of active shooters, terrorism, cyber-attacks, environmental change, sexual harassment—the topics that lead the news. According to Kristen Jaconi, adjunct professor of accounting and director of the USC Leventhal Risk Management Program, “Risks and the management of those risks are at the top of the agenda for executives and board members across industries.”
The problem is talent. Projections show that by 2020 there will be 400,00 open positions in the field. In addition, companies face the retirement of industry knowledge as the current workforce ages.
Indeed, industry experts say that for every one person joining the industry, three are leaving.
“The expected shortfall in risk management talent in the very near future is a major concern for the industry," said John P. Barrett, Executive Vice President of Aon Risk Insurance Services West, Inc. "A recent Accenture poll of CEO’s listed the ability to ‘identify, measure and prioritize risk’ as their no. 1 concern.” There were a small number of schools that offered a formal risk management program, but most were located on the East Coast, he said. “Knowing the kind of talent required in the future, it became clear we needed an outstanding program here on the West Coast.”
“Our networked economy is amplifying risks from every corner. We are training the next generation of risk management professionals to be agile, knowledgeable thinkers, no matter where they work.” --Kristen Jaconi, director, Risk Management Program
This realization led Barrett and Steve Wilder, Vice President-Risk Management at the Walt Disney Company to approach the USC Marshall School of Business about establishing an undergraduate track to train risk management professionals.
Partnering with James G. Ellis, Dean of the USC Marshall School of Business, and William W. Holder, Dean of the Leventhal School of Accounting, an innovative risk management program was established, based at the Leventhal School of Accounting.
“The support of our Business Advisory Council differentiates this program from our peers,” said Jaconi. “But we’re also unique in that we’re introducing courses that relate to this region.” Just this month a new course in “Risk Management in Entertainment, Sports, and the Arts” was approved for spring semester.
“The new class will be added to the existing two risk management courses,” said Wilder, Advisory Council Vice President. “It has been developed in partnership with board members and exemplifies the unique emphasis we place on creating instruction focused on our Southern California business environment.”
Over 40 risk management professionals have volunteered for the Advisory Council. They not only work with program leadership, they hire interns, provide mentorship to students, and hire new employees from USC. Earlier this month 20 firms ranging from Aon to Chubb, Alliant, Disney, FM Global, and R-T Specialty visited campus for “Meet the Risk Management Professionals,” a recruiting event for spring and summer interns and job candidates.
Meeting the Need
In addition to internships and mentoring, the program provides coursework designed around the digital network, global challenges and the role of current events. “We’re trying to teach the students practical, tactical skills,” said Jaconi. “We want them to know what really happens when you’re a risk manager.”
Outside the classroom, Jaconi has focused on informing the broad USC undergraduate population about risk management as a career option. Since she became director of the program in July, the number of students minoring in Risk Management has jumped, going from three to 12 as of early October. Their backgrounds range from business to international relations, cinematic arts, philosophy, mathematics, urban studies and planning.
The range of disciplines is important. Jaconi said the digital age has introduced a new set of risks. “Our networked economy is amplifying risks from every corner,” she said. “Black Swan events, those highly impactful, improbable events seem to be occurring more frequently. We’re training the next generation of risk management professionals to be agile, knowledgeable thinkers, no matter where they work.”