Getting Schooled on Risk: Graduate Programs Cultivate Talent for the Times

When risk management veteran Clifford Rossi started out in the 1980s with a Cornell University PhD in Financial Economics and Quantitative Methods, his goal wasn’t to become a risk specialist per se, or even a chief risk officer. Although he eventually became both, Rossi recalled that he ended up in risk management mostly by being in the right place at the right time with the right skills.

Today, the self-described “accidental risk manager” is instrumental in helping the next generation make its way – with intent.

Since 2009, Rossi has been teaching at the University of Maryland’s Robert H. Smith School of Business as executive-in-residence and professor-of-the-practice. The program, as currently configured: Master of Finance, Financial Analysis and Risk Management track.

He said he recommended that the risk management track be added on around nine years ago, right before his book, A Risk Professional’s Survival Guide: Applied Best Practices in Risk Management, was published. About 25 to 30 students are enrolled in this track at any given time, he added.

Clifford Rossi

Rossi reasoned, “I positioned this as a significant opportunity for our students [who] are strong analytically to augment those skills with applied risk management that the financial services industry needs.”

There has always been learning on the job. These days, there’s also learning for the job.

Proliferating Programs

Degree-granting graduate school programs specializing in risk management have flourished since the global financial crisis and adoption of the 2010 Dodd-Frank Act. It’s not surprising, given the rise of risk professionals into C-suites as CROs, and even chief executives.

Over the past few years, pressing ESG concerns and the global pandemic have catapulted risks and risk management even more into the corporate and public consciousness. This has been driving up demand for risk managers, along with worries about recruitment and retention.

Risk managers are a “hot commodity,” and there aren’t “enough candidates,” cautioned Stacie Kroll, managing director of the higher education practice for insurance and risk management consulting firm Gallagher. She shared her perspective during a March 17 RIMS webinar on the question, Is your company prepared to fill a risk manager talent gap?

Graduate school risk management programs – along with their executive and continuing education, certificate-conferring counterparts – have become increasingly popular talent pipelines for placement and advancement in the risk profession.

New Wave of ERM Adoption

Consider the Columbia University School of Professional Studies Master of Science in Enterprise Risk Management.

“The prominence, visibility, and increasingly strategic nature of the CRO role has contributed to the interest in ERM, and our program’s emphasis is on integrating ERM into strategic decision-making,” stated Sim Segal, who founded the program in 2016 and serves as director and senior lecturer.

Sim Segal

President of ERM consulting firm SimErgy and author of the 2011 book Corporate Value of Enterprise Risk Management, Segal acknowledged in an email exchange with GARP Risk Intelligence that the pandemic has also played a part. “A new wave of organizations is moving to adopt ERM programs,” he pointed out, and “something similar happened after the financial crisis.”

“We have seen strong enrollment patterns and even a slight uptick lately,” Segal observed. “While the majority of our students are relatively new entrants – getting their first or second Master’s degree – we have a sizable cohort that is more experienced.”

Real-World Orientation

It’s hard to get a handle on exactly how many of these risk education programs are out there. What they appear to have in common, though, is that they ready students to meet real-world challenges head-on.

“We prepare students for a wide range of ERM and risk management roles,” Segal specified. They include: “corporate ERM – ranging from CRO to supporting team members; financial risk management – of credit risk, market risk, derivatives risk, model risk and liquidity risk; operational risk management including technology risk; insurance risk management; strategic risk management including supply chain risk; and audit and compliance roles.”

“The skill sets vary by the sector and type of role, because ERM/RM is a very wide discipline,” he commented. “However, in the financial sector’s financial risk management and insurance risk management roles, coding skills and quantitative skills are paramount and ever-evolving.

“ERM/RM roles are often driven by changes in regulatory and rating agency requirements or market pressures such as ESG,” Segal continued. “Communication skills are paramount across all sectors and roles, and skill sets are also evolving here, such as the growing recognition of the need to adapt for cognitive bias.”

Supply Chain Specialty

Case Western University’s Weatherhead School of Management recently added two new courses focusing on risk management and strategy to its Master of Supply Chain Management. “While supply chains used to be more predictable, the past few years have seen not only disruptions related to COVID-19, but also singular events such as a container ship that blocked the Suez Canal for six days, throwing global trade routes into chaos,” the spring/summer 2022 edition of the university’s THINK magazine reported.

The program’s class profile page shows 29 students enrolled last fall, up from 13 the year before. They averaged 25 years of age and 1.6 years of full-time work experience.

“We want to make sure our students are aware of these disruptions and their sources, and think about the solutions,” former program co-director and associate professor Alireza Kabirian was quoted as saying. (Kabirian is now associate professor of clinical data sciences and operations at the University of Southern California’s Marshall School of Business.)

Teams Deliver Results

Rossi, who was CRO for Citigroup’s Consumer Lending Group during the financial crisis, revealed that when thinking about up-and-coming risk managers, he asks himself, “If I were still a CRO, what kind of skill sets would I be hiring for?”

This spring semester, two teams of University of Maryland students participated in seven-week, experiential learning projects involving extensive data analysis – assignments the academic said he arranged along with sponsors Fannie Mae and Freddie Mac.

Rossi, who had also worked at both government-sponsored enterprises, told students for these purposes, “I look at myself as your boss, not your professor.”

The Fannie cohort built a comprehensive housing market risk index, he elaborated, while the Freddie team developed a financial flood risk vulnerability score for the 283 U.S. counties most at risk according to the First Street Foundation Flood Model.

He explained that students learned how to collaborate as colleagues; put together and preside over a project from start to finish; and communicate technically-complicated information to senior managers – including a CRO and regulators in attendance.

As to the significance of this for students and potential employers, Rossi remarked, “Almost to a person, I hear [students] say that when they go for job interviews, this is all their prospective employers want to talk about.”

“It’s a high-class vocational program,” he said.

L.A. Winokur is a veteran business journalist based in the San Francisco Bay Area.