David Hare looks at why actuaries should increase their softer skills if they intend to guard their traditional route to a seat on the board
In last month's column I reflected on how, as actuaries, we need to grasp the initiative in applying our expertise to new sectors and fields before other numerate professionals beat us to it. This month, I extend that to an issue that I know is of concern to some: why is it actuaries no longer seem to dominate the top positions in companies?
When I started working, the career path for an ambitious actuary was well-worn, up the corporate ranks to a seat on the board. A lot has changed since then and actuaries starting out today are unlikely to see such an outcome as a rite of passage. While I don't have any data to draw upon, anecdotal and personal experience tells me that the number of actuaries who sit on the boards of financial services firms, particularly insurers, is now considerably lower than it was a generation ago. So what does this mean for the ambitious actuary of today?
Over the last 20 years there has been a tsunami of change; products, legislation, globalisation, technology. All have had a notable impact on financial companies and successful businesses adapted. Today's senior executives do not seem to be expected to be expert in their employer's business area, but, rather, in generic business skills. Boards need other qualities and competencies beyond technical know-how. Emphasis is placed on strategic planning, setting budgets and targets, acting as business ambassadors and communication skills.
In conversation with a senior executive at a large, well-known financial company recently, I asked what they felt was required to be promoted to high-level roles. Interestingly, her view was while some degree of technical competency was expected, personality and leadership skills were more highly valued. A person in possession of all three attributes is therefore a powerful asset and such individuals are considered rare and valuable commodities.
Actuaries who want to get to the top must therefore adapt. Technical expertise is important, but it is not all that is needed. Personality may not feature highly when listing the attributes of an actuary, but perhaps this should change. Ironically, improved communication skills has aided the understanding of the work actuaries undertake, offering executives with alternative skills a thorough understanding of the work of the actuarial department without requiring the technical qualifications and regulatory certificates. Business is a competitive space, actuaries need to up their game and acquire a more rounded understanding of the tapestry of skills that contribute to today's businesses.
Ambitious actuaries should therefore consider what attributes are valued by businesses. For example, here is a list I came across recently of the types of capabilities being looked for: strategic leader, persuasive diplomat, excellent communicator, problem solver, decision maker, competent manager, energetic networker, politically aware and of course technical expert.
Ideally, we would wish to have most, if not all of these traits, but realistically there will be gaps. Considering what qualities we have and which we are lacking and then undertaking training to plug the gaps is not beyond the scope of an actuary. Achieving this does not require a personality transplant.
If everyone was blessed with technical expertise, personality and leadership skills, such individuals would not be so rare and so valued. As qualified actuaries we have all passed rigorous qualifications that tested our technical expertise and ability to apply relevant judgment. This took years of study, which we all commit to continue by meeting our annual CPD requirements. It is also possible to study and learn soft skills to acquire high level communication techniques for presenting, influencing, negotiating and driving change.
A practical example of how actuaries can demonstrate the attributes relevant to senior roles presents itself with Solvency II. Comprehending the complex nature of the new regime is the first step, but those who aspire to reach the top will also be able to judge how best to communicate the impact on the future business and be able to influence how the business will need to change and adapt. Understanding and relating the risks involved is important, but so too is grasping and communicating the opportunities that changes will provide. Solvency II offers actuaries the ideal opportunity to increase their profile and present the actuarial function in a wider strategic context.
Leadership progression for actuaries is ultimately to the benefit of the whole profession, not just the individual. Networking with representatives of other professionals and across industry sectors - both within the financial world and beyond - is absolutely key to this,
both for the individual and for the advancement and continued relevance of actuarial science. By taking ownership of your career progression and pursuing your own self-interest, I believe that you, as members of the IFoA, will serve the wider interests of the actuarial profession as well as setting yourselves up for success. I wish you well!