By Ben Perlman, Part-Time Lecturer in the Enterprise Risk Management (ERM) Program, School of Professional Studies
I have been teaching Enterprise Risk Management (ERM) at the School of Professional Studies (SPS) for seven years. One of the program's exceptional features is its faculty, composed of full-time, practicing risk management professionals. These professionals come from various sectors, including finance and insurance—like myself—as well as less conventional industries such as energy, sports, and government. I have collaborated closely with these individuals for many years, and they truly represent the best in the field. The program strikes an eloquent balance between academic rigor and hands-on, real-world risk management.
For me, teaching and practicing risk management—especially in my role as head of ERM at a financial firm—go hand in hand. I wouldn’t want to do one without the other, and I often integrate insights from my professional work into my teaching and vice versa.
In my current role, I sometimes act as the de facto chief economist. I publish a quarterly letter titled “State of Risk,” where I analyze macroeconomic trends and share insights on the broader economy. This work becomes especially critical during the CECL (current expected credit losses) process, an accounting standard that requires organizations to adopt a unified economic perspective across risk management, accounting, and business strategy.
When I teach the capstone course, I encourage my students to stay informed about U.S. and international news, particularly regarding finance. I often begin class by asking if any significant events have occurred that day. Initially, only one or two students would participate, sharing updates on the Federal Reserve, politics, or macroeconomics. However, as the course progressed, nearly every student came prepared to discuss the news, take a position, and defend it. We would debate topics like the effects of tariffs on inflation, the Federal Reserve’s rate-cutting strategy, and GDP predictions. These discussions were always engaging, sometimes heated, and helped foster camaraderie among the class. This engagement became particularly important during the capstone class, where we developed scenarios involving interest rate shocks, oil price assumptions, currency fluctuations, and regulatory risk.
One of the biggest challenges I face as a risk manager is setting limits. This process is both technical and practical. Limits must reflect the risk appetite of the board of directors, but often, the board struggles to articulate their appetite without my guidance. As a risk professional, it is my responsibility to provide them with data and a framework through which they can express their views. This framework must include the measurement of exposure levels; the board cannot effectively weigh in on limit levels without first understanding these exposures.
The concept of measuring exposures first is something I emphasize in my Value-Based class, and it is also a crucial aspect of my role as a risk manager. If the board approves limits without being aware of the exposure levels, it can lead to significant over-limit exposures. This could force the organization to sell assets at discounted prices to comply, ultimately diminishing the enterprise's value. Additionally, if the board has to retract publicly announced limits due to their impact on the organization, it could be embarrassing. In my Value-Based class, I illustrate this point with a scatter plot from my day job that shows over-limit exposures based on new limit levels; this is the same plot I present to the board of directors. This real-world example helps the class grasp the concept better and allows them to see that their assignment is not merely academic, but practical as well.
I feel both fortunate and proud to be part of the ERM program at SPS. The combination of risk managers with practical day-to-day experience, complemented by strong content and bright students, creates a unique and special learning environment. I enjoy my work as a risk manager, and I also value teaching and being associated with a distinguished academic program. I would not want to do one without the other.
About the Program
The Master of Science in Enterprise Risk Management (ERM) program at Columbia University prepares graduates to inform better risk-reward decisions by providing a complete, robust, and integrated picture of both upside and downside volatility across an entire enterprise. For both the full-time and part-time options, students may take all their courses on Columbia’s New York City campus or choose the synchronous online class experience.
Learn more about the M.S. in ERM program here.
