More and more companies are creating the new role of Chief Risk Officer ("CRO") to lead their efforts to manage the growing complexity of risks. The complexity is increasing as companies begin to rely more on external service providers, make greater use of advanced technologies and operate in different areas across the globe. To be successful in this mission, CROs must possess the right mix of demonstrated competencies and abilities. This topic was discussed in a recent article in Business Insurance magazine. Here is a sample of what they had to say.
In every company, establishing a clear chain of command is vital to success. Risk, as an ongoing companywide issue, requires that the CRO report directly to the chief executive officer and have the flexibility to recruit and manage a small staff globally. The expansive nature of risk management also necessitates that the CRO steward numerous strategic partnerships with internal constituencies and outside strategic partners. He or she should partner with the general counsel, chief operating officer, chief financial officer and the top internal audit officer, all of whom should view the CRO role as a complement to their areas of responsibility.
CEOs need a risk expert who can act as architect and engineer in building a comprehensive enterprise risk management infrastructure; one that spans all parts of the organization and provides a clear and easy-to-interpret real-time interface for senior management regarding all risk-related activity.
Searches to fill these new roles will be difficult due to the fact that there are few people who have experience in the role and/or the combination of skills to be successful. However, the right candidate is crucial to establishing a program to manage risks effectively over the long-term.
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