Demand for CROs on the Rise

Chief Risk Officers are beginning to make their mark in industries other than financial services, according to a recent article by Lloyd's.  Many of these new positions will need to be filled by risk managers that may not necessarily have the full complement of skills that their financial services peers may possess.  Here is what Lloyd's and a seasoned risk management practitioner have to say about the issue.

In these times of economic uncertainty, with risk management increasingly recognised as a core competency, insiders now expect CROs to start appearing in major industry sectors outside financial services.  Some insiders have questioned whether risk managers, who traditionally have a background in operational issues, have the necessary financial skills to make the transition however. Joe Restoule, president of the US risk manager association the Risk & Insurance Management Society (RIMS), thinks not.

Restoule, who is in charge of risk management at NOVA Chemicals Corporation, thinks that those risk managers that have embraced enterprise risk management (ERM) have by necessity become more financially savvy.  “It isn’t widespread yet but I sense that risk managers are certainly aspiring to ascend to the CRO position. Risk managers have to be more financially focused because there is so much emphasis today on liquidity and solvency—in terms of their own business but also in terms of the insurers they must deal with,” he says from his office in Calgary, Canada. “So we’re getting better all the time at using the tools to manage these financial risks.”

As more companies adopt an Enterprise Risk Management approach, qualified candidates for the new CRO role will emerge.  It is only a matter of time.