Chief risk officer
Encyclopedia
The chief risk officer (CRO) or chief risk management officer (CRMO) of a corporation
is the executive accountable for enabling the efficient and effective governance of significant risks, and related opportunities, to a business and its various segments. Risks are commonly categorized as strategic, reputational, operational, financial, or compliance-related. CRO's are accountable to the Executive Committee and The Board for enabling the business to balance risk and reward. In more complex organizations, they are generally responsible for coordinating the organization's Enterprise Risk Management
(ERM) approach.
The position became more common after the Basel Accord
, the Sarbanes-Oxley Act
, the Turnbull Report
A main priority for the CRO is to ensure that the organisation is in full compliance with applicable regulations (chief compliance officer
). They may also deal with topics regarding insurance, internal auditing, corporate investigations, fraud
, and information security
. CRO's typically have post-graduate education and 20+ years of business experience, with actuarial, accounting, economics, and legal backgrounds common.
Corporation
A corporation is created under the laws of a state as a separate legal entity that has privileges and liabilities that are distinct from those of its members. There are many different forms of corporations, most of which are used to conduct business. Early corporations were established by charter...
is the executive accountable for enabling the efficient and effective governance of significant risks, and related opportunities, to a business and its various segments. Risks are commonly categorized as strategic, reputational, operational, financial, or compliance-related. CRO's are accountable to the Executive Committee and The Board for enabling the business to balance risk and reward. In more complex organizations, they are generally responsible for coordinating the organization's Enterprise Risk Management
Enterprise Risk Management
Enterprise risk management in business includes the methods and processes used by organizations to manage risks and seize opportunities related to the achievement of their objectives...
(ERM) approach.
The position became more common after the Basel Accord
Basel Accord
The Basel Accords refer to the banking supervision Accords —Basel I and Basel II issued and Basel III—by the Basel Committee on Banking Supervision ....
, the Sarbanes-Oxley Act
Sarbanes-Oxley Act
The Sarbanes–Oxley Act of 2002 , also known as the 'Public Company Accounting Reform and Investor Protection Act' and 'Corporate and Auditing Accountability and Responsibility Act' and commonly called Sarbanes–Oxley, Sarbox or SOX, is a United States federal law enacted on July 30, 2002, which...
, the Turnbull Report
Turnbull Report
Internal Control: Guidance for Directors on the Combined Code also known as the "Turnbull Report" is a report drawn up with the London Stock Exchange for listed companies. The committee which wrote the report was chaired by Nigel Turnbull of The Rank Group plc...
A main priority for the CRO is to ensure that the organisation is in full compliance with applicable regulations (chief compliance officer
Chief compliance officer
The chief compliance officer of a company is the officer primarily responsible for overseeing and managing compliance issues within an organization...
). They may also deal with topics regarding insurance, internal auditing, corporate investigations, fraud
Fraud
In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual; the related adjective is fraudulent. The specific legal definition varies by legal jurisdiction. Fraud is a crime, and also a civil law violation...
, and information security
Information security
Information security means protecting information and information systems from unauthorized access, use, disclosure, disruption, modification, perusal, inspection, recording or destruction....
. CRO's typically have post-graduate education and 20+ years of business experience, with actuarial, accounting, economics, and legal backgrounds common.
External links
- The rise and rise of the chief risk officer (article by Sheila Allen, May 12, 2005)
- Skills: Chief Risk Officer (John S. Webster, ComputerworldComputerworldComputerworld is an IT magazine that provides information for senior IT leaders. It is published in many countries around the world under the same or similar names. Its publisher is International Data Group. Computerworld serves the needs of IT management via print and online...
, April 17, 2006) - The Chief Risk Officer: What Does It look Like and How Do You Get There? (article by C.R. Lee and P. Shimpi ,Risk Management Magazine)