Keys to Success for a Chief Risk Officer

In a recent article written by John A. Wheeler of Wheelhouse Advisors LLC, the evolving role of the Chief Risk Officer (“CRO”) is examined.  Many companies are either elevating the role or creating the role anew.  To be successful, companies must be aware of what is ultimately required for both the role and the person assuming the position.  Here is a brief excerpt from the article addressing this issue.

The true CRO should be the champion and ultimate sponsor of ERM within an organization. To succeed in achieving this objective, the role requires the commitment and full support of both the board of directors and CEO. In addition, the role requires a unique skill set that combines a deep understanding of the business, an appreciation for risk management principles, strong leadership capabilities, and a strategic mind-set. This is a tall order for most organizations, especially when budgets are tight and short-term earnings pressures are so acute.

The challenges do not end there. At the core, the organization’s culture must align with and support the ERM program. This means that its managers and employees must have a certain level of risk awareness as well as a willingness to own the risks they take. This is created by leadership emphasis from the CEO, CRO, and other senior management members. However, more importantly, the compensation and performance management structure must be designed to provide incentives for appropriate behavior within an organization’s risk appetite.

Simply appointing someone to the position of Chief Risk Officer without understanding what the role requires or addressing the cultural implications will result in certain failure.  Wheelhouse Advisors can help your company establish the proper environment for a Chief Risk Officer to succeed.  To learn more about how Wheelhouse Advisors can help, visit www.WheelhouseAdvisors.com.

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About Wheelhouse Advisors
Wheelhouse Advisors LLC is the publisher of The ERM Current™, an online publication and blog dedicated to providing the latest updates on current trends in Enterprise Risk Management & Control. Wheelhouse Advisors provides cost-effective Enterprise Risk Management & Control solutions to both large and mid-size corporations. To learn more about Wheelhouse Advisors, please visit our web site at www.WheelhouseAdvisors.com.

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