Chief Risk Officer Definition, Common Threats Monitored
What Is a Chief Risk Officer (CRO)? A chief risk officer is a corporate executive responsible for identifying, analyzing, and mitigating internal and external risks. The chief risk officer works to ensure that the company complies with government regulations, such as the Sarbanes-Oxley Act, and reviews factors that could hurt investments or a company’s business units. CROs typically have post-graduate education with more than 20 years of experience in accounting, economics, legal, or actuarial backgrounds. They are also referred to as chief risk management officers (CRMOs).
- A chief risk officer (CRO) is an executive in charge of managing risks to the company.
- It is a senior position that requires years of prior relevant experience.
- The role of the chief risk officer is constantly evolving as technologies and business practices change.
Understanding the Chief Risk Officer (CRO) The position of chief risk officer is constantly evolving. As companies adopt new technologies, the CRO must govern information security, protect against fraud, and guard intellectual property. By developing internal controls and overseeing internal audits, threats from within a company can be identified before they result in regulatory action.
Risks CROs Must Watch For The types of threats the CRO usually keeps watch for can be grouped into regulatory, competitive, and technical categories. As noted, companies must ensure they are in compliance with regulatory rules and fulfilling their obligations on reporting accurately to government agencies.
CROs must also check for procedural issues within their companies that may create exposure to a threat or liability. For example, if a company handles sensitive data from a third party, such as personal health information, there may be layers of security that the company is required to maintain to ensure that data is kept confidential. Some key considerations include:
- Compliance with Data Security:
- Ensuring appropriate security measures for handling sensitive data.
- Addressing lapses in security and unauthorized access to sensitive information.
- Mitigating competitive risks associated with unauthorized access to sensitive data.
- Safety and Health:
- Assessing risks to employees working in areas with potential threats.
- Developing action plans to ensure the safety of personnel.
- Complying with mandated procedures, including possible evacuations.
By effectively monitoring and addressing these risks, the CRO plays a critical role in safeguarding the company’s interests and maintaining regulatory compliance.
Websites and Online Resources:
- Risk Management Association (RMA): Offers resources, publications, and educational materials related to risk management practices. Visit Website
- Association for Financial Professionals (AFP): Provides insights, articles, and webinars on risk management and the role of the chief risk officer. Visit Website
- “The Risk Management Process: Business Strategy and Tactics” by Christopher L. Culp: Provides a comprehensive overview of risk management principles and practices. View Book
- “Implementing Enterprise Risk Management: Case Studies and Best Practices” by John Fraser and Betty Simkins: Explores real-world examples and best practices for implementing risk management frameworks. View Book
Academic Journals and Research Papers:
- “The Role and Impact of the Chief Risk Officer: A Literature Review” by Jiří Strouhal and Eva Vávrová: Analyzes the evolving role of the CRO and its impact on risk management practices. Read Paper
- “The Chief Risk Officer and Corporate Policy Effectiveness” by Renée M. Dailey: Examines the relationship between the CRO’s presence and the effectiveness of corporate risk policies. Read Paper
Reports and Studies:
- Deloitte’s “The Chief Risk Officer: Powering Risk Management in the Face of Uncertainty” Report: Provides insights into the evolving role of the CRO and effective risk management strategies. Access Report
- PwC’s “Rethinking Risk Culture: How to Embed Risk Culture in Financial Services” Report: Explores the importance of risk culture and the CRO’s role in driving a strong risk culture within organizations. Access Report
Professional Organizations and Associations:
- Global Association of Risk Professionals (GARP): Offers professional certifications, research, and networking opportunities for risk management professionals. Visit Website
- Risk and Insurance Management Society (RIMS): Provides resources, events, and educational programs for risk management professionals, including CROs. Visit Website
Note: Please ensure to verify the relevance and credibility of each resource before citing or relying on them for information.