Governance of Risk: CRO Role
Governance of Risk: Chief Risk Officer
There is an increasing requirement for a Chief Risk Officer, especially in financial businesses. The reports issued by the OECD, the Walker Review, FRC on the Combined Code, MEDEF and NYSE all call for a more formalised risk role accountable directly to the Board.
To structure the company so that a Chief Risk Officer role is fully defined and accountable only to the Board is worth the initial inconvenience in order to gain regulatory comfort and enable Boards to still innovate.
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“…the ability of the regulator to stand back and leave space for significant new initiative and enterprise will necessarily depend on a positive supervisory assessment as to the quality and capability of a Board, in discharging its essential obligation in relation to risk.”
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In part this will be achieved through a soundly structured Board Risk Committee with effective terms of reference and solid membership. The Board Risk Committee should be served directly by a Chief Risk Officer.
Requirements for the Chief Risk Officer 
- Participation in risk management at the highest level
- Participation in the oversight process at the highest level
- Independence from individual business units
- Direct access to the chairman of the Risk Committee
- Removal from office requires Board approval
- Remuneration approved by the chairman or chairman of the Risk committee
Role
- Commissioning effective analysis
- Effective distillation of key issues in a thematic way
- Delivery of key issues to the Risk Committee
CTP Global provides strategic input for CROs new to the role to enable them to provide more effective input to the Risk Committee.
Contact CTP Global now to discuss your Board support requirements...
CTP Global – Good Governance: Great Performance
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