Today’s business owners know the importance of identifying, analyzing and addressing internal and external risks that may threaten profitability. The Chief Risk Officer (CRO) is responsible for creating strategies that will help mitigate these risks and build capital. A CRO is also known as a Chief Risk Management Officer or Risk Management Officer. Other executives, such as the Chief Technology Officer, Chief Financial Officer and Chief Marketing Officer may work alongside the CRO and possibly help perform certain CRO duties.
While most of today’s CROs are employed in the healthcare and banking industries, those seeking a position as a CRO may also consider the technology sector. With the rise of large tech firms over the past few years, it is expected that there will be a growing demand for CROs in that particular field. According to the U.S. Bureau of Labor Statistics, top executives are expected to see a 5% job growth by 2020.
The CRO plays a crucial role in a company’s strategy by participating in decision-making and policy implementation to mitigate company risk. A central responsibility of the CRO is to ensure that business strategies align with risk management expectations of company regulators, shareholders, elected officials and attorneys general.
In addition, the CRO has the responsibility of establishing and maintaining a risk-aware company culture. This includes overseeing the business’ risk assessment, familiarizing employees and shareholders with the Enterprise Risk Management (ERM) program, implementing a risk management framework, managing the operational risks of the framework and developing strategies to lessen risks within the company’s business strategy. The CRO works across such corporate areas as internal auditing, insurance, investigations, information technology, fraud and government compliance.
The duties of the CRO may be too numerous and complex to be carried out by a single person in large organizations. In this situation, they may work with other company risk managers. The CRO also works with employees throughout the organization in senior management, finance, legal and human resources.
According to the U.S. Bureau of Labor Statistics (BLS), the median pay for corporate top executives was $101,250 in 2010. A bachelor’s degree is required. Most Chief Risk Officers have advanced degrees and a minimum of 10 years experience in a corporate role. For example, a Master’s of Business Administration (MBA) with a focus in economics or accounting would be appropriate to qualify for top jobs in this field.
A CRO should have the ability to be a strong leader, use modeling tools and gather and analyze large quantities of information. Communication skills are also crucial, as effective communication is important to lead employees and to convey ideas and results to other corporate executives. Most importantly, a CRO should have a thorough understanding of all aspects of the business, be able to maintain strong professional relationships and effectively lead a team to project completion.