Today’s business environment gets more complicated every day. Companies hire a chief risk officer (CRO) to overcome those risks.
Moreover, the business environment is changing quickly. As a result, stronger risk management function is required. A chief risk officer (CRO) is responsible for risk-related activities in an organization. In this article, we’ll get to know more about what a CRO is.
What is A Chief Risk Officer (CRO)?
This title is a corporate executive position. In other terms, a C-suite executive. Companies hire CROs to identify and analyze potential risks. These risks could threaten a company. Furthermore, these risks could be internal or external. After analyzing the risks, the CRO mitigates those.
The government enforces regulations that protect investors from inaccurate corporate disclosures. Some of these laws are the Sarbanes-Oakley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. CROs make sure that the company complies with those laws.
Moreover, these executives review different factors that could severely affect investments or the company’s business units.
Another name for the chief risk officer (CRO) is Chief Risk Management Officer. Aspiring CROs are required to have years of experience in any of the following:
- Actuarial backgrounds
Responsibilities of A CRO
These executives design relevant strategies to handle and mitigate risks. They should have a plan for managing the risks. They must consider in their plan the changing environment of the business. At times, planning involves modifying the business policies and procedures. CROs modify those to address weaknesses.
CROs look for a variety of risks that are mainly divided into three categories:
Moreover, these execs monitor the company’s procedures that might be exposed to risks. For example, CROs make sure that the customer’s data is kept safe and confidential. In the event of a breach, the CRO makes sure that it doesn’t happen again.
Furthermore, the duties of CROs do not end on cyber risks. They also take into account the physical risks. If a company sends employees to somewhat dangerous areas, a CRO must assess and create plans of action in response. For example, if an employee works in an area facing a viral outbreak, the CRO monitors the risks and recommends safety measures.
The responsibilities of CROs differ from one organization to another. But, they all have the same goal. That is managing the risks a company might face. The responsibilities of a chief risk officer (CRO) also include:
- Risk management policies must reflect the organization’s strategies
- Creating and distributing analysis reports to board members and executives of the company
- Making a budget plan for concerned projects and supervising their funding
- Prepare documentation related to risk assessment
- Designating appropriate responses in the event of an incident
Required Education and Experience
An aspiring CRO must have a bachelor’s degree in any of the following:
- Business administration
Furthermore, many employers seek candidates with a Master’s degree in business or public administration. Furthermore, a candidate must have strong experience in risk management. Some companies provide training for qualified professionals to become CRO.
Also, CROs must have two decades of experience in accountancy, law, and economics.
Rate this post: