Chief Risk Officers attaining senior level positions

More and more banking institutions are appointing chief risk officers (CROs) to the senior level, reports Lloyd’s of London.
“The post-Enron era brought heightened focus on the role and responsibility of corporate boards and their members,” a Lloyd’s report says. “This year the subprime crisis in the United States has only served to emphasise that, and the beneficiaries have been risk officers.”
Lloyd’s goes on to list a string of prominent financial institutions, including JPMorgan Chase, Citigroup and Merrill Lynch, as the latest to appoint senior-level CROs.
JPMorgan Chase hired Barry Zubrow to oversee all risk management for the company. He works closely with senior risk managers and business heads around the firm and advises the senior leadership team on risk strategy and policy, Lloyd’s noted.
“The appointment was made because the chief risk officer function was a critical role for our company,” JPMorgan Chase CEO Jamie Dimon told Lloyd’s.
Susan Witcraft, enterprise risk management (ERM) expert at Guy Carpenter & Company LLC, has stressed the need for CROs at the senior level of organizations in order for an ERM program to be taken seriously and effective.
“If the CRO is too far down the ladder in the organization, the position loses credibility with the other parts of the organization and it becomes ineffective,” Witcraft said at a Toronto seminar earlier this year, adding that a CRO should report to the top of its organization.