The chief risk officer (CRO) position is an executive position that is becoming more prevalent in businesses. He or she is on the same level as the chief financial officer, chief accounting officer, chief information officer, chief marketing officer, and chief operating officer on the company executive board. The CRO’s main responsibility is to identify, assess, and mitigate the company’s risks. Depending on the type of company that employs the chief risk officer and whether the company faces financial, strategic, property, liability, or reputational risks, the job can be very different.
The nature of the CRO’s job is also influenced by a company’s risk management strategy. If a company decides to purchase insurance to mitigate risk, the chief risk officer’s responsibilities may be limited to shopping for the best insurance policies and managing relationships with all of the company’s insurance carriers and brokers. A chief risk officer, on the other hand, may be required if a company uses enterprise risk management principles to identify emerging risks, measure current risks, and develop loss control and loss prevention measures.
Information technology policies and risks, corporate security and investigations, fraud detection and investigations, and internal auditing may all fall under the purview of the CRO’s department. This officer may also be responsible for ensuring that internal and external regulations and contracts are followed in certain industries and companies.
After at least a decade of experience in risk management, insurance, actuarial studies, or insurance brokering, this officer typically rises to the executive level. A CRO may have a liberal arts bachelor’s degree as their educational background, but they may have earned risk management certifications and degrees through post-university training and study. The CRO may have earned an M.B.A. or other financial-related higher degree to learn the financial skills required for the chief risk officer job. A successful risk management executive may also have superior communication skills with the CEO and board of directors, as well as peers and subordinates.
CROs earn salaries commensurate with their status as members of a company’s executive suite. Chief risk officers’ salaries, on the other hand, vary widely depending on the industry and country in which they work, as well as the compensation structure of the individual company. High salaries and performance bonuses, stock options, healthcare benefits, and retirement packages are all possible components of their compensation packages.