The Chief Risk Officer (CRO) is an executive position responsible for identifying, assessing, and mitigating risks to a company. The job can vary depending on the company’s risk management approach, and the CRO may also be responsible for IT policies, security, fraud detection, and compliance. CROs typically have a background in risk management, insurance, or finance and are paid salaries commensurate with their executive status.
The Chief Risk Officer (CRO) position is an executive job that appears in more companies. He or she sits on the company’s executive board at the same level as the chief financial officer, chief accounting officer, chief information officer, chief marketing officer, and chief operating officer. The CRO’s main job is to identify, assess and mitigate risks to the company. The job can be different depending on the type of company that employs the chief risk officer and whether the company faces financial, strategic, equity, liability or reputational risks.
The nature of the CRO’s job is also determined by how a company manages its risks. If a company decides to purchase insurance to mitigate its risks, the chief risk officer’s duties may simply be to buy the best insurance policies and manage relationships with all of the company’s insurance carriers and brokers. On the other hand, if a company applies enterprise risk management principles, a chief risk officer may be required to identify emerging risks, measure current risks, and develop loss prevention and control measures.
The CRO department may also be responsible for information technology policies and risks, corporate security and investigations, fraud detection and investigation, and internal audit. In certain industries and individual companies, this executive may also manage compliance with internal and external regulations and contracts.
Typically, this executive reaches the executive level after at least a decade of experience in risk management, insurance, actuarial studies, or insurance brokerage. A CRO might have a non-business educational background, such as a bachelor’s degree in liberal arts, but could earn risk management certifications and degrees through post-university training and study. To learn the finance skills necessary for the chief risk officer position, the CRO may also have earned an MBA or other finance-related higher education. A successful risk management executive may also have superior skills in communicating with the CEO and board members, along with peers and subordinates.
Because CROs are members of a company’s executive suite, they are paid salaries commensurate with that status. Chief risk officer salaries, however, vary widely depending on the industry and country they work in and each company’s compensation structure. Their compensation packages can include high salary and performance bonuses, stock options, health care benefits and retirement packages.
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