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Source : http://www.icaew.com
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last activity : 07 06 2010 20:18:04 +0000
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Chief risk officers (CROs) are increasing in an organization as companies seek to address a growing range of business threats and increased regulatory pressures, according to a survey and report from the Economist Intelligence Unit.
According to a research report, 45% of companies have already appointed a CRO or equivalent, although the majority of them are concentrated in the financial services sector. However, the role is set to become more commonplace in other industries, with 24% of all firms planning to appoint a CRO in the next two years.
The main priority for CROs is to ensure that the organisation is in full compliance with regulations. Their success or failure in addressing this task will be crucial:
Survey respondents identified regulatory risk as one of the top two threats to global business, along with reputational risk. Monitoring emerging risks and extending risk principles into wider strategy are two other tasks that risk managers say will assume greater importance over the next three years.
The current stats indicates that top risk managers now play a central role in co-ordinating their firm's response to an unprecedented range of threats. The main benefit of appointing a CRO, according to 52% of executives, is that they can expand risk management to address more risks.
They also enable the business to make better investment decisions, in particular by bringing a more effective approach to measuring and comparing risk and reward.
Sixty one percent of people believe that the ability to understand broad business issues is a critical skill for an effective risk manager, compared with only 37% who cite technical risk skills and 31% who cite a strong background in finance as key attributes for a CRO.
To be effective, top risk managers also need to overcome a number of obstacles. Also, integrating risk data from multiple systems and processes is the greatest challenge facing CROs in financial services companies.
And nowadays even non financial firms are more concerned about managing risk across globally dispersed operations.So, the demand for CRO will increase further
According to a research report, 45% of companies have already appointed a CRO or equivalent, although the majority of them are concentrated in the financial services sector. However, the role is set to become more commonplace in other industries, with 24% of all firms planning to appoint a CRO in the next two years.
The main priority for CROs is to ensure that the organisation is in full compliance with regulations. Their success or failure in addressing this task will be crucial:
Survey respondents identified regulatory risk as one of the top two threats to global business, along with reputational risk. Monitoring emerging risks and extending risk principles into wider strategy are two other tasks that risk managers say will assume greater importance over the next three years.
The current stats indicates that top risk managers now play a central role in co-ordinating their firm's response to an unprecedented range of threats. The main benefit of appointing a CRO, according to 52% of executives, is that they can expand risk management to address more risks.
They also enable the business to make better investment decisions, in particular by bringing a more effective approach to measuring and comparing risk and reward.
Sixty one percent of people believe that the ability to understand broad business issues is a critical skill for an effective risk manager, compared with only 37% who cite technical risk skills and 31% who cite a strong background in finance as key attributes for a CRO.
To be effective, top risk managers also need to overcome a number of obstacles. Also, integrating risk data from multiple systems and processes is the greatest challenge facing CROs in financial services companies.
And nowadays even non financial firms are more concerned about managing risk across globally dispersed operations.So, the demand for CRO will increase further
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