CRO – Is it time to transition towards ‘Chief Responsibility Officer’?

The typical Chief Risk Officer’s inbox is pretty full these days. Gone are the days of simply overseeing the implementation of a risk management framework and helping the board to manage within risk appetite.

In order to add value at the executive table, CROs need to be playing attack (how do we harness opportunities?) as well as defence (how do we mitigate threats?). Riding the wave of industry disruptors implies bringing together a number of strands and pressures on the modern enterprise: operational resilience, sustainability, ethics and brand value are all live topics.

As the organisation’s net worth becomes more and more focused on intangible assets, CRO’s need to focus their team’s efforts on the most essential element of any organisation, its reputation and ‘licence to operate.’ In a world of round-the-clock newsfeeds, social media, fake news and ESG (environmental/social/governance) indices, organisations need to focus increasingly on their reputation. What brings all this together and how can this be best articulated?

Resilience and sustainability boil down to focusing on the longer-term ‘purpose’ of an organisation and its ability to maintain and enhance its capability to continue to deliver this purpose in the light of an increasingly VUCA (volatile, uncertain, complex and ambiguous) environment. There is no lack of emerging issues: cyber attacks, geopolitical uncertainty, and climate change to name but a few.

Perhaps this will see a shift – the ‘Chief RiskOfficer’ becoming ‘Chief ResponsibilityOfficer’ as the role matures away from managing downside risk and regulatory expectations towards supporting the boardroom in building a sustainable business model.

How does a CRO manage such a transition? The Lloyd’s Market Association (LMA) KornFerry Institute paper, ‘Insurance Chief Risk Officers-Develop the competencies that will set you apart,’ which I co-authored with Amelia Stubbs, provides some pointers. The CROs of the future need to nurture four key competencies:

-       Managing ambiguity– being able to accept the lack of clarity and working to weigh up risk and reward

-       Managing conflict– being able to facilitate those difficult conversations that lead to breakthroughs 

-       Cultivating innovation– recognising when the organisation needs to step outside its comfort zone because the risks of remaining static exceed the risks of change

-       Situation adaptability– being able to read the cues and picking the right moment when the organisation is ready for the message and taking the next step

The world is changing rapidly. Now is the time for CROs to change, too.https://www.lmalloyds.com/LMA/Finance/Chief_Risk_Officers__Committee/LMA/Finance/Chief_Risk_Officers_Committee.aspx

#CRO #Innovation #Sustainability #Responsibility #ESG #Uncertainty #ERM #Resilience