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Reputability LLP are pioneers and leaders globally in the field of reputational risk and its root causes, behavioural risk and organisational risk. We help business leaders to find these widespread but hidden risks that regularly cause reputational disasters. We also teach leaders and risk teams about these risks. Here are our thoughts, and the thoughts of our guest bloggers, on some recent stories which have captured our attention. We are always interested to know what you think too.

Monday, 3 October 2011

Chief Risk Officer becomes CEO

Congratulations to Amer Ahmed, the Chief Risk Officer of Allianz Re, the reinsurer, now appointed Chief Executive of his company.

This may be a better outcome than for RBS, the bank that lost CRO Nathan Bostock to a competitor. But promoting a CRO to CEO is not without risks.

It's not just a question of the incentives working on an ambitious CRO.  There is the question whether the new CRO can ever be in effective control of risks emanating from a predecessor so respected as to become CEO.

And there is a fundamental problem similar to but different from that of bank traders having back-office experence.  Jerome Kerviel's compliance team experience helped him to evade Soc Gen's risk controls; and UBS may have had the same problem with Kweku Adoboli.  Its a risky policy to allow risk people to acquire executive control.

The best solution remains persuading CROs that being CRO is a career destination.  Barclays Bank  seem to be having some success with Robert Le Blanc at a cost that is modest at least in in banking terms.

Anthony Fitzsimmons

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