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.
- This blog carries a series of posts and articles, mostly written by Anthony Fitzsimmons under the aegis of Reputability LLP, a business that is no longer trading as such. Anthony is a thought leader in reputational risk and its root causes, behavioural, organisational and leadership risk. His book 'Rethinking Reputational Risk' was widely acclaimed. Led by Anthony, Reputability helped business leaders to find, understand and deal with these widespread but hidden risks that regularly cause reputational disasters. You can contact Anthony via anthony.fitzsimmons At cranfield dot ac dot uk