In March I wrote that Chief Risk Officers needed skills and intellegence to the level needed by CEOs - but that this would give Boards a challenge: How do you keep the CRO in post for a decent length of time?
The problem is now illustrated by real life. Nathan Bostok became CRO at RBS in March 2009, to sort out RBS' Augean Stables with their $380 billiion or so of toxic assets.
Having learned that Stephen Hester is not planning to leave his RBS CEO post any time soon, Bostok will be off to Lloyds Bank in the New Year, where he will be CEO of Wholsale Banking. More stable cleaning will probably be involved, but the thrust of the new job is apparently to grow the wholesale banking business. Further experience for a CEO job. Well done Mr Bostock; but RBS loses his intimate knowledge of RBS' business after only 3 years in post.
A perpetual game of Musical Chairs - which will cause few losers among good CROs - will be bad for complex institutions. They need CROs of great talent; but they also need continuity of leadership in risk management and risk strategy. Achieving both will be an important challenge for Audit Committee Chairmen.
Channelling CRO ambition will be a part of the solution.
- Reputability are thought leaders in the field of reputational risk and its root causes, behavioural risk and organisational risk. Our book 'Rethinking Reputational Risk' received excellent reviews: see www.rethinkingreputationalrisk.com. Anthony Fitzsimmons, one of its authors, is an authority and accomplished speaker on reputational risks and their drivers. Reputability helps 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.