What does a Chief Risk Officer do?

The chief risk officer (CRO) position is an executive job that is appearing at more companies. He or she sits on the company executive board at the same level as the chief financial officer, chief accounting officer, chief information officer, chief marketing officer and the chief operating officer. The primary job of the CRO is to identify, assess and mitigate risks to the company. The job can be different depending on what type of company is employs the chief risk officer and whether the company faces financial, strategic, property, liability or reputational risks.

The nature of the CRO's job is also determined by how a company manages its risks. If a company decides to buy insurance to mitigate its risks, then the chief risk officer duties could simply be to shop for the best insurance policies and manage relationships with all of the company's insurance carriers and insurance brokers. On the other hand, if a company applies enterprise risk management principles, a chief risk officer could be required to identity emerging risks, measure current risks and develop loss control and loss prevention measures.

The CRO's department might also be responsible for information technology policies and risks, corporate security and investigations, fraud detection and investigations, and internal auditing. In certain sectors and individual companies, this officer could also manage compliance with internal and external regulations and contracts.

Typically, this officer rises to the executive level after at least a decade of experience in risk management, insurance, actuarial studies or insurance brokering. A CRO might have a non-business educational background, such as a liberal arts bachelor's degree, but they could have earned risk management certifications and degrees through post-university training and study. To learn the financial skills needed for the chief risk officer job, the CRO might also have earned an M.B.A. or other financial-related higher degree. A successful risk management executive could also have superior skills in communicating with the chief executive officer and board members along with peers and subordinates.

Since CROs are members of a company's executive suite, they earn salaries commensurate with that status. Salaries for chief risk officers, however, vary widely, depending on the industry and country in which they work and the individual company's compensation structure. Their compensation packages can include high salaries and performance bonuses, stock options, healthcare benefits, and retirement packages.