The role of Chief Risk Officers (CROs) has changed drastically over the course of the last several years. What was once a job that was chiefly concerned with managing risk has expanded to include strategic leadership and innovation. CROs originated with insurance industry executives who specialized in risk, but are becoming increasingly common in financial services and can now even be found in other industries.
The CRO is tasked with evaluating and navigating risk: credit, operational, and market. In the aftermath of the 2008 financial crisis, CROs in the financial sector began to emphasize compliance and therefore reputational risk as well. In financial services, and especially banking, CROs report directly to the CEO and the Board, an indication of how the role has truly become a C-level position. The Fed’s adoption of Regulation YY has likewise risen the profile of the CRO role, as foreign banks are now required to have a US CRO as well as a US risk committee.
At present, CROs are not often found outside of insurance, finance, and banking. However, they are becoming more common in regulated industries, such as telecommunications and utilities. Instead of simply playing the role of wet blanket, the new CRO is an active participant in shaping the future of the company. Because of the stricter regulatory climate, CROs are increasingly key players in the banking industry.
Helane L. Morrison is an example of this new role for CROs. Since the early 2000s, when the CRO concept began to take shape, holders of the job have come from a variety of backgrounds. Former regulators are often tapped to be CROs, and Morrison joined San Francisco-based Hall Capital Partners after a long tenure at the SEC, where she rose to the position of regional director. At Hall Capital Partners, the position is called “Chief Compliance Officer,” an example of how compliance has become an ever more important aspect of a CRO’s scope.
A graduate of UC Berkeley Law School, Morrison began her career as a Supreme Court law clerk. She later moved on to practicing securities law at a major San Francisco law firm, rising to partner. She joined the SEC in 1996, where she began as head of enforcement for the agency.