In the crisis of 2008, many financial companies struggled to cope with the messes they faced. Looking to outside consultants for help, they slowly got back on their feet, and many realized the need for a chief risk officer.
"Ten percent of Fortune 500 companies now have a chief risk officer, double from what it was less than a decade ago," says Carey. Rather than allowing executives to gamble when making business decisions, a CRO analyzes the risks and determines if the moves are advisable. CROs also help manage the consequences of a risk gone awry, as well as ensure that business decisions adhere to new and stricter regulations.
Reporting directly to the CEO, the chief risk officer has great clout in the decision-making process of the company. According to Carey, CROs used to report to CFOs. But as the economic downdraft worsened, they were given more power, giving the title even more value within the C-Suite.
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