The survey was conducted as part of the research for The Evolving Role of the CRO, a new report written by the Economist Intelligence Unit and sponsored by ACE Insurance, Cisco Systems, Deutsche Bank and IBM. A total of 137 global risk managers participated in the survey, with approximately half of respondents drawn from the financial services sector and the rest drawn from a cross-section of 16 other industries.
The main priority for CROs is to ensure that the organisation is in full compliance with regulations. Their success or failure in addressing this task will be crucial: survey respondents identified regulatory risk as one of the top two threats to global business, along with reputational risk. Monitoring emerging risks and extending risk principles into wider strategy are two other tasks that risk managers say will assume greater importance over the next three years.
The research indicates that top risk managers now play a central role in co-ordinating their firm's response to an unprecedented range of threats. The main benefit of appointing a CRO, according to 52% of executives in the survey, is that they can expand risk management to address more risks. They also enable the business to make better investment decisions, in particular by bringing a more effective approach to measuring and comparing risk and reward.
Sixty one percent of respondents believe that the ability to understand broad business issues is a critical skill for an effective risk manager, compared with only 37% who cite technical risk skills and 31% who cite a strong background in finance as key attributes for a CRO. To be effective, top risk managers also need to overcome a number of obstacles. The research shows integrating risk data from multiple systems and processes is the greatest challenge facing CROs in financial services companies. By contrast, non-financial firms surveyed for the report are more concerned about managing risk across globally dispersed operations.
"Risk management must evolve to address a diverse range of threats. The CRO will play a pivotal role in bringing a more focused, integrated approach to risk management," says Daniel Franklin, editorial director of the Economist Intelligence Unit.