Empowering Leadership for Tomorrow's Challenges

The modern CRO is not just a risk manager but a strategic leader who champions organizational resilience. As Richard Treagus, CRO of Old Mutual Limited, emphasizes, resilience has become the guiding principle for CRO offices and leadership teams. By embedding resilience into the core of their institutions, CROs ensure that their organizations are prepared to face any disruptions head-on.

Defining the Vision for Risk and Resilience

In the face of expanding potential risks, employees in financial institutions need a clear North Star. This guiding principle encompasses the organization’s long-term vision, mission, and objectives related to risk and resilience. Effective CROs tirelessly pursue this vision, ensuring that every decision aligns with the organization’s overarching goals.

To develop this North Star, CROs must think beyond regulatory compliance and safeguarding the bank. While these remain crucial, they are no longer sufficient as the sole focus of the risk function. A veteran CRO explained that aligning values with management, shareholders, and communities provides greater understanding and a margin for error. Stakeholders will give latitude during difficult times if they see alignment in values.

Building a Future-Ready Team

The demands of managing in today’s increasingly complex risk environment require CROs to build a diverse and resilient team. Successful CROs create the next generation of leaders by fostering diversity of thought, empowering their teams, and planning for leadership development from the outset.

Diversity of thinking is critical. Combining different backgrounds, experiences, and skill sets enhances the team’s ability to tackle complex issues. Many CROs intentionally rotate workers within and between departments to gain broader perspectives. Investing time in the team—spending up to 34 percent of their time with members—allows CROs to understand strengths and weaknesses, identify natural leaders, and provide continuous feedback.

Engaging Deeply with the Executive Team and Board

Today’s leading CROs are vital members of the executive team and trusted advisers to the board. They build deeper relationships that keep risk and resilience aligned with the organization’s overall mission. Communication is key; CROs engage in ongoing dialogues that make hard discussions easier and fortify the principle of “no surprises.”

Successful CROs spend up to 56 percent of their time with the executive team and board, engaging in both formal and informal discussions. They adapt the language of risk to business-focused terms, ensuring that everyone understands the implications. Conversations extend beyond risk, covering a wide range of issues that demonstrate the CRO’s strong interest in business development.

Collaborating with Supervisors and Regulators

CROs should establish constructive relationships with supervisors and regulators, treating them as partners rather than adversaries. Understanding the priorities and motivations of supervisors fosters collaboration and trust. Transparency and proactivity in discussing both positive and negative developments are essential.

Some CROs emphasize their ability to influence rule-making and policy when relationships are strong. Trust enables supervisors to rely on CROs for guidance, recognizing their proximity to the communities they aim to protect. Regular meetings and open communication ensure that nothing comes as a shock, making it easier to address challenges collaboratively.

Focusing on Unique Contributions

Successful CROs leverage three unique levers to help their institutions succeed: visibility across the entire organization, a long-term vision, and resource management. Their distinctive vantage point allows them to anticipate cross-cutting issues and prepare for future crises. Building capabilities based on lessons learned from past disruptions ensures readiness for unknown challenges.

CROs balance short-term pressures with medium- and long-term impacts, reminding leaders of the importance of sustainable decisions. Managing resources judiciously, reallocating when necessary, and focusing on major complex issues allow CROs to maintain balance and readiness. This holistic approach enables them to “see around the corner” and make tough decisions.

Maintaining Personal Effectiveness and Balance

Reflecting on personal effectiveness is crucial for successful CROs. They manage their time deliberately, set goals, and prioritize tasks to maintain poise. Recognizing the marathon nature of the role, they seek input from family, friends, and industry peers to stay grounded and up to date.

Many CROs have a “circle of trust” that provides honest feedback, helping them gauge overall effectiveness. Time for strategic thinking, attending conferences, and participating in think tanks is essential. Delegating responsibilities and managing time effectively ensure that CROs can focus on preparing for potential risks while maintaining work-life balance.