{"id":5531,"date":"2023-07-18T13:02:22","date_gmt":"2023-07-18T13:02:22","guid":{"rendered":"https:\/\/mysourcefunding.com\/startups\/why-a-strong-chief-risk-officer-feeds-the-top-line\/"},"modified":"2023-07-18T13:02:23","modified_gmt":"2023-07-18T13:02:23","slug":"why-a-strong-chief-risk-officer-feeds-the-top-line","status":"publish","type":"post","link":"https:\/\/mysourcefunding.com\/?p=5531","title":{"rendered":"Why A Strong Chief Risk Officer Feeds The Top Line"},"content":{"rendered":"
\n

Sean Thompson, President & Chief Executive Officer, <\/em>NAVEX<\/em>.<\/em><\/p>\n

As the collapse of Silicon Valley Bank sent shockwaves across the country, one detail jumped out at me: The bank went eight months in 2022 without a chief risk officer.<\/p>\n

Why is that detail so telling? Because risks abound in today\u2019s business landscape. Organizations with chief risk officers can assess those risks more perceptively and manage them more wisely\u2014which means those companies are also able to take on more<\/em> risk safely and reap the ensuing rewards.<\/p>\n

A good analogy here might be the brakes on your car. When you know the brakes are bad, you drive more slowly and take turns more cautiously because you\u2019re not sure how well they\u2019ll work. With good brakes, however, you can go faster and take sharper turns\u2014because you know the brakes are there when you need them.<\/p>\n

<\/fbs-ad><\/p>\n

A strong risk function operates the same way: It allows your enterprise to take more risk because you know you\u2019ll be able to respond to changing conditions with agility. A chief risk officer, who has visibility into risk across the whole organization, is critical for that long-term success.<\/p>\n

The Evolving Roles Of Risk And Compliance Officers<\/h2>\n

Many CEOs might naturally wonder, \u201cIsn\u2019t this what the chief compliance officer does?\u201d Not really\u2014or, more accurately, not any longer.<\/p>\n

Compliance officers are responsible for worrying about compliance risks and maintaining a program to manage those specific risks. The Foreign Corrupt Practices Act is one such example; you need a robust compliance program to reduce the risk that someone in your enterprise is bribing foreign government officials to win business. Privacy compliance, product safety and anti-discrimination policies are other examples of chief compliance officer responsibilities.<\/p>\n

The chief risk officer has a wider remit simply because plenty of business risks today aren\u2019t compliance risks, or they double as compliance risks and<\/em> <\/strong>business risks, where the internal controls to govern those issues are one and the same. Moreover, their job is to manage the risk of noncompliance, which can negatively impact the bottom\u2014and top\u2014line.<\/p>\n

Go back to Silicon Valley Bank. One mistake was that SVB didn\u2019t hedge its interest rate risks as rates rose in 2022. Another was the failure to see that the digital transformation of banking\u2014a perfectly reasonable thing for a bank to do\u2014gave depositors an easier way to withdraw their money quickly, so the value of hedging (to prevent a bank run) became even more important.<\/p>\n

A chief risk officer might have helped SVB understand both of those perils. Neither of them, however, are compliance risks that a CCO would typically address.<\/p>\n

Risk officers are responsible for assuring that the business operates with sound practices for governance, risk and compliance. The CRO should have an enterprise-wide remit, so they can understand the full risk profile of the organization. They should be ready to recommend financial controls to prevent fraud or other malfeasance, IT controls for cybersecurity threats and \u201cpeople controls\u201d that support a culture of integrity.<\/p>\n

Admittedly, the above paragraph does sound a lot like a compliance officer, and the two roles can overlap significantly. At large organizations, the compliance officer might report into the CRO, and some businesses might even consolidate the two into a single \u201cCRCO\u201d role, as we do at my company.<\/p>\n

For CEOs and boards, however, the real question is whether the chief risk officer has the right resources and support to identify all of an organization\u2019s risks and to keep those risks at appropriate levels. That\u2019s the effective braking system that allows your enterprise to act with speed, agility and<\/em> safety.<\/p>\n

Risk\u2019s Partnership With The Board And C-Suite<\/h2>\n

What an effective chief risk and compliance officer brings to the table is this: the execution of risk acceptance, mitigation and management. And because risk exists throughout the enterprise, that means the risk and compliance function must be able to break down silos across the enterprise, find the relevant information about risk and report that information back to senior management so you can refine your objectives and strategy as necessary.<\/p>\n

In other words, a strong CRCO can have a strategic influence on the business because they help you understand all the risks challenging your strategy\u2014and how the company can navigate through those challenges. For example, an empowered risk officer might advise that it\u2019s wise for the company to take added risk and maximize an opportunity to grow at a faster rate than competitors. With a full understanding of the organization\u2019s risk appetite, risk officers can help balance risks with desired returns, all while balancing proper governance and compliance.<\/p>\n

Risk officers do need two things to succeed in the way I\u2019m describing.<\/p>\n

First, the CRO can succeed if they have the right people skills and relationships to put all those data-driven insights about risk to work. An effective risk officer instills a risk-aware culture that starts with the board and C-suite, then permeates the rest of the enterprise.<\/p>\n

Second, it\u2019s important to have the right technology to measure and monitor risk. The good news is that technology is getting better all the time, especially with the advent of machine learning and artificial intelligence. (Disclosure: My company provides risk software.) I suggest risk leaders look for solutions that:<\/p>\n

\u2022 Engage employees and third parties in best practices that address potential risk across the risk spectrum, such as conflict of interest reporting, cybersecurity training, incident reporting and more.<\/p>\n

\u2022 Aggregate risk-related data from across the organization to holistically measure and monitor risk while correlating data points that wouldn\u2019t be obvious when viewed in a silo.<\/p>\n

\u2022 Streamline workflows and organizational processes so the CRO can focus their team on adding strategic value to the business.<\/p>\n

While change management often accompanies new technology, I advise CROs to socialize early on the need for technology, gaining cross-departmental buy-in and perhaps even finding areas for greater collaboration in the process.<\/p>\n

Ultimately, of course, the people accountable for the risks of an enterprise are the board and the CEO. A strong chief risk officer is the best way to assure you don\u2019t overlook those risks\u2014that you understand them and engage with them appropriately. The result is a more agile organization that can accelerate, slow down and turn as conditions change. That\u2019s how you outmaneuver the competition and achieve the outcomes that matter most for your business.<\/p>\n

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?<\/em><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Sean Thompson, President & Chief Executive Officer, NAVEX. As the collapse of Silicon Valley Bank sent shockwaves across the country, one detail jumped out at me: The bank went eight months in 2022 without a chief risk officer. Why is that detail so telling? Because risks abound in today\u2019s business landscape. Organizations with chief risk […]<\/p>\n","protected":false},"author":1,"featured_media":5532,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[77],"tags":[],"class_list":{"0":"post-5531","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-startups"},"yoast_head":"\nWhy A Strong Chief Risk Officer Feeds The Top Line | Brandiary<\/title>\n<meta name=\"description\" content=\"Sean Thompson, President & Chief Executive Officer, NAVEX. As the collapse of Silicon Valley Bank sent shockwaves across the country, one detail\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mysourcefunding.com\/?p=5531\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why A Strong Chief Risk Officer Feeds The Top Line | Brandiary\" \/>\n<meta property=\"og:description\" content=\"Sean Thompson, President & Chief Executive Officer, NAVEX. As the collapse of Silicon Valley Bank sent shockwaves across the country, one detail\" \/>\n<meta property=\"og:url\" content=\"https:\/\/mysourcefunding.com\/?p=5531\" \/>\n<meta property=\"og:site_name\" content=\"Brandiary\" \/>\n<meta property=\"article:published_time\" content=\"2023-07-18T13:02:22+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-18T13:02:23+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/07\/1689685342_0x0.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"News Room\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"News Room\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/mysourcefunding.com\/?p=5531#article\",\"isPartOf\":{\"@id\":\"https:\/\/mysourcefunding.com\/?p=5531\"},\"author\":{\"name\":\"News Room\",\"@id\":\"https:\/\/mysourcefunding.com\/#\/schema\/person\/5062dafb0f932b59aa228f1a047332f4\"},\"headline\":\"Why A Strong Chief Risk Officer Feeds The Top Line\",\"datePublished\":\"2023-07-18T13:02:22+00:00\",\"dateModified\":\"2023-07-18T13:02:23+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/mysourcefunding.com\/?p=5531\"},\"wordCount\":1104,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/mysourcefunding.com\/#organization\"},\"articleSection\":[\"Startups\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/mysourcefunding.com\/?p=5531#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/mysourcefunding.com\/?p=5531\",\"url\":\"https:\/\/mysourcefunding.com\/?p=5531\",\"name\":\"Why A Strong Chief Risk Officer Feeds The Top Line | Brandiary\",\"isPartOf\":{\"@id\":\"https:\/\/mysourcefunding.com\/#website\"},\"datePublished\":\"2023-07-18T13:02:22+00:00\",\"dateModified\":\"2023-07-18T13:02:23+00:00\",\"description\":\"Sean Thompson, President & Chief Executive Officer, NAVEX. As the collapse of Silicon Valley Bank sent shockwaves across the country, one detail\",\"breadcrumb\":{\"@id\":\"https:\/\/mysourcefunding.com\/?p=5531#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/mysourcefunding.com\/?p=5531\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/mysourcefunding.com\/?p=5531#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/mysourcefunding.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Why A Strong Chief Risk Officer Feeds The Top Line\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/mysourcefunding.com\/#website\",\"url\":\"https:\/\/mysourcefunding.com\/\",\"name\":\"Brandiary\",\"description\":\"Latest Business and Startup News and Updates\",\"publisher\":{\"@id\":\"https:\/\/mysourcefunding.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/mysourcefunding.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/mysourcefunding.com\/#organization\",\"name\":\"Brandiary\",\"url\":\"https:\/\/mysourcefunding.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/mysourcefunding.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/06\/b-logo-1.png\",\"contentUrl\":\"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/06\/b-logo-1.png\",\"width\":381,\"height\":100,\"caption\":\"Brandiary\"},\"image\":{\"@id\":\"https:\/\/mysourcefunding.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/mysourcefunding.com\/#\/schema\/person\/5062dafb0f932b59aa228f1a047332f4\",\"name\":\"News Room\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/mysourcefunding.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/06\/avatar_user_1_1688031660-96x96.png\",\"contentUrl\":\"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/06\/avatar_user_1_1688031660-96x96.png\",\"caption\":\"News Room\"},\"sameAs\":[\"https:\/\/mysourcefunding.com\"],\"url\":\"https:\/\/mysourcefunding.com\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Why A Strong Chief Risk Officer Feeds The Top Line | Brandiary","description":"Sean Thompson, President & Chief Executive Officer, NAVEX. As the collapse of Silicon Valley Bank sent shockwaves across the country, one detail","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/mysourcefunding.com\/?p=5531","og_locale":"en_US","og_type":"article","og_title":"Why A Strong Chief Risk Officer Feeds The Top Line | Brandiary","og_description":"Sean Thompson, President & Chief Executive Officer, NAVEX. As the collapse of Silicon Valley Bank sent shockwaves across the country, one detail","og_url":"https:\/\/mysourcefunding.com\/?p=5531","og_site_name":"Brandiary","article_published_time":"2023-07-18T13:02:22+00:00","article_modified_time":"2023-07-18T13:02:23+00:00","og_image":[{"width":1200,"height":800,"url":"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/07\/1689685342_0x0.jpg","type":"image\/jpeg"}],"author":"News Room","twitter_card":"summary_large_image","twitter_misc":{"Written by":"News Room","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/mysourcefunding.com\/?p=5531#article","isPartOf":{"@id":"https:\/\/mysourcefunding.com\/?p=5531"},"author":{"name":"News Room","@id":"https:\/\/mysourcefunding.com\/#\/schema\/person\/5062dafb0f932b59aa228f1a047332f4"},"headline":"Why A Strong Chief Risk Officer Feeds The Top Line","datePublished":"2023-07-18T13:02:22+00:00","dateModified":"2023-07-18T13:02:23+00:00","mainEntityOfPage":{"@id":"https:\/\/mysourcefunding.com\/?p=5531"},"wordCount":1104,"commentCount":0,"publisher":{"@id":"https:\/\/mysourcefunding.com\/#organization"},"articleSection":["Startups"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/mysourcefunding.com\/?p=5531#respond"]}]},{"@type":"WebPage","@id":"https:\/\/mysourcefunding.com\/?p=5531","url":"https:\/\/mysourcefunding.com\/?p=5531","name":"Why A Strong Chief Risk Officer Feeds The Top Line | Brandiary","isPartOf":{"@id":"https:\/\/mysourcefunding.com\/#website"},"datePublished":"2023-07-18T13:02:22+00:00","dateModified":"2023-07-18T13:02:23+00:00","description":"Sean Thompson, President & Chief Executive Officer, NAVEX. As the collapse of Silicon Valley Bank sent shockwaves across the country, one detail","breadcrumb":{"@id":"https:\/\/mysourcefunding.com\/?p=5531#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/mysourcefunding.com\/?p=5531"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/mysourcefunding.com\/?p=5531#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/mysourcefunding.com\/"},{"@type":"ListItem","position":2,"name":"Why A Strong Chief Risk Officer Feeds The Top Line"}]},{"@type":"WebSite","@id":"https:\/\/mysourcefunding.com\/#website","url":"https:\/\/mysourcefunding.com\/","name":"Brandiary","description":"Latest Business and Startup News and Updates","publisher":{"@id":"https:\/\/mysourcefunding.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/mysourcefunding.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/mysourcefunding.com\/#organization","name":"Brandiary","url":"https:\/\/mysourcefunding.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/mysourcefunding.com\/#\/schema\/logo\/image\/","url":"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/06\/b-logo-1.png","contentUrl":"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/06\/b-logo-1.png","width":381,"height":100,"caption":"Brandiary"},"image":{"@id":"https:\/\/mysourcefunding.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/mysourcefunding.com\/#\/schema\/person\/5062dafb0f932b59aa228f1a047332f4","name":"News Room","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/mysourcefunding.com\/#\/schema\/person\/image\/","url":"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/06\/avatar_user_1_1688031660-96x96.png","contentUrl":"https:\/\/mysourcefunding.com\/wp-content\/uploads\/2023\/06\/avatar_user_1_1688031660-96x96.png","caption":"News Room"},"sameAs":["https:\/\/mysourcefunding.com"],"url":"https:\/\/mysourcefunding.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=\/wp\/v2\/posts\/5531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=5531"}],"version-history":[{"count":1,"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=\/wp\/v2\/posts\/5531\/revisions"}],"predecessor-version":[{"id":5533,"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=\/wp\/v2\/posts\/5531\/revisions\/5533"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=\/wp\/v2\/media\/5532"}],"wp:attachment":[{"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mysourcefunding.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}