CROs Dish on Their Jobs
June 25, 2015 7:00 AM
Enterprise risk management is an area banks are trying to master, and the appointment of a chief risk officer to oversee this effort has become common, even among community banks. We asked CROs and other experts for their perspectives on this evolving role, the skills needed to do the job well and their biggest worries.
P.W. "Bill" Parker
Vice chairman and chief risk officer
U.S. Bancorp, Minneapolis
$405 billion of assets
The skill CROs need most:
"The fundamental skill is being able to influence others. It's one thing to get people who work for you to do what you want them to do. In this role, I'm engaged with people who don't work for me, and I need to ensure they understand the risks and execute accordingly."
Edward Schreiber
Chief risk officer
Zions Bancorp., Salt Lake City
$58 billion of assets
Reality check:
"Typically, most CROs have the capacity to veto or object to something that a business line would like to do. That's what's new to this whole world in getting people adjusted to the fact that risk management is independent and has the capacity to alter or stop things that the business line would like to do."
Nancy Foster
Chief risk officer
Park Sterling Corp.
Charlotte, N.C.
$2.4 billion of assets
Why banks of all sizes consider compliance risk a priority:
There's basically been a zero tolerance for error with the regulators and nothing is ever perfect. Never. That keeps you up at night. One minor error can stop you in your tracks if the regulators decide to make an issue out of something."
Susan Krause Bell
Managing director
Promontory Financial Group
Defining success:
"The CRO and his or her troops really have a hard job. It can be thankless. It's not clear when the risk management department has had a big success. It's clear when the business side has had a big success, because there is added revenue. But a success for the CRO might involve stopping a line of revenue, or creating a cost burden to revenue."
Stephen Phillips
Chief credit and risk officer
First United Bank, Durant, Okla.
$3 billion of assets
First United Bank, Durant, Okla.
$3 billion of assets
Why enterprise risk managementis a strategic necessity:
"We're in the business of taking risk. It's not about eliminating risk. It's about managing the risk properly."
Helga Houston
Chief risk officer
Huntington Bancshares
Columbus, Ohio
$68 billion of assets
On the increase in board involvement these days:
"A good board is going to have a lot of conversations with the chief risk officer. I talk to the chair of our risk oversight committee or exchange emails with him almost weekly. It's a very different level of engagement."
Diane Murray
Chief risk officer
Empire National Bank
Islandia, N.Y.
$512 million of assets
"We were doing risk assessments before, but appointing a CRO and bringing all of the assessments together helped us to gauge whether there was anything that we were missing. You need that point person to bring everything together."
Rodney Sloan
Chief risk officer
Heartland Financial USA
Dubuque, Iowa
$6.6 billion of assets
The focus for CROs in the wake of the financial crisis:
How do banks position themselves to make sure that we don't have something happen to us again?"
