Chief Risk Officer: Watchdog or ...?

by Robert N. Charette

I would like to follow up on a story mentioned in my previous Advisor ("Who Watches for the Watchers When the Watchers Don't Watch?" 12 January 2012). Last week, there were more US congressional hearings into last October's bankruptcy of trading firm MF Global, the eighth-largest such bankruptcy ever in the US. This time the hearings focused on the role played by enterprise risk management (or lack thereof) and especially on the role of the company's chief risk officer (CRO). The testimony presented was not pretty.