What are the roles and responsibilities of the Chief Risk Officer (CRO)?
The CRO is the most senior person responsible for managing risk across the entire bank. According to the Basel Committee, the CRO must be an independent senior executive with distinct responsibility for the risk management function across the entire organization. The CRO cannot also be the CFO, COO, or Head of Internal Audit.
Core Responsibilities of a CRO
• Oversees the development and implementation of the bank’s risk management functions.
• Supports the Board and BRMC in developing the bank’s risk appetite and translating it into a risk limits structure.
• Actively engages with management in setting risk appetite and limits for various business lines in line with the bank’s overall strategic planning.
• Contributes and participates in key decision-making processes — strategic planning, capital and liquidity planning, new products and services, compensation design, and operations.
• Manages the implementation of all aspects of the risk function, including processes, tools, and systems to identify, measure, manage, monitor, and report risks.
• Monitors major and critical risk issues independently with full empowerment.
• Communicates views of the Board and senior management throughout the bank.
• Provides opinion regarding the extent of risk in case of credit proposals for large amounts before submission to EC/Board for sanctioning.
• Monitors portfolio health and ensures good quality asset growth.
• Ensures proper compliance of BB’s recommendations regarding risk issues, including all core risks.
• Disseminates information and strategies to personnel regarding emerging risk issues and industry-specific risks.
• Implements environmental and social (E&S) safeguards for the asset portfolio.
• Oversees the information security aspects for the bank.
• Ensures the arrangement of ERMC meetings monthly.
• Ensures proper disclosure of key performance indicators via Pillar III of Basel III.
• Organizes Annual Risk Conference (at least one day-long) with participation of all branch managers and deputy branch managers.
• Ensures adequate internal and external training on risk management issues for RMD officials.
The CRO must have direct access to the Board of Directors at all times. The Board and CEO/MD must provide full support to the CRO.
