Should the CCO Be Risk Management Czar?

Should the CCO Be Risk Management Czar?

Donna Boehme – Agenda-A Financial Times service – November 21, 2011

czar

In matters of risk, compliance and governance, I’ve always believed in single-point accountability — the principle that no matter how many people and disciplines are needed to develop, support and implement a solution to a problem, a single function needs to be identified as the “owner” of that endeavor. As in, the buck stops here.

Nothing demonstrates this principle as vividly as risk management, which in the wake of the global financial meltdown and the BP Deepwater Horizon disaster is getting well-deserved attention from boards, management and even ratings agencies. Risk is an area that requires the touch of many parts of the organization — finance, audit, security, legal, IT, HR and compliance, for starters. And recently, more and more companies seem to be tapping their chief compliance officers to take on the job of overall risk management on top of their compliance, ethics and governance duties. That approach should be handled with caution.

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