WORKING PAPERS
The working papers are intended to convey the preliminary results of our ongoing research. The research described in these papers is preliminary and has not gone through the usual review process for Institute publications. The views expressed in these papers are those of the authors and do not necessarily reflect the views of the individual members of the Institute’s Board or Advisory Committee. We welcome feedback from readers and encourage you to convey your comments and criticisms directly to the authors.
ROLE OF THE CHIEF RISK OFFICER
Article Summary
The Chief Risk Officer (CRO) is rapidly becoming one of the most crucial members of the management team. A rising number of CROs and numerous regulatory risks associated with global business reflect just how important the position has become for companies. Information technology issues are very challenging for risk managers and vastly increase the breadth of their responsibilities.
One area of concern for companies is the increasing intricacy of global business where risk tolerance can vary greatly. A business unit may find a risk acceptable; however, the company as a whole may not. CROs need to balance risks and inventory decisions to obtain an optimum level for stakeholders. They should be cautious when using their expertise in risk management to avoid being estranged from other managers. Their goal should be to communicate, coordinate and administer policy for risks, but the final responsibility should be the job of managers and employees.
In the future, priorities for risk management will remain steady in regard to regulatory compliance; however, some believe the importance of communication to the board of directors will be less demanding later. New product development and the risks associated with this type of business are expected to become increasingly important. The continuing use of global markets for these products will create the need for more strategic roles for CROs in the near future.
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Pros and Cons of Separating CEO and Chairman Roles
Article Summary
In the wake of the financial crisis, calls to separate the Chairman of the Board and CEO roles in corporations have become common. Most recently, Jamie Dimon of JPMorgan Chase successfully fended off a challenge of his dual role from public employee unions and the New York City Comptroller. The shareholders of JPMorgan Chase voted overwhelmingly to retain the unified structure, with analysts pointing to declining profits at companies such as the Walt Disney Company in the years following separation of the roles as a motivating factor.
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Beyond GRC
Article Summary
What is becoming clear is regardless of your business the expectation to understand data and develop a governance model for data is increasingly apparent. Attempting to tackle this effort alone in isolated silos would be self-defeating. The best course of action is to begin to socialize the need for data management with key stakeholders in your firm. Agreeing on a common set of definitions and taxonomy helps create a framework for defining important data and understanding where the gaps exist.
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The Indispensable Multipurpose GRC Tool – Are You Leveraging Yours To The Fullest?
Article Summary
Enterprise governance, risk, and compliance (GRC) tools have become indispensable to organizations. Maybe you acquired your GRC tool for one initiative such as Sarbanes-Oxley (SOX) or International Standard for Organization (ISO) compliance management.
But they can do so much more. The value is not limited to one function. Don’t underestimate your investment. GRC tools have the ability to handle multiple missions in one integrated platform.
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Corporate Governance: Passing Fashion Or Here To Stay?
Article Summary
Corporate governance is very much on the minds of legislators, regulators and corporate senior management in Europe and beyond.
Regulators increasingly see governance as a key protector of financial stability and value. It can also be seen as a component of trustworthiness and reputation for nations competing in ever changing and unstable situations.
But what exactly is the so-called corporate governance problem?
Do we genuinely wish to learn from our previous mistakes?
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