The post-Enron era brought heightened focus on the role and responsibility of corporate boards and their members. This year the sub-prime crisis in the US has only served to emphasise that, and the beneficiaries have been risk officers.
Last year Lloyd’s released ‘Taking risk on board – how global business leaders view risk’, a report that explored the extent to which risk is now a board-level responsibility, what boards see as their risk-related priorities, and what they do and don't do to implement effective risk management strategies throughout their organisations.
It has not gone unnoticed by boards of directors as JPMorgan Chase recently became the latest in a long line of banks to appoint a Chief Risk Officer (CRO). Barry Zubrow was hired to oversee all risk management for the company – working closely with senior risk managers and business heads around the firm, and advising the senior leadership team on risk strategy and policy.
Zubrow joins JPMorgan Chase from the private investment management firm ITB and has also been serving as a senior advisor to New Jersey Governor Jon Corzine on a broad range of fiscal and policy matters.
JP Morgan Chief Executive Jamie Dimon said the appointment was made because the Chief Risk Officer function was “a critical role for our company”.
Last month, Citigroup named company veteran Jorge Bermudez as its CRO and formed a new risk management advisory committee. The shake-up came in the same week that the bank said it would likely write down the value of subprime mortgages and related assets by as much as $11bn in the fourth quarter.
Merrill Lynch, which announced write downs of $8.4bn in October, named Ed Moriarty to the new role of CRO in September. At the same time Lehman Brothers named Chief Financial Officer, Chris O’Meara, as its global head of risk management, beginning this month.
Also GMAC Financial Services has named Samuel Ramsey as CRO, barely a month after the finance company posted a $1.6bn third-quarter loss because of problems in its mortgage unit.
