Chief risk officers (CROs) in UK financial-services firms are increasingly shifting from compliance enforcers to strategic boardroom partners, a report published yesterday (January 27) reveals.
The study, Optimising Growth: The Evolving Role of the Chief Risk Officer, explores how CROs now play a dual role: protecting organisations from threats while enabling growth through calculated risk-taking.
Conducted by researchers at Bayes Business School, part of City, University of London, with support from the Lord Mayor of London, Alderman Alastair King, the report draws on interviews with 31 CROs from UK financial institutions.
It highlights how the role has evolved to meet the demands of an increasingly complex global financial environment.
Historically seen as the “no team” due to their compliance focus, CROs are now recognised for their ability to foster innovation, create value and drive growth.
Key milestones in this transformation include the 2008 global financial crisis and the implementation of the Senior Managers and Certification Regime (SM&CR) in 2016, which reinforced the importance of robust risk management and strategic decision-making.
Dr Cormac Bryce, lead author and reader in risk management at Bayes Business School, said: “The message that emerged repeatedly from our discussions with CROs was the wide range of skills required for the role. Senior leaders now appreciate that effective risk management can fuel growth rather than hinder it.”
The report recommends that financial services firms:
- Integrate risk management deeply into business strategies.
- Develop CROs with a broad mix of leadership, technical, and business skills.
- Foster collaboration between CROs, CEOs, and business units to enhance organisational resilience and growth.
Commenting on the findings, Alastair King, said: “The strategic management of risk will define the leading financial centres of the future. To sustain the UK’s position as a world leader in financial services, we must innovate and take responsible risks.
“Regulators need to focus not only on preventing failure but also on encouraging success.”
Modern CROs see their role as multifaceted, encompassing the design of robust risk frameworks, crisis management, cross-functional collaboration and active participation in strategic decision-making.
They are increasingly seen as equal partners to CEOs, ensuring that risk considerations align with long-term objectives.
Jennifer Geary, City risk practitioner and author, noted: “This report shows that CROs are ready to drive responsible growth. Leaders should harness this expertise to support informed risk-taking.”
Dr Sionade Robinson, vice-president of enterprise at Bayes Business School, added: “This research demonstrates how academia and industry collaboration can deliver meaningful insights to maintain the City of London’s global leadership in financial services.”
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