You've just been given unprecedented power in your corporation, my friend. As the newly appointed chief risk officer, you are now Emperor of ERM. Use the power wisely. In your hands is the capability to help your company achieve its strategic goals and integrate and conquer the global marketplace.
You know this is the chance you've been waiting for to make your mark on the company--no, not just on the company, but on the entire profession and on corporate infrastructure in general.
You've become the only member of the C-suite with the bird's eye on all divisions and the know-how to keep those divisions rolling forward as one, despite a worker slip-and-fall epidemic at the warehouse in Topeka, a nationalistic government threatening supplies out of La Paz and a cyclone aimed at offices in Miami.
That makes you, arguably, the most important exec. Think of the C-suite as a rock band. The CEO is the lead singer, there mostly for his front-man style and presence. The CFO is the drummer in the back, keeping the rhythm of the numbers. Sure, he's important, but he's focused on counting "one, two, three, four," not the long term.
And you--you're the lead guitarist, driving the song with steady riffs, harmonizing among your team members with wicked licks and innovating your own way with mean solos.
Sure sounds like a big bite of responsibility, but you can chew it. You wouldn't be where you're at if you shook in your loafers at the thought of becoming CRO. You aren't doubting yourself.
When you close your eyes, you picture yourself at a future RIMS convention. There, you'll be a celebrity, complete with an entourage of assistants to follow you from one big appointment to the next.
You'll cap off the experience with a prime-time keynote speech. You'll entertain and amaze your peers with tales of lower comp costs, massive price cuts negotiated out of insurers and brokers, and your heroics during the latest mega-CAT.
Each and every one of those attendees will absorb your words, learn your lessons, and pass them on to colleagues and apprentices when they return home.
Better yet, imagine yourself invited to the next meeting of the M200. Then you'll know you've really made it.
In ERMese, your new job as CRO is to "coordinate the design and implementation of ERM processes," according to a recent survey on ERM from The Conference Board. To some companies, that may still be a fancy way to say: "Buy insurance and hire consultants and brokers for everything else."
Not your company. Your company is different. Your company is like one of those 16.1 percent of financial companies in The Conference Board survey that said that the CRO is the top executive responsible for informing the board about risk issues. And if your company's not like this, it will be when you get done with it.
Granted, you still have to buy insurance and build relationships with your favorite brokers. But with your newfound power, you can talk tough with carriers during renewals. If they want your good risks, they'd better be able to limbo.
You also could buy direct on important coverages and take a break from the brokers. You wouldn't be where you're at if you weren't independent, confident and capable.
You implement this ERM assignment without a hitch, and, who knows, you could start a new trend in executive moves--from CRO to lead singer of a C-suite rock band.
is associate editor of Risk & Insurance®.
August 1, 2006
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