By Cyril Tuohy
There's never a dull moment in the risk management employment world, especially when so many companies seem to get themselves into trouble ignoring their own risk management practices.
From risk managers testifying before Congress about the shocking behavior of their bosses, to the hiring of risk managers formerly in the employ of the government-backed mortgage lenders in need of a bailout, the past 18 months have been full of transitions.
As the economy slowly recovers from recession, and as executives burnish their resumes in anticipation of their next big move, it's a good time to take a peek and check in on where some risk managers have been recently.
For the sake of brevity, we'll stick to the highlights.
Let's begin with Michael Roseman, former chief risk officer with MF Global, the defunct hedge fund run by former New Jersey Gov. Jon Corzine, former co-head of the investment bank Goldman Sachs.
Roseman testified recently before a House oversight subcommittee about his concerns regarding now-defunct MF Global's $4 billion bets on European debt in the fall of 2010.
Roseman, according to news reports, was told in January 2011 that he was being replaced after raising concerns about the company's exposure to European government bonds, well before MF Global filed for bankruptcy last fall.
Not to worry, though, in addition to his $350,000 annual salary, the floor of his first-year bonus was set at $1 million, according to a report in the Motley Fool, and he was offered a $1.35 million severance package.
Michael G. Stockman, Roseman's successor and former chief risk officer for the American branch of UBS, told the subcommittee that he was not involved in putting together a plan for how MF Global would handle financial distress.
In other news regarding financial services risk managers, PNC Senior Vice Chairman Joseph C. Guyaux, former president and head of PNC Financial Services Group's retail banking unit, on Feb. 24 was also named chief risk officer as the sixth-largest U.S. bank group prepares to digest its $3.62 billion acquisition of RBC Bank USA from the Royal Bank of Canada.
Guyaux, 61, replaces Enrico Dallavecchia, who went on administrative leave in December after he and five other former Fannie Mae and Freddie Mac executives were sued by the SEC for allegedly misleading investors about risks related to subprime loans.
Dallavecchia, the former chief risk officer at Fannie Mae, was not accused of wrongdoing in connection with his work at PNC. PNC Chief Credit Officer Michael J. Hannon, who had been filling in as chief risk officer until Guyaux was appointed, will return to his duties, the company said.
A Government endorsemnt
With the risk management function continuing to play an important role in the affairs of the nation's most important institutions, the federal government has appointed several executives with responsibility for risk.
Stephen Quick, former director of the Office of Evaluation and Oversight at the Inter-American Development Bank, last summer was appointed as the Federal Deposit Insurance Corp.'s first chief risk officer.
Sheila Bair, former chairwoman of the FDIC, and who has since left for the Pew Charitable Trust as senior adviser, in a July 8 statement, said Quick's "depth of experience" in finance and policy fields would benefit the FDIC as it expands its corporate risk management program.
Quick, who holds a doctorate from Stanford University, has also served as the executive director of the Joint Economic Committee of Congress and was the chief economist to the House Committee on Banking, Finance and Urban Affairs.
The FDIC is not the first government agency to add a chief risk officer to senior management ranks in the wake of the subprime mortgage crisis, according to an article posted on the website of Housingwire, which covers the housing economy.
The Federal Housing Administration, part of the Department of Housing and Urban Development, established the position of chief risk officer as far back as October 2009. Bob Ryan, who was named chief risk officer, was promoted to deputy assistant secretary for risk management and regulatory affairs in Sept. 2010.
The Federal Housing Finance Agency, a separate institution than the Federal Housing Administration, in December hired Manoj K. Singh as principal examiner for risk, in charge of Fannie Mae and Freddie Mac, the agency announced. Singh, a former consultant, senior vice president at Freddie Mac and Wall Street executive, is an expert at designing and implementing risk management systems using value-at-risk analysis.
Over at the World Bank, former Lehman Brothers and Barclays Capital risk executive Madelyn Antoncic, a Ph.D. in economics and finance, was named vice president and treasurer.
World Bank Group President Robert B. Zoellick, in announcing her hiring last June, said Antoncic was "known for her forthrightness." Antoncic will be responsible for leading seven business lines at the bank, the bank said.
Antoncic left Lehman after she raised concerns over Lehman's deals before the bank failed, according to a report published in the U.K. Guardian.
Michael Rosenberg, former director of risk management for the Pepsi Bottling Group Inc., was appointed in December as the first director of risk management at the University of Kansas, the university said.
Rosenberg will lead efforts to create and maintain a risk management program that utilizes disciplines such as loss prevention, risk financing, claims management and risk information systems, according to the university.
Specific tasks will include risk exposure identification, analysis of risk financing options, reviewing contracts for risk management considerations and serving as a source for departmental inquiries regarding risk management.
He reports to chief business and financial planning officer Theresa Gordzica.
"As KU expands its service and outreach across Kansas and partners with organizations around the world, it's crucial that we continue to find efficiencies and protect the university from financial and reputational risks," Gordzica said in a statement. "By creating this position and bringing Michael aboard, we're ensuring the university is operating as efficiently and safely as possible."
Rosenberg's responsibilities extend to all of the university campuses, including the Lawrence and Edwards campuses, and the University of Kansas Medical Center campuses in Kansas City and Wichita.
Rosenberg's expertise in risk management will become increasingly important as the university advances the Changing for Excellence initiative, as well as Bold Aspirations, the university's strategic plan. Both initiatives emphasize finding efficiencies and mitigating risk.
Prior to working for Pepsi Bottling, he was director of risk management for Pepsi Cola North America from 1995 to 1999, and manager of international insurance and claims administration for PepsiCo Inc. from 1990 to 1995. He has a bachelor's degree from the State University of New York at Potsdam.
At UBS AG under the helm of new CEO Sergio Ermotti, Philip J. Lofts was named group chief risk officer in December, taking the place of Maureen Miskovic who left after less than a year on the job in the wake of a $2 billion trading scandal.
Ironically, it was Miskovic, the former chief risk manager for State Street and Lehman Brothers, who replaced Lofts in October 2010 after he was promoted to CEO for the Americas. Miskovic was ousted as one of the first moves by UBS' new group CEO Sergio Ermotti, who was brought in to improve the bank's performance.
The Hartford in October announced the appointment of Robert Rupp, 58, executive vice president and chief risk officer, reporting to Chairman, President and CEO Liam E. McGee. Rupp assumed the role from Lizabeth H. Zlatkus, who retired.
McGee said Rupp had the breadth, depth and leadership qualities necessary to advance the Hartford's enterprise risk management practices.
He most recently served as executive vice president and head of enterprisewide market risk at BNY Mellon, the company said. Prior to that, Rupp was managing director of risk management at JP Morgan Chase.
The Hartford also hired Tom Tucker in February as chief underwriting officer for commercial markets and head of specialty casualty. Tucker comes to The Hartford from Chartis where he served as risk officer for the global commercial insurance group.
Tucker previously reported to Alexander Baugh, who was appointed Chartis' chief risk officer and head of strategic planning at the start of the year. Baugh reports to Sid Sankaran, chief risk officer of AIG, Chartis' parent.
Across the country, the California Public Employees' Retirement System last March appointed Larry Jensen as chief risk officer, a new position created to improve the pension fund's risk management program, the pension fund said.
Jensen had been interim chief risk officer since Oct. 1, 2010, when he was appointed to head the new office of enterprise risk management for the $230 billion pension fund, that nation's largest.
He reports to Steve Kessler, deputy executive officer for operations; CEO Anne Stausboll; and the CalPERS board, and oversees enterprise risk management, enterprise compliance, enterprise privacy and security, and business continuity/disaster recovery.
CYRIL TUOHY is managing editor of Risk & Insurance®. He can be reached at email@example.com.
April 13, 2012
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