As an experienced Chief Risk Officer, Amol Sahasrabudhe understands the role and its responsibilities. The CRO is a C-level executive, meaning executives with the title hold the top supervisory position in the risk assessment and mitigation department of the business. Because risk encompasses everything from threat assessment and prevention, the senior-level assignment is often misunderstood by muddy or overly complex definitions. Still, like other executive positions, the CRO has specific roles and responsibilities.
Amol Ashok Sahasrabudhe Discusses the 3 Roles of a Chief Risk Officer
To understand the roles of a CRO, you must first define risk management. In business, risk represents the potential loss of an asset. Assets include profits, campaigns, data or information, deadlines, buildings, equipment, and more. From that perspective, risk can come from anywhere, including a natural disaster or competitor sabotage.
A CRO, working with a team, defines and mitigates risks. Their job is to help the business maintain composure and avoid crises, which they do through three roles.
1. Assessing a Company’s Risk Tolerance
The primary role of a CRO is assessing and determining a company’s risk tolerance — the level of risk or volatility that is acceptable. The executive does this by determining existing and historical threats to establish a threshold. From there, they can use the tolerance criteria to assess future projects and business dealings.
2. Developing Plans To Mitigate Risks
According to Amol Sahasrabudhe, knowing a company’s risk tolerance helps the CRO and his department create plans or strategies to mitigate risk. For example, if a company operates in a flood zone, disaster response policies should be in place, offering guidance on how to avoid or deal with business interruptions from flooding. The response should include methods for securing inventory, information, and personnel safety.
3. Creating Reports About Company Risks and Risk Management Initiatives
Finally, a CRO must ensure that all personnel has access to risk assessments and mitigation plans. After all, it is impossible to protect the assets of a business if every manager and employee is unaware of the threat or response protocols.
Returning to disaster management, all employees should know how to vacate the property. They should know who to call to report the crisis and understand how to secure the property and personnel safety.
Addressing the Primary Risk Categories for Businesses
Beyond the roles of a CRO, there are three primary risk categories — beyond disaster management: technical, regulatory, and competitive risks. Technical risks refer to cyber-attacks and data breaches. Regulatory risks involve regulatory and legal compliance. Finally, competitive risks involves competition and marketplace position.
A CRO plays a significant role in corporate success and sustainability. As an experienced executive, Amol Ashok Sahasrabudhe understands the role and all its responsibilities.
Finally, Amol noted that a Chief Risk Officer should be able to accurately communicate the organization’s risk profile to all stakeholders. This includes creating reports and presentations which articulate the risk appetite, monitor risk exposure, and maintain the trust of external stakeholders.
All in all, the role of a Chief Risk Officer is vast and multi-faceted. It requires someone who is capable of understanding the complexities of risk management programs, able to stay up-to-date with regulations, and adept at communicating the organization’s risk profile to external stakeholders.