Monday, June 20, 2005
Chief risk officer: A valuable addition to the C-suite
What would you do if 20 per cent of your work force left your company in one day? How about turn to your chief risk officer?
That's what Hydro One Inc. did in 2000, when 1,400 of its long-serving employees took an early-retirement offer all at once -- far more than the utility had expected.
"If you think of any organization where 20 per cent of your workers walk off the job, you've got plenty of risks of how to keep things going," Hydro One's CRO John Fraser says.
"The two main ones: things might collapse because of people leaving in critical areas and, secondly, managers might panic [over losing so many people], try to persuade the president to rehire and, before you know it, we'd have 1,400 people back on board."
Hoping to fend off those risks, Mr. Fraser was put to work. His mission: to figure out, department by department, how the loss of so many bodies would affect all of the utility's business objectives. His conclusion: With the addition of just 125 people and $4-million in consultants' costs, "we could mitigate the risk to an acceptable level."
Such is the work of Mr. Fraser as Hydro One's chief risk officer-- the latest title to join the C-suite, along with CEOs, COOs and CFOs.
It's a position growing in importance as companies, shaken awake by corporate scandals and the increasing complexities of business, pay closer attention to the many risks they face.
And they are relying on the CRO to be their chief watchdog -- charged with monitoring all of the risks that a company faces.
posted by Brian Moran @ 8:22 AM