Jens Riedel Practice Group Leader, Berlin and Boston
The recent economic crisis has forced financial institutions to take a critical look at how they manage risk.
The collapse of several high-profile banks, the emergency rescue of others, the loss of hundreds of billions of dollars, and the forced departure of several CEOs and CROs are all signs that something went terribly wrong with how firms were managing and governing risk-taking, highlighting an urgent need for improved risk management across all areas of the financial community. Across banks, asset managers, insurers and other financial intermediaries, boards and CEOs are asking for more information on the risks that their firms are exposed to. These extraordinary challenges emphasize the importance of, and need for world-class talent and leadership.
What skills are needed now?
With a heightened focus on risk management, risk is now a regular topic of discussion for boards and management committees. Investors, like Warren Buffet, are publicly demanding that CEOs and Boards be held accountable for risk management. As a result, the Chief Risk Officer at many firms now reports directly to the President or CEO, is frequently a member of the Executive Committee, and routinely briefs the Board of Directors. Communication skills are more important than ever as a result. CEOs are looking for Chief Risk Officers who can explain complex risk issues in easily understood terms and relate them to business issues. In many firms risks were identified and transparent to management, yet no action was taken to mitigate them. In some cases this was because risk was relegated to a staff function, in others the CRO simply did not make a cogent argument. Firms are now demanding Risk Officers who can compel business owners to action.
Risk is no longer a defensive weapon but also a strategic tool. With capital more constrained, those financial institutions that can allocate it efficiently on a risk-adjusted-return basis will outdistance their peers. Firms will need to integrate risk management into their business development, product development and strategic decision-making. Chief Risk Officers need more than just the technical and management skills that were required in the past; they need a strategic vision, and to be able to lead the organization in implementing a sound risk management infrastructure, and instill a rigorous, disciplined risk culture. They also need to be respected as business partners and have the ability to contribute in areas outside of the risk domain.
How can Egon Zehnder support the risk management industry?
Egon Zehnder’s global Risk Management Practice consists of a highly professional team around the world who partner with the managements of banks, asset managers, insurers, professional service providers, and non-financial service firms to meet hiring and talent management needs. Egon Zehnder has experience working with senior executives across all areas of risk (market, credit, operational, and treasury) and a leading global executive search practice.
How we operate
Given the high demand for talent and its relatively limited supply – especially now with so much of the talent pool being regarded as “tainted” – hiring the right risk management talent is more difficult than ever. While the talent pool is smaller, the demand for risk management talent continues to grow, and counter-offers are commonplace, making it difficult to close on candidates. Our unique business model facilitates collaboration across geographic boundaries, enabling us to bring highly skilled, experienced teams to the table, with proven expertise tailored to meet the needs of clients and achieve credibility with candidates and opinion leaders around the world.
In addition to our traditional recruiting services, Egon Zehnder offers a rigorous and systematic succession process based on our well established Leadership Strategy Services. As leaders in the field, we are particularly well placed to support Chief Risk Officers with access to the market, benchmarking against external talent, and creative solutions and sources of new talent. By focusing on people and skills management in the context of the risk-management profession, we help companies to re-think their organization’s approach to talent.