Only 47% of pension funds, endowments, foundations and sovereign wealth funds have a chief risk officer, according to a survey of risk governance practices at financial institutions worldwide.
Also, 27% of these four fund sponsor types have a “risk-appetite statement,” defining the variability of results they want to take, while 13% plan to create one, according to the survey by Professional Risk Managers' International Association and Capital Market Risk Advisors.
Among the fund sponsors, 14% have a risk committee of their board, while 21% plan to create one.
The survey of 121 financial institutions also included traditional investment managers, hedge funds, investment banks and insurance companies.
When all responding financial institutions were included, 85% have a chief risk officer or a similar position.
The survey, the first of its kind by the two organizations, looks at risk from the financial institutions' governance or board point of view, said Leslie Rahl, CMRA founder and managing partner.
“Formal risk appetite statements haven't fully caught on with institutional investors,” Ms. Rahl said, calling the documents “a valuable tool for the board to communicated risk appetite with management.”