Eighty-nine percent of pension plan sponsors, endowments, foundations, sovereign wealth funds, hedge funds and other asset managers have a chief risk officer, compared with 70% last year, according to a survey on risk governance practices at financial institutions released Tuesday by Capital Market Risk Advisors.
While there is wide agreement across respondents of the need for a chief risk officer, “opinion varies as to whether the CRO should have both a strategic/consultative role or just a control role,” said a report on the survey, Risk Governance: a Benchmarking Survey 2010.
Among those with CROs, 66% have both a strategic and a control role, up from 47% last year, the survey found.
The survey, conducted over two weeks ended July 20, reflects responses on the risk practices of 66 institutions that also included commercial banks, investment banks and insurance companies,
Among other results, 57% of respondents have a risk appetite statement, whose definition includes the ways an institution wants to take risk and the variability of results they want to accept. That result is an increase from 37% last year.
The greatest concern of cited by risk managers for the second half of this year is government changing the rules, cited by 40%, up from 38% last year, when it also ranked at the top.
“Overall, I think progress is being made toward more people using better risk management practices, e.g., risk appetite statements, chief risk officers, in-camera executive sessions of the risk committee or full board and the CRO without management present,” Leslie Rahl, CMRA managing partner, said in an interview.