This guide is ideal for Chairmen, Board Members, Chief Executive Officers, and Chief Human Resource Officers who are hiring and assessing Chief Risk Officers (CROs). It can also be an effective training tool for Chief Risk Officers who are preparing for their own interview process. This paper describes only one step in a 5 step assessment process. The full 5 steps are described in more detail at the end of this document. The initial assessment of a CRO and first step in the process starts with 7 key areas which are: + Assessing the + Chief Risk Officer + Seniority / Organizational Impact + Technical Expertise + Commercial Acumen + Leadership + Analytical Thinking + Communication Style + Vision / Strategy

1. Assessing
the Chief Risk Officer
An Introduction to Interviewing the CRO

2. Assessing the
Chief Risk Officer
This guide is ideal for Chairmen, Board Members,
Chief Executive Officers, and Chief Human
Resource Officers who are hiring and assessing
Chief Risk Officers (CROs). It can also be an
effective training tool for Chief Risk Officers who
are preparing for their own interview process.
This paper describes only one step in a 5 step
assessment process. The full 5 steps are described recommend you bring in a specialist to do this.
in more detail at the end of this document. The One of the most effective people I have ever
initial assessment of a CRO and first step in the seen at this task is Mr. Jan Bladen, Chief
process starts with 7 key areas which are: Operating Officer of Dubai Financial Services
Authority. He systematically tackles this issue
(alignment of risk appetite) through the
Seniority / Organizational Impact creation of a Board consensus in less than one
Technical Expertise and a half hours. Of course Jan has been
Commercial Acumen involved in Risk Management for over 20 years
and is a guru in his field. While you may not be
Leadership able to hire a guru to manage this process, I
Analytical Thinking highly recommend ensuring you have someone
Communication Style on the Board with Risk experience. Hiring a Non
Executive Director who was a former CRO or
Vision / Strategy Risk professional is a good way to add this
expertise to your leadership team at a nominal
While many people feel the assessment starts cost. I will not go into more detail about
with the candidate who is applying to be a CRO, aligning the team on what is a reasonable risk
however it actually starts with the company itself and what is not in this paper; however I did
and its CEOs/Boards risk appetite. This should want to stress how important alignment is to
include a clear understanding of the vision, having a successful hiring process for the CRO.
direction and strategy of the business, as a risk to
the business can only be defined in so much as it In 1993 GE Capital hired the first CRO in the
impairs these elements. A risk therefore is an world, a man by the name of Mr. James Lam.
event which inhibits an organization from Thus the CRO position is relatively new and as a
achieving its objectives. result it is often loosely defined.
Responsibilities can vary from one Chief Risk
Generally, a Board consists 5 to 12 executives Officer to the next and we cannot assume that
each characterized by his/her own risk tolerance. just because someone is currently a CRO that
The Chief Executive Officer will also have his own they are capable of performing at the level we
personal appetite and together with the Board require. The first thing one has to do is assess
and all the senior executives, will dictate the how senior the individual is who is applying for
tolerance level for the company. The more the position. Generally this can be tested by the
ambitious the vision the more risk the senior individual's reporting line, committee seats,
leadership team will be expected to take and the board positions, etc. Does the CRO have
less ambitious the vision the less risk the senior ultimate authority and accountability for the
leadership team will be expected to take. decision or are tough decisions escalated to a
Therefore it is pertinent to take into account the Group CRO in head office? The starting point
vision of the company and its desired risk level for the assessment is the reporting lines and
when deciding on what type of CRO is understanding exactly where the CRO in
appropriate for an organization. Aligning the question sits in the organization. I have listed
Board's risk appetite is a science and I some suggested questions below;
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3. Seniority / Organizational Impact
Sample Questions
(Metric Based on Size and Seniority)
Reports to: Direct Reports (What areas report to the CRO, Operational / Credit Admin /
Remedial / Wholesale Risk/ etc)
Which Committees are you on?
How does the Governance structure work at your organization?
Describe the approval process and the perspective limits of authority? How does a proposal
move through the system? What does the approval chain look like?
How is the Risk team structured?
How big is the Risk Team?
Can you draw the organizational structure of the Risk team?
What committees are you a part of? (ALCO/EXCO / Risk / Audit)
Which area of Risk is your core strength? (Market / Operational / Wholesale / Retail / Treasury / etc)
What is the future of Operational Risk
What are the three biggest mistakes banks make when assessing Market Risk?
Commercial
Acumen
Once the seniority of the CRO is established one country's GDP growth is coming from. If your
must next assess the candidate's commercial credit portfolio is growing asymmetrically in
acumen. The CRO must be able to recognize relation to the market's GDP growth you are
blind spots, “see around corners” and understand heading into a serious problem. A good CRO
where the pitfalls in the market are. As markets should know which metrics to look at and be
change or clients’ agendas drift, the CRO must be able to discuss market trends in depth.
able to stave off downside exposures early on
and help course correct the organization's
position. The best CROs have the pulse of the
market and are able to stay clear of bubbles
before they burst. They must possess a deep
understanding of their client's counterparty risk
and are able to identify secondary risks in a jiffy.
This sometimes means changing strategy mid-
stride and can often find them locking horns with
business heads.
The CRO should have insight into where the
organization will be driving its biggest revenue
streams from and should know where the
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4. Commercial Acumen
Sample Questions
Describe a time you had to align the business with the credit strategy? What was the situation,
what did you do and what was the result?
How can you manage business growth while maintaining appropriate risk thresholds?
More banks play the price war, how will you deal with this?
Do you oversee Remedial?
Describe what you look for in a good Risk Manager?
Where do you see the organization growing in the future?
What industries are high growth areas?
Technical
Expertise
The Chief Risk Officer must be viewed as a pillar
of expertise in his/her field and must have
commanding knowledge of their subject matter.
He/she must possess deep specialized
knowledge complimented by a wealth of
experience. The CRO must understand the local
and regional legal idiosyncrasies of each region
he/she is responsible for and should be able to
discuss the differences off the top of his/her
mind. Not understanding these issues can prove
disastrous. A key component to any risk agenda is the
ability to constantly assess and monitor the
The CRO should intuitively know which key organization's exposures and risks. The best
performance indicators to keep an eye on and CROs will not have to pause and think deeply
which types of reports senior management about which KPIs they would use or which
should be reviewing in order to ensure the management reports are most important. They
organization has the right red flag mechanisms in should have a clear blue print in their minds
place to detect negative events at an early stage. about how to create a risk infrastructure.
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5. Technical Expertise/Risk Competency
Sample Questions
How well do you know the local/regional legal systems?
Describe a time you were required to reduce the amount of bad loans in a portfolio? What was the
situation, what did you do and what was the result?
Describe a time you had to restructure bad loans? What percentage of bad loans or toxic assets were
you able to turn around? Were you able to limit the bank's exposure to these toxic assets?
What kind of MIS do you use? Which packages and which KPIs do you include in the dashboard for
the MIS? What MIS packages do you provide to Senior Management, to the Committees and the Board?
If you started at the bank tomorrow which KPIs would you use to assess the current credit situation
and which success metrics would you use? NPV, ROE, NPL, GPM, IRR, NOP, RWA, LGD, etc?
What is the toughest thing about Risk Management?
Vision &
Strategy
The CRO is often viewed as the nemesis of the
front office, but the best CROs are commercially
minded individuals with a clear view of how to
balance revenue growth while maintaining an
acceptable risk appetite. This often requires an
individual who is more commercially savvy and
tuned into the macro and micro-economic trends
than the pedestrian masses. Those CROs relationships in a specific area.
operating in the top 10% of their profession will The majority of CROs will not be visionaries and
invariably push and pull their organizations in most will not have led a new agenda. Generally
and out of key sectors and sub-niches ahead of this skill has not been cultivated within the
receding profit pools. They will intuitively know lower ranks of the risk department and thus is
when it is time to get out of certain relationships not a common skill among CROs. However, this
or when their policies and procedures should will change as the risk profession matures and
encourage the institution to deepen their continues to blossom.
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6. Vision & Strategy
Sample Questions
What is your Risk Management philosophy? Are you Conservative or are you more commercially
aggressive than you CRO peers?
What asset classes would you encourage? Which industries are you averse to? Which ones would you
prefer or encourage?
Can you give me an example of a time you had a vision of how to grow a credit portfolio, what was the
situation, what did you do and what were the results?
Have you ever been in a situation where your Credit portfolio was growing asymmetrically to GDP
growth, were you able to course correct your strategy in time?
Can you give me an example of a time you came up with an idea that increased revenue or
reduced a cost?
How did you manage the financial crisis?
How did you manage the recent Political Crisis in the Middle East?
Were you affected by the Japanese crisis?
What are the current biggest political risks to your business?
Communication
Style
As a key member of the senior executive
leadership team it is paramount that the CRO is
able to communicate effectively. Their ability to
handle high pressure situations with finesse and
bring conflict to swift closure are quintessential
tools of the job. Furthermore as the role is
relatively young as compared with other C – Suite
positions, it is critical that the CRO is able to
mentor and effectively champion the necessary
knowledge transfer the organization requires.
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7. Communication Style
Sample Questions
Can you give me an example of a time you had trouble seeing eye to eye with a co-worker but
were still able to maintain positive relations and deliver results?
Can you give me an example of a time one of your subordinates did not understand your
instructions clearly, how did you change your operating style to communicate with them?
How do you take a vision and translate it into operational objectives which can be executed?
Tell me about a time when being more aware of what is going on would have helped to solve a
problem?
Tell me about a time when you envisioned a better outcome and energized others to achieve the
desired results?
If I were to ask a colleague /subordinate about you, how would they describe you?
Describe the last time you lost your temper? What was the situation?
Leadership
Heading a department which can literally make The first couple of questions below are a great
or break a bank requires leadership. The CRO way to get an idea about someone's operating
must have the gravitas and pedigree to style. Your least favorite person is often your
command the respect of the team complimented anti-thesis, for example if you are very punctual
by a commanding knowledge of risk and then your co-worker who is notoriously tardy
controls. They are a critical factor in mobilizing will drive you crazy.
people to follow a new direction. The CRO must
be effective at making impactful decisions and
intuitively know the vision of the organization.
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8. Leadership
Sample Questions
Describe your least favorite person on your team?
Describe your least favorite person in the company?
Describe a time you had to define your Board's risk appetite for them? How did you get the board to
become aligned and agree upon a certain risk tolerance?
How do you get all divisions to use a standardized risk measurement system?
Describe a time you had to re-align the Risk strategy to the company's vision?
Can you give me an example of a time you were able to step into a tough situation, give the team
direction and deliver positive results?
What is the toughest thing about management?
What is the purpose of leadership?
How would you define a good leader?
What is the key to getting people to execute the organizations strategy?
What is the biggest reason why strategies do not get executed?
As a leader within an organization you must often build support for goals and projects from people
who do not report to you and over whom you have no authority. Tell me about a situation in which
you demonstrated that you can build the needed support?
How do you take a vision from agreement, acceptance, internalization, commitment to results?
How would you rate your own leadership skill on a scale of 1 – 10? What's missing?
Analytical
Thinking
The best CROs are able to see around corners and
mitigate risks before they take place. Their ability
to unearth trends and recognize patterns in the
market allow them to stay clear of pit falls and
avoid downside risks their competitors fall prey
to. The CRO must constantly be analyzing and
scanning the organization for new risks. They
should have insights most others fail to have and
have an exceptional ability to trouble shoot
critical areas in the organization.
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9. Analytical Thinking
Sample Questions
Tell me about a time when you developed a new approach or offered a new idea that led to the
success of a project?
Describe a time when you applied your expertise to unearth a trend or pattern in the market place
others failed to recognize?
Tell me about a time when your initial assessment of a problem was deemed incorrect? How did
you figure this out and how did you react?
Can you give me an example of a time you declined a proposal which your peers wanted you to
approve? What was the situation and over time how did the company perform?
Can you give me an example of a time you were able to make predictions about how the market
was going to perform?
Can you describe a time when you were able to unearth a fraudulent proposal, what was the situation,
how did you figure it out, and what was the result?
Assessment
Sheet Summary
This paper provides a brief snapshot into the approach and personality.
initial interview of a CRO. Generally a full For example asking “what is the toughest thing
assessment consists of 5 key areas: about management” actually tells you what the
candidate's biggest management weakness is.
Of course if you ask the candidate what is your
Technical/Competency Based Interview biggest weakness they may be reluctant to tell
Motivational / Subconscious you what it is. However if they say the toughest
Drivers Interview thing about management is aligning the team
or dealing with conflict, or letting people go;
Case Study you are actually gaining significant insight into
Psychometric Test their weaknesses.
References
Also key in the assessment is not so much what
As you can see this is a very thorough process the candidate is saying but how they are saying
and requires a professional approach. Many of it. 80% of our communication is non-verbal and
the questions described in this paper provide a the assessment professional must have a keen
deep insight into the candidates thinking style, eye for the subconscious clues the candidates
page 8

10. give us. Finally the biggest opportunity to assess an opportunity one should never miss.
the candidate is after the interview is over, simply In closing it is difficult to summarize the initial
walk the candidate to their car. Often once the assessment of a C-Suite executive but I hope I
candidate is out of the building they let their have added some structure around the first step
guard down and start acting more naturally. The in a methodical and regimented selection
effect of having finished the interview and process. Should you require some advice or
having physically left the building gives them the guidance regarding your own CRO selection
feeling that the interview is over. They often process, Stanton Chase International would be
begin to speak more casually with you and will delighted to help. Please feel free to contact me
give you great insights into their life, personality directly at my address below.
and personal goals. This is great information and
Sincerely,
Shane Phillips
MENA Regional Practice Leader
Financial & Professional Services
s.phillips@stantonchase.com
page 9

11. About
Stanton Chase International
Stanton Chase International Industrial, Financial, Consumer & Retail,
(www.stantonchase.com) is a specialized global Technology, Logistics and Transport, Healthcare
executive search consultancy firm of first choice & Pharma, and Professional Services. Since its
to multinational companies, offering executive incorporation, our presence in the Middle East
search services globally, with regional knowledge has grown 6 times by gross revenue, and we
and local insight. Today, it operates with truly have opened two additional offices in Abu
integrated resources of over 70 offices in 45 Dhabi and Doha.
countries. In recent surveys, Stanton Chase
continues to be ranked among the top 10 Stanton Chase is a member of the Association of
international executive search firms by size, Executive Search Consultants (AESC) and we
stature and reputation. strictly adhere to its ethics and code of conduct.
Since 1959, the AESC represents retained
Stanton Chase in the UAE was founded in 2006, in executive consulting firms worldwide by
order to assist organizations in identifying and establishing professional and ethical standards
attracting outstanding individuals for senior for its members and providing information to
management roles and boards across the Middle the profession, the media, and the public.
East region. The office is specialized in Senior
Executive level appointments in the sectors of
page 10

12. DUBAI, UNITED ARAB EMIRATES
Tel: + (971) 4 3693529
Fax: + (971) 4 3604480
Address: Office S06, Block 17,
Dubai Knowledge Village, P.O Box 500195
ABU DHABI, UNITED ARAB EMIRATES
Address: Bldg.B, Al Mamoura 15th Str.,
P.O Box 46400
Shane Phillips
MENA Regional Practice Leader
Financial & Professional Services
s.phillips@stantonchase.com
Tel: (+971) 4 3693529
Fax: (+971) 4 3604480 DOHA, QATAR
Direct: (+971) 4 3693539 Address: L14, Commercialbank Plaza,
Mob/Cell: (+971) 50 9407537 P.O.Box: 67678
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