Three Lines of Defense - Q&A

"Three Lines of Defense," Q&A Session

We started with a discussion of an earlier question: how do you balance "top-down" changes with "bottom-up" implementation in the 3LD framework? The short answer is that assigning accountability is key. Create the proper incentives (financial and otherwise), and you will get the behavior you want. [KR: I had to step out to take a client call and missed a few questions, I believe.]

Can CROs become CEOs?

Colin Lawrence: need a long evolution to get CROs to a place where they could be considered for CEO. Need to stop being risk measurers. Professional risk organizations need to provide/support executive training. CFOs managed to make the transition from "pure numbers guy" to business strategist, so CROs can follow that model.

Bogie Ozdemir: my firm's CFO was the CRO, and he stands a good chance of being picked for CEO.

Can a risk culture really change?

Leon Bloom: Yes, IF the CRO is on equal footing as other executives.

Colin Lawrence: People are working on developing ways to quantify risk culture. Once this is accomplished, it will make a huge difference. [KR: I'm tempted to try and count the number of times Colin says "et cetera."]

End Seminar.