Key Responsibilities and Required Skills for Chief of Risk Management

🎯 Role Definition

The Chief of Risk Management (Chief Risk Officer / Head of Risk) is a senior executive responsible for defining and executing the enterprise risk management strategy, establishing risk appetite and governance, overseeing credit, market, liquidity and operational risk programs, ensuring regulatory compliance, and enabling data-driven risk decision-making across the organization. This role partners with the Board, CEO, business unit leaders, finance, legal and compliance to identify, measure, monitor and mitigate material risks while enabling sustainable growth.

📈 Career Progression

Typical Career Path

Entry Point From:

Head of Enterprise Risk Management
Head of Credit Risk / Head of Market Risk
Senior Risk Director, Model Risk, or Regulatory Compliance Lead

Advancement To:

Chief Risk Officer for larger financial institution or multinational
Group Chief Risk Officer (across multiple business units/geographies)
CEO (for risk-experienced executives with broad P&L exposure)

Lateral Moves:

Chief Compliance Officer
Head of Internal Audit
Head of Financial Control / CFO-track roles

Core Responsibilities

Primary Functions

Develop, own and continuously refine the enterprise risk management (ERM) framework, including risk taxonomy, risk appetite statements, risk limits, reporting cadence and escalation protocols to ensure comprehensive identification and control of strategic, credit, market, operational, liquidity and reputational risks.
Lead the design and implementation of a forward-looking risk appetite framework aligned to corporate strategy and capital planning, ensuring measurable limits, trigger points, and escalation mechanisms that inform business decisions and capital allocation.
Oversee credit risk management policies and portfolio governance, including underwriting standards, concentration risk monitoring, provisioning practices, credit stress testing and remediation actions for deteriorating exposures.
Direct market and liquidity risk programs: set limit frameworks, approve hedging strategies, oversee daily risk metrics (VaR, stress scenarios, liquidity coverage) and partner with treasury to ensure funding resilience under stressed conditions.
Build and govern an integrated model risk management program: establish model development, validation, inventory, change control and model governance processes in accordance with regulatory expectations and internal policy.
Design and deliver enterprise-wide stress testing and scenario analysis programs (ICAAP, CCAR-style or bank-regulatory equivalents), interpreting results to drive capital planning, contingency planning and management actions.
Establish and chair risk governance bodies (Risk Committee, Asset/Liability Committee, Model Risk Committee) and ensure clear agendas, minutes, decision logs and follow-up on management actions to the board and executive team.
Maintain proactive regulatory engagement: interpret regulatory guidance (Basel, local regulators), drive timely regulatory reporting and remediation, coordinate regulatory exams and lead remediation for any identified deficiencies.
Implement quantitative and qualitative risk measurement methodologies, including portfolio analytics, expected loss/PD/LGD modeling, calibration practices and validation frameworks to ensure sound risk measurement and capital adequacy.
Lead enterprise operational risk management: business continuity, incident management, loss event capture and root-cause remediation, outsourcing/vendor risk assessment, cyber risk coordination and third-party risk governance.
Drive data strategy for risk: define data governance priorities for risk data quality, lineage, architecture and reporting; partner with data engineering and analytics to ensure accurate, auditable and near real-time risk metrics.
Oversee model governance and model validation teams to ensure predictive models (credit scoring, pricing, market risk models) are robust, independently validated and comply with model risk policy and regulatory standards.
Collaborate with legal and compliance to translate regulatory change into operational impact and implement policy updates, ensuring compliance with anti-money laundering (AML), KYC, sanctions and other regulatory obligations where relevant.
Own the risk reporting suite for executives and the board: deliver timely, concise, data-driven risk dashboards, heat maps, risk appetite breaches and action plans that support decision-making at all levels.
Establish a proactive risk culture: define training programs, role-based accountabilities, incentive alignment and behavioral expectations to ensure risk awareness across senior management and staff.
Drive capital and liquidity planning: coordinate with finance to quantify economic capital needs, regulatory capital ratios and develop contingency funding plans under stressed scenarios.
Manage and mentor a multi-disciplinary risk organization: recruit, develop and retain analytics, credit, market, operational and model risk professionals with clear career paths and technical competencies.
Oversee vendor and third-party risk frameworks: conduct due diligence, risk assessment, contract clauses, KPIs, and ongoing monitoring for critical vendors and outsourced service providers.
Lead incident response and remediation for major loss events or regulatory findings: conduct root-cause analysis, implement remediation plans and track closures with clear ownership and timelines.
Partner with business leaders to embed risk considerations into product development, new market entry, pricing and distribution strategies to ensure risk-adjusted returns and compliant growth.
Approve and monitor hedging strategies and risk transfer mechanisms where appropriate to manage market, credit or operational exposures cost-effectively.
Ensure robust information security alignment with risk objectives: collaborate with CISO to prioritize cyber risk remediation and scenario planning for cyber incidents affecting business continuity.
Drive continuous improvement and digitization of risk workflows via automation, advanced analytics, and machine learning to increase timeliness and accuracy of risk signals.
Provide expert guidance and thought leadership to the Board and Audit/Risk Committees on emerging risks (geopolitical, climate transition, ESG, fintech disruption) and recommend mitigation strategies.

Secondary Functions

Support ad-hoc data requests and exploratory data analysis.
Contribute to the organization's data strategy and roadmap.
Collaborate with business units to translate data needs into engineering requirements.
Participate in sprint planning and agile ceremonies within the data engineering team.
Provide subject-matter expertise for cross-functional projects, M&A due diligence and strategic initiatives that have risk implications.
Facilitate training and awareness sessions for business units on new risk policies, reporting tools and scenario analysis outcomes.
Maintain a risk issues register and track remedial action status, owners and closure dates to ensure timely mitigation of elevated risks.
Coordinate external vendor assessments and audits of risk infrastructure, and implement recommended improvements.
Assist in the development of compensation frameworks that align risk-taking with long-term performance and control standards.

Required Skills & Competencies

Hard Skills (Technical)

Enterprise Risk Management (ERM) framework design and implementation experience across credit, market, liquidity and operational risk.
Regulatory knowledge: Basel frameworks, local banking/regulatory requirements, ICAAP/ILAAP, CCAR experience or local equivalents.
Quantitative risk modeling: PD/LGD modeling, credit scoring, VaR, stress testing, scenario analysis and model validation techniques.
Capital planning and associated analytics: economic capital allocation, RAROC, capital stress testing and contingency planning.
Data governance and data architecture familiarity: risk data aggregation (BCBS 239-style principles), data lineage, ETL processes and quality controls.
Model risk governance: model inventory, independent validation processes, back-testing and model performance monitoring.
Financial statement analysis and portfolio analytics: concentration risk, sector analysis and loss provisioning methodologies.
Risk reporting and visualization tools: experience with BI tools (Tableau, Power BI), SQL and familiarity with Python/R for analytics.
Operational risk management methods: incident/loss event management, root-cause analysis, KRIs and business continuity planning.
Third-party and vendor risk management skills: contract review, vendor due diligence and performance monitoring.
Knowledge of compliance areas relevant to the business: AML/KYC, sanctions, consumer protection regulations (where applicable).
Experience with governance processes: running risk committees and producing board-level papers and minutes.

Soft Skills

Strategic leadership: proven ability to translate risk insights into strategic actions and influence executive decision-making.
Strong communication and presentation skills: able to convey complex quantitative ideas clearly to the board, regulators and non-technical stakeholders.
Stakeholder management: builds credibility with business leaders, finance, legal and regulators and drives consensus across diverse teams.
Decision making under uncertainty: pragmatic, data-informed judgment with the ability to prioritize actions during stress events.
Change management: experience leading organizational change, process redesign and cultural transformation programs.
Coaching and people development: mentors high-performing risk teams and creates clear career development pathways.
Integrity and ethical judgment: maintains high professional standards and fosters a speak-up culture.
Problem-solving and analytical thinking: combines quantitative analysis with business context to deliver practical risk solutions.
Resilience and crisis leadership: calm and effective leader during incidents, regulatory interactions and market dislocations.
Collaborative mindset: works cross-functionally to balance risk controls and commercial objectives.

Education & Experience

Educational Background

Minimum Education:

Bachelor's degree in Finance, Economics, Mathematics, Statistics, Engineering, Computer Science, Risk Management or related field.

Preferred Education:

Master's degree (MSc/MA) in Finance, Financial Engineering, Economics, Statistics or MBA.
Professional certifications such as FRM (Financial Risk Manager), CFA, PRM, or equivalent; and/or executive education in governance or regulatory compliance.

Relevant Fields of Study:

Finance and Financial Engineering
Economics and Statistics
Data Science / Applied Mathematics
Business Administration (MBA)
Risk Management / Actuarial Science

Experience Requirements

Typical Experience Range:

12–20+ years of progressive experience in risk management, with at least 7–10 years in senior leadership roles responsible for multi-disciplinary risk functions.

Preferred:

15+ years of experience in banking, insurance, asset management or large corporate risk functions with demonstrable experience interacting with boards and regulators, managing ERM frameworks, capital planning and leading model risk and data-driven risk analytics programs.