Risk management is proactive, peering around corners to identify uncertainties that may impact the organization’s ability to achieve its objectives. Crisis management is reactive, marshaling resources to respond to a risk that has already manifested and requires immediate attention. Both require senior leadership engagement to be effective, but the roles and methods can be very different, and the chief risk officer (CRO) may be the best person to address both.
If CROs are typically focused on addressing how current exposures might impact future results, what is their role in the middle of a crisis, when a significant risk has already manifested? Many CROs have had to manage crises, but the current pandemic is pushing everyone into uncharted territory. The challenge (and opportunity) for CROs is to pursue actions that add value for their enterprises, both in the moment and for the long-term.