FRM Part I · FRM Exam Part I · Enterprise Risk Management and Future Trends
Within an ERM framework, which of the following is the primary role of a chief risk officer (CRO)?
The CRO oversees enterprise-wide risk management, giving independent assessment and reporting of risks to senior management and the board. The role is not to trade for profit, conduct external audits, or set strategy independently of the board.
- ATo take proprietary trading positions that maximize firm profit
- BTo oversee the firm's enterprise-wide risk management function, providing independent risk assessment and reporting to senior management and the boardCorrect
- CTo perform the firm's external audit
- DTo set the firm's business strategy independently of the board
Explanation
The CRO leads the independent risk function, aggregating and reporting risks to executives and the board. Trading for profit and setting strategy are business responsibilities, and external audit is performed by independent auditors.
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