Congratulations to Amer Ahmed, the Chief Risk Officer of Allianz Re, the reinsurer, now appointed Chief Executive of his company.
This may be a better outcome than for RBS, the bank that lost CRO Nathan Bostock to a competitor. But promoting a CRO to CEO is not without risks.
It's not just a question of the incentives working on an ambitious CRO. There is the question whether the new CRO can ever be in effective control of risks emanating from a predecessor so respected as to become CEO.
And there is a fundamental problem similar to but different from that of bank traders having back-office experence. Jerome Kerviel's compliance team experience helped him to evade Soc Gen's risk controls; and UBS may have had the same problem with Kweku Adoboli. Its a risky policy to allow risk people to acquire executive control.
The best solution remains persuading CROs that being CRO is a career destination. Barclays Bank seem to be having some success with Robert Le Blanc at a cost that is modest at least in in banking terms.
Anthony Fitzsimmons
www.reputability.co.uk
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