Role of the Chief Risk Officer 13 th October 2015

2. Chief Risk Officer 1.How has the role developed? 2.Skills and competencies? 3.The CRO’s challenge 4.IRM professional standards 5.What does a CRO therefore look like?

3. Is a Chief Risk Officer born or made? Experience Leadership Education Sector knowledge How much experience? How many roles? What level of exposure to executive and Board interactions? What primary and secondary education or qualifications? Time spent in or with which functions? Is insurance sector experience critical? What are the key aspects of CRO’s competency?

4. Chief Risk Officers – a history Chief Risk Officers have been existence for nearly 20 years The role has taken time to gain traction and is still most prevalent in Finance Services, Energy and Commodity businesses 2008 crisis and corporate governance changes resulting have raised the CRO profile. CRO’s are rarely Board-level appointments. The majority are senior executives reporting to the CEO and/or risk committee.

5. Evolving role of the CRO? Has anything really changed since 2005?

6. The CRO’s challenge?

7. Its about “Change management” “Many organisations have learnt that the introduction of risk processes is insufficient to fundamentally change behaviours… To encourage desired behaviours often requires a campaign of change management… CRO’s and Heads of Risk should be facilitators with an ability to influence change in risk-related behaviours.” This implies a different skill set to that held by many current risk professionals

8. IRM Professional standards IRM have defined functional professional standards against 4 competency levels: Leadership Senior Management Support IRM have also defined 6 behavioural competencies Courage and confidence Influence and impact Integrity, ethics and values Innovation and catalyst Building capability Collaboration and partnering

9. What does a CRO therefore look like? Senior-level executive capable of contributing across a wide range of business issues Not necessarily an expert on all areas of risk or someone able to model risks Someone who gathers an excellent team of risk experts and professionals around them With the ability to challenge management when necessary Someone with the CEO’s ear Gravitas and credibility with peers Overall - a communicator and a facilitator

10. What about the missing ingredient? Gravitas? Communication? Consultative style? Stakeholder management? Marketing?

11. Any questions? Alex Hindson Chief Risk Officer Argo Group P +44 (20)