Governance and chareholder response to chief risk Officer appointments
This study examines the recent, significant growth in the appointments of Chief Risk Officers (CROs), the role of a CRO, and whether such appointments benefit shareholders. We find that the market is more likely to react positively to a CRO appointment for a firm with weak corporate governance. In particular, the lower the proportion of outside directors the greater is the likelihood of a positive market reaction to CRO appointments, suggesting that CRO appointments are associated with better future governance by firms shareholders. Finally, firms with higher tax and product risk also experience increases in stock prices when they appoint CROs.
Chief Risk Officer, ERM, Governance, Risk management
Gupta, Manu, Puneet Prakash, and Nanda Rangan. "Governance and shareholder response to chief risk officer appointments." The Geneva Papers on Risk and Insurance-Issues and Practice 37, no. 1 (2012): 108-124.
Geneva Papers on Risk and Insurance: Issues and Practice