ASSESSING THE CRO

An Interview Guide

A Whitepaper by Shane Phillips Consultants

ORGANIZATIONAL FIT

IS ASSESSED AT THE INITIAL STAGE OF THE INTERVIEW WHEN “BREAKING THE ICE” PAGE 6

TECHNICAL EXPERTISE

EXPERT KNOWLEDGE AND HANDS ON EXPERIENCE ARE ESSENTIAL ELEMENTS TO BE FOUND IN A CRO’s TOOLBOX PAGE10

ANALYTICAL THINKING

THE IDEAL CRO WOULD USE DATA TO QUESTION, INFORM, AND SHAPE HIS/HER PERSPECTIVE PAGE 13

COMMERCIAL ACUMEN

THE CRO MUST POSSESS AN ABUNDANCE OF COMMERCIAL SAVVINESS OR “STREET SMARTNESS’ TO STEER ORGANIZATIONS AWAY FROM PITFALLS PAGE 14

CONTENTS

Pg. 3 ASSESSING THE CHIEF RISK OFFICER WHO COULD BECOME THE CHIEF ARCHITECT OF YOUR ORGANIZATION’S FULL SPECTRUM OF RISK PRACTICES ACROSS YOUR ORGANIZATION

Pg. 6 ORGANIZATIONAL FIT IS ASSESSED AT THE INITIAL STAGE OF THE INTERVIEW WHEN “BREAKING THE ICE”

Pg. 9 SENIORITY / ORGANIZATIIONAL IMPACT THE INTERACTION AND INTEGRATION OF THE CRO WITH OTHER SENIOR LEVELS IN THE ORGANIZATION DETERMINE HIS/ HER IMPACT AND THE WAY IN WHICH THE ORGANIZATIONS’ RISK PRACTICES EVOLVE

Pg. 10 TECHNICAL EXPERTISE EXPERT KNOWLEDGE AND HANDS ON EXPERIENCE ARE ESSENTIAL ELEMENTS TO BE FOUND IN A CRO’S TOOLBOX

Pg. 13 ANALYTICAL THINKING THE IDEAL CRO WOULD USE DATE TO QUESTION, INFORM, AND SHAPE HIS/HER PERSPECTIVE

Pg. 14 COMMERCIAL ACUMEN THE CRO MUST POSSESS AN ABUNDANCE OF COMMERCIAL SAVVINESS OR “STREET SMARTNESS’ TO STEER ORGANIZATIONS AWAY FROM PITFALLS

Pg. 16 TEAM BUILDING TO PULL TOGETHER INDIVIDUALS FROM VARIOUS DEPARTMENTS AND BUSINESSES TO ENGENDER A COMMON VISION

Pg. 17 LEADERSHIP

TO INSPIRE, TO MENTOR, TO CREATE A PROCESS OF TRANSPARENT SUCCESSION PLANNING

Pg. 18 VISION TO BECOME THE CATALYST AND ROLE MODEL THAT WILL NURTURE AN ORGANIZATION’S AIMS TOWARDS ACHIEVEMENT OF HIGHER ETHICAL AND MORAL STANDARDS

Pg. 20 COMMUNICATION EMPLOYING A STYLE THAT CONVEYS COMPLEX IDEAS TO SENIORS, PEERS AND SUBORDINATES IN AN EFFECTIVE AND CONVINCING MANNER

ASSESSING THE CHIEF RISK OFFICER

AN INTERVIEW GUIDE

IT IS NOT THE SLOWEST CAR THAT HAS THE BEST BRAKES, BUT THE FASTEST. Brakes are not intended to inhibit speed but to enable it. The best Chief Risk Officers do not inhibit a company from taking risk, they enable a company to take more risk but in a safe and controllable manner. They apply the same

principles of control that brakes provide to a speeding vehicle.

Any growth strategy is laden with risk. Financial returns without risks are a rare find, so if you want to outpace the market, if you want to have the fastest growth rate in your industry, just like the racing car that needs the best brakes, you need to make sure that you hire the industry’s best CRO.

I’ve served the banking industry for over 25 years and the core of my training and experience has been in the area of risk management. Consequently, I’ve been extensively involved in assessing candidates for

risk positions and at other times was myself seeking a senior role in the industry. As the role of a CRO is a highly specialized one it requires the most rigorous assessment process.

It’s no rocket science to conclude that the financial crisis of 2008 unequivocally confirmed the break

down and failure of the risk management practice to a large extent. And shockingly, this has continued.

More recent cases of inadequate risk practices have led to bank failures and even the largest and oldest

global banks who were once considered as the pillars of success and role models of the financial world

have openly accepted fault, and have agreed to pay record fines to authorities, evidencing the continuation of inadequate risk practices that plague the industry.

One of the main reasons for these debacles, I suggest is that the majority of banks still do not use a thorough selection process when hiring risk professionals. Secondly, even when they do hire the right risk professionals, their systems still fail because the job holder in many cases is not adequately empowered to exert the influence that is necessary to fulfill the role. Thus, the industry as a whole is very likely to continue to stumble along and flounder from one blunder to another unless strong risk practices are brought back into play. The key stakeholders (shareholders, customers, and employees) deserve a better deal and risk practices in banks must improve to reverse the trend of large financial losses that spring up in the news almost on a weekly basis leading to tumbling share prices, large job cuts and the resultant spiraling effects on economies.

It is with this in mind that I have developed the following CRO Assessment Guide which aims to focus on providing a set of robust rules and a roadmap for employers to enable them to select the best individuals from among a number of candidates for this crucial and expanding role. This paper emerges after conducting several screening interviews with CROs and from my deep interest in the risk field, an area in which I have spent a lifetime.

This guide is ideal for the Chairman, the Vice Chairman, the Chief Executive Officer, and the Chief Human Resource Officer who is hiring a CRO. It can also be an effective training tool for Chief Risk Officers who are preparing for their own interview process.

This paper brings into focus two essential elements of the process involved in selecting the best candidate. The first step is to assess the organization which is seeking to fill the position. The second step, which I refer to as the “Technical Based Interview” is focused on the candidate, and consists of 9 sub-steps involved in the selection process. Finally at the end, four more key areas are briefly described that would encompass a comprehensive assessment of the candidate to achieve the best possible hire for the organization.

EVEN WHEN THEY DO HIRE THE RIGHT RISK PROFESSIONALS, THEIR SYSTEMS STILL FAIL BECAUSE THE JOB HOLDER IN MANY CASES IS NOT ADEQUATELY EMPOWERED TO EXERT THE INFLUENCE THAT IS NECESSARY TO FULFILL THE ROLE.

ASSESSING THE ORGANIZATION

Before diving into the steps of the Technical Based Interview with the candidate, it is essential that we take a moment to assess the organization that is seeking to fill the position of a CRO. Many people feel that assessment starts with the candidate who is applying for a CRO position.

This is the most common approach used by most recruitment firms. I would argue that to be a more effective process the assessment should actually start with the company which is offering the position, and most particularly an assessment of the risk appetite of its CEO and the Board. This should include a clear understanding of the vision, direction and strategy of the business, and the extent to which these aims can be impaired in the absence of a vigorous risk management function within the firm. A risk is an event which inhibits an organization from achieving its objectives. So before any candidate assessment can be made, an assessment of the company must be completed first.

Generally, a Board consists of 5 to 12 executives each characterized by his/her own risk tolerance. The Chief Executive Officer will also have his own personal risk appetite and together with the Board and all the senior executives, will dictate the tolerance level for the company. The more ambitious the vision the more risk the senior leadership team will be expected to take and vice versa. Therefore, it is pertinent to take into account the vision of the company and its desired risk level when deciding what type of CRO is appropriate for an organization.

THE TECHNICAL BASED INTERVIEW

The initial assessment of a CRO and the first step in the process, which I refer to as the “Technical Based Interview” starts with 9 key areas which are:

I start with organizational fit since one has the opportunity to assess fit at the initial stage of the meeting when “breaking the ice” with the candidate. I choose to assess Seniority / Organizational Impact next as this immediately provides an overview of the candidate’s current role and the breadth and depth of responsibilities and authority. I then move onto Technical Expertise which is paramount to the role of the CRO. The rest of the key competencies are then explored in detail.

(Pic with the 9 critical areas)

The 9 critical areas this assessment looks at are:

  1. Organizational Fit
  2. Seniority / Organizational Impact
  3. Technical Expertise
  4. Analytical Thinking
  5. Commercial Acumen
  6. Team Building
  7. Leadership
  8. Communication Style
  9. Vision

ORGANIZATIONAL FIT

“ORGANIZATIONAL FIT IS ONE OF THE MOST CRITICAL ELEMENTS IN ACQUIRING ANY NEW TALENT…. BUT IF THEY ARE ‘MISMATCHED’ ORGANIZATIONALLY, THE CHANCES ARE MUCH GREATER THAT THEY WILL STRUGGLE…” – KIM W. NOVELL, SVP, Human Resources

WITH SO MANY INDIVIDUALS looking for new opportunities, it is important to select new hires that are a good fit for the organization.

Finding the right individuals whose vision matches the direction of the organization is not easy. However once found, these individuals are likely to stay with the organization for a long time, are more productive and more engaged. A quote from Kim W. Nowell, SVP, Human Resources, Direct General Corporation sums it up best – “Organizational Fit is one of the most critical elements in acquiring any new talent. A candidate may possess the technical skills that are being sought, have the perfect educational background and come highly recommended, but if they are ‘mismatched’ organizationally, the chances are much greater that they will struggle…”.

By finding the individuals who are a good fit, you find individuals who are a “motivational match” for the position available. Frank Ciccia, the founder of the Illuminare Leadership Consulting Group, and Professor at MBA School of Management at University of Buffalo has identified 5 major components that are the bedrock of organizational fit. Benefitting from his work, I’ve added another dimension which I find very essential, and that is Collaboration and Support. These 6 Cs are:

For an organization seeking to fill a senior position such as that of a CRO, they must ask themselves certain relevant questions as it embarks on this endeavor. The interviewer should be familiar with the real culture of the organization.

By this, I do not mean the flowery language that is written in the HR policies of organizations but in fact the values that are conspicuously observable in day to day interactions of the staff between themselves, between their subordinates and their superiors.

Once this is understood to an appropriate degree the interviewer is able to determine what the true organizational values are and how closely they match the values of the candidate. Is the environment one that will increase this person’s productivity and does the organization provide opportunities to keep the employee engaged?

Another very important element is the challenge that the job offers to the candidate. The job must be challenging enough and with sufficient stretch objectives built into it. However, all too often organizations fail to provide enough support to help employees meet their challenges. The organization must examine its approach in this regard and assess from time to time the extent of collaboration and support it provides its employees to enable them to meet the challenges they face.

ANOTHER VERY IMPORTANT ELEMENT IS THE CHALLENGE THAT THE JOB OFFERS TO THE CANDIDATE. THE JOB MUST BE CHALLENGING ENOUGH AND WITH SUFFICIENT STRETCH OBJECTIVES BUILT INTO IT.

Given that support is provided, the organization has to assess in the interview whether this individual can “raise the bar” and take your organization to the next level. Are you looking for a change agent or someone who is going to champion your organization’s best practices? Either way the organization must be prepared to support either initiative and provide a collaborative environment to execute the desired strategy.

In the interview process the candidate would be assessed to determine his/her ability and willingness to deliver on these expectations. It is vital that the candidate is able to demonstrate both the ability and the willingness to do the job. It is here that the credentials or credibility of the candidate are examined, i.e. the skills, the educational background, and the knowledge he/she possesses that is considered to be “of value” to the organization, and indeed, the person’s character, which bring out traits such as trustworthiness, empathy, passion, and ethos.

Invariably, when the organization weighs the importance of this position to its future direction and strategy, the question of compensation arises. For example, do you expect people to work for you for life or do you expect people to work 2 to 3 years and then move on? What type of risk capability do you want to develop? So spend the time to ensure that the value of the job to your organization matches your compensation structure, and only then can you ascertainably assess the worth of the candidate.

Finally, how does your organization demonstrate commitment? Commitment goes both ways. Today’s employees are looking for development and a fulfilling career path, and those organizations which offer rich learning environments are prone to attract the best talent. At the same time an employee needs to show commitment to the organization.

With any relationship, there needs to be growth. What plan does the organization have to continue developing the individual who assumes the position? Is there growth potential by way of career progression, more challenging work, or expansion of the job role?

If there is apprehension on the candidate’s part of accepting the position, or the organization to offer the position to the candidate, it is usually because one or more of the 6 “C’s” mentioned above does not match.

THE ORGANIZATION MUST USE A COMPENSATION STRUCTURE THAT IS ALIGNED WITH ITS OVER ARCHING VISION AND STRATEGY.

Here are some questions to ask of potential new hires to determine if they are a good fit for what the organization is able to offer them. The responses to these questions will provide you insights into what motivates and engages the individual to do a job well. I have mentioned the trait being assessed in brackets next to the question.

What was the particular situation and why did you not find it satisfying? In such a situation are you more likely to motivate yourself to continue to collaborate or are you likely to distance yourself from the project? (challenge/collaboration/ credentials)

What goals have you accomplished? How has your organization helped you to achieve those goals? (challenge/collaboration)

collaboration/commitment/compensation)

SENIORITY / ORGANIZATIONAL IMPACT

THE FIRST CRO IN THE WORLD was hired by GE Capital in 1993, a man by the name of Mr. James

Lam. The CRO position is therefore relatively new and resultantly often loosely defined. Responsibilities

can vary from one Chief Risk Officer to the next and we cannot assume that just because someone

is currently a CRO they are capable of performing at the level we require.

JAMES LAM,

First CRO in the world

The first thing one has to do is assess how senior the individual is who is applying for the position. Generally, this can be tested by the individual’s reporting line, committee seats, board positions, etc. Does the CRO have ultimate authority and accountability for major decisions or are tough decisions escalated to a Group CRO in head office?

The level of seniority achieved by an individual in a risk position in an organization is most often a direct function of the significant role that he/she has played in the transformation and development of risk practices in the company. The starting point for the assessment is the reporting lines and understanding exactly where the CRO in question sits in the organization. I have listed some suggested questions below:

(Wholesale, Retail, and Financial Institutions) / Credit Administration / Remedial Management / Regulatory and Compliance Division)

TECHNICAL EXPERTISE

NEVER BECOME SO MUCH OF AN EXPERT THAT YOU STOP GAINING EXPERTISE. VIEW LIFE AS A CONTINUOUS LEARNING EXPERIENCE AND YOU WILL AVOID THINKING LIKE AN EXPERT. – DENIS WAITLEY

THE CHIEF RISK OFFICER MUST BE VIEWED as a pillar of expertise in his/her field and must have commanding knowledge of their subject matter. He/she must possess deep specialized knowledge complimented by a wealth of experience. The CRO must understand the local and regional legal and regulatory idiosyncrasies of each region he/she is responsible for and should be able to discuss the differences off the top of his/her mind. Not understanding these issues can prove disastrous.

As much as possible CROs must also be sufficiently networked with the top professionals in the legal and regulatory environment of the territories for which they are responsible to ensure that they are aware of evolving policy changes that could significantly impact the organization’s business outlook.

Through this knowledge they must be able to play a key role in navigating an alternative course for the business and mitigate its risk exposure. Denis Waitley, a renowned motivational speaker, a prolific writer and the author of 14 books amongst which is his best seller “The Psychology of Winning” said in one of his sessions when mentoring a roomful of Fortune 500 top executives “Never become so much of an expert that you stop gaining expertise. View life as a continuous learning experience and you will avoid thinking like an expert”.

The CRO should intuitively know which key performance indicators to keep an eye on and which types of reports senior management should be reviewing in order to ensure the organization has the right red flag mechanisms in place to detect negative events at an early stage.

A KEY COMPONENT TO ANY RISK AGENDA IS THE ABILITY TO CONSTANTLY ASSESS AND MONITOR THE ORGANIZATION’S EXPOSURES AND RISKS.

The best CROs will not have to pause and think deeply about which KPIs they would use or which management reports are most important. They should have a clear blue print in their minds about how to create a risk infrastructure and possess the increased level of sophistication that allows them to be prepared to swiftly address new risks as soon as they are identified. Assessing technical expertise is therefore pivotally important and requires asking several deep and probing questions.

TECHNICAL EXPERTISE

Technical Expertise Sample Questions

Regulatory and Compliance Risk related questions

Operational Risk related questions

Credit Portfolio and Market Risk related questions

Governance and Risk Framework questions

ANALYTICAL THINKING

WHAT GETS MEASURED, GETS MANAGED – PETER DRUCKER

THE BEST CROs ARE ABLE TO SEE AROUND CORNERS and mitigate risks before they take place. Their ability to unearth trends and recognize patterns in the market allow them to stay clear of pit falls and avoid downside risks their competitors fall prey to. Rather than blindly following the most popular or loudest opinion, the ideal CRO would use data to question, inform, and shape his/her perspective. As aptly coined by the management guru Peter Drucker, “what gets measured, gets managed”.

THE CRO MUST CONSTANTLY BE ANALYZING AND SCANNING THE MARKET ENVIRONMENT FOR NEW RISKS AND APPLY THE VERY SAME ANALYTICAL APPROACH WITHIN THE ORGANIZATION TO UNEARTH RELATED RISKS.

They should have insights most others fail to have and have an exceptional ability to trouble-shoot critical areas in the organization.

Analytical Thinking Sample Questions:

IN GOD WE TRUST, ALL OTHERS MUST BRING DATA – W. EDWARDS DEMING

COMMERCIAL ACUMEN

THOSE WHO DO NOT REMEMBER THE PAST ARE CONDEMNED TO REPEAT IT. – GEORGE SANTAYANA

THE QUOTE ABOVE FROM THE RENOWNED Spanish philosopher George Santayana is a powerful one. However, to explain my point I would substitute “understand” for “remember.”

A CRO in today’s fast paced and volatile environment must possess adequate commercial savviness or “street smartness” without which an essential facet of their personality is missing.

If your company and especially those entrusted with managing risk in your organization don’t understand (and remember) past mistakes that have been made in your firm, those mistakes will most likely recur.

The CRO must be able to recognize blind spots, “see around corners” and understand where the pitfalls in the market could spring from. As markets change or client’s agendas drift, the CRO must be able to stave off downside exposures early on and help correct the organization’s position. A commercially savvy and wise CRO will be able to extrapolate a risk event in another industry to your own industry and be able to steer your organization away from possible danger. The best CROs have the pulse of the market at their fingertips, the foresight to see trouble ahead and the ability to stay clear of bubbles before they burst.

They must possess a deep understanding of their client’s counterparty risk and be able to identify secondary risks speedily. This can sometimes mean changing strategies mid-way and this will often find them locking horns with business heads. This ability is often referred to as the “gut feel”, by way of which an experienced CRO is able to predict with reasonable accuracy a future risk event, which others are unable to recognize.

A COMMERCIALLY SAVVY AND WISE CRO WILL BE ABLE TO EXTRAPOLATE A RISK EVENT IN ANOTHER INDUSTRY TO YOUR OWN INDUSTRY AND BE ABLE TO STEER YOUR ORGANIZATION AWAY FROM POSSIBLE DANGER.

The experienced CRO can thus bring structure to the not so conspicuous, seemingly unrelated tell tale signs, thus allowing the organization to be in an advanced stage of preparedness against future risks which have not yet happened.

The CRO should also have insight into where the organization will be driving its biggest revenue streams from and should know, for example, where a country’s GDP growth is coming from. If your credit portfolio is growing asymmetrically in relation to the market’s GDP growth it is most likely that you are heading into a serious problem.

A good CRO should know which metrics to look at and be able to discuss market trends in depth. For instance, a CRO who is able to correctly decipher the events leading to a bubble in the real estate market will take all the necessary steps to warn the business heads to course correct the direction of the front office by pulling back on continuing expansion in lending to the real estate sector, or by tightening lending conditions.

Commercial Acumen Sample Questions:

what did you do and what was the result?

TEAM BUILDING

IT IS BETTER TO HAVE ONE PERSON WORKING WITH YOU THAN THREE PEOPLE WORKING FOR YOU.

OFTEN DURING HIS/HER CAREER the CRO would have undertaken tasks and projects that require the support of people working across different levels in the organization. As a senior member of the management team the CRO must demonstrate the ability to pull together staff from various departments and business functions to enable completion of special projects and on an ongoing basis to engender a common vision.

It was Dwight D. Eisenhower who once said that it is better to have one person working with you than three people working for you. This statement from the 34th President of the United States unequivocally expresses the importance of working with people.

Henry Ford echoed the same message when he said “Coming together is a beginning. Keeping together is progress. Working together is success”.

History would witness that risk professionals who have been very talented, and those with excellent technical and analytical abilities, could not rise to fill the position of the CRO mainly due to their inability to demonstrably lead teams or groups. Risk management roles have generally been characterized by the overriding necessity for analytical skills overshadowing the need for building shared goals which is the essential need of the current environment. It is a crucial requirement of the modern day CRO to excel in this essential trait which will differentiate him/her from his/her peers and inculcate an energy and necessary spirit of cooperation to achieve the objectives of the organization.

Team Building Sample Questions:

LEADERSHIP

CONTROL IS NOT LEADERSHIP; MANAGEMENT IS NOT LEADERSHIP; LEADERSHIP IS LEADERSHIP. IF YOU SEEK TO LEAD, INVEST AT LEAST 50% OF YOUR TIME IN LEADING YOURSELF—YOUR OWN PURPOSE, ETHICS, PRINCIPLES, MOTIVATION, CONDUCT. INVEST AT LEAST 20% LEADING THOSE WITH AUTHORITY OVER YOU, 15% LEADING YOUR PEERS, AND 15% LEADING YOUR SUBORDINATES.

– DEE HOCK.

HEADING A DEPARTMENT which can literally make or break a bank requires leadership. The CRO must have the gravitas and pedigree to command the respect of the team complimented by a commanding knowledge of risk and controls. They are a critical factor in mobilizing people to follow a new direction. As aptly said by Rosalynn Carter: A leader takes people where they want to go. A great leader takes people where they don’t necessarily want to go, but ought to be. The CRO must be effective at making impactful decisions and intuitively know the vision of the organization. An essential part of a CRO’s leadership role is Mentoring and Succession Planning. The first couple of questions below are a great way to get an idea about someone’s operating style. For example; if you are very punctual then your co-worker who is notoriously tardy will drive you crazy. Your least favorite person is often your anti-thesis to your own modus operandi, thus the candidate can unknowingly describe themselves to you. The third question immediately gives the candidate the opportunity to assess his/her level of leadership. And then, when followed by specific questions, this will allow you to verify whether his/ her own assessment is accurate.

Leadership Sample Questions

VISION / STRATEGY

THE MOST PATHETIC PERSON IN THE WORLD IS SOMEONE WHO HAS SIGHT, BUT HAS NO VISION.

– HELEN KELLER

THE CRO IS OFTEN VIEWED AS THE NEMESIS OF THE FRONT OFFICE, but the best CROs are commercially minded individuals with a clear view of how to balance revenue growth while maintaining an acceptable risk appetite.

This often requires an individual who is more commercially savvy and tuned to the macro and micro-economic trends than the pedestrian masses. Those CROs operating in the top 10% of their profession will invariably push and pull their organizations in and out of key sectors and sub-niches ahead of receding profit pools.

They will intuitively know when it is time to get out of certain relationships or when their policies and procedures should encourage the institution to deepen their relationships in a specific area.

They will also have the courage to speak out vociferously against bad practices and adverse internal trends to protect the organization from damage. They will be catalysts and role models that nurture an organization’s aims towards achieving higher ethical standards and moral conduct.

The majority of CROs will not be visionaries and most will not have led a new agenda. Generally, this skill has not been cultivated within the lower ranks of the risk department and thus is not a common skill among CROs when they assume this role.

However, this will change as the risk profession matures and continues to become a core component of expanding business enterprises. The timing of this is here and now and some would say it is already far too late when risk events caused by deliberate breaches of regulations, undetected internal frauds, and synchronized market manipulation at some of the largest financial institutions in the world have become commonplace.

Resultantly, they have had to pay hefty fines breaking all previous levels, and most of them taking the hits in 2012.

These events not only undermine the credibility of these organizations but also lead to a much larger debate as to their role in society. While their brand imaging focuses on Corporate Social Responsibility in their TV, billboard and magazine ads, and while many of them sponsor socially important events and provide assistance to charities etc., do they have adequate internal control measures that foolproof their systems from bad internal practices that lead to significant financial losses and loss of brand image?

LEADERS MUST INVOKE AN ALCHEMY OF GREAT VISION.

– HENRY KISSINGER

Over time, these issues left on the way side will destroy shareholder value and can even bring down

an organization completely. Helen Keller’s quote that “the most pathetic person in the world is someone who has sight, but has no vision” rings so true when such events are witnessed.

Vision / Strategy Sample Questions:

COMMUNICATION STYLE

“DEVELOPING EXCELLENT COMMUNICATION SKILLS IS ABSOLUTELY ESSENTIAL TO EFFECTIVE LEADERSHIP. THE LEADER MUST BE ABLE TO SHARE KNOWLEDGE AND IDEAS TO TRANSMIT A SENSE OF URGENCY AND ENTHUSIASM TO OTHERS. IF A LEADER CAN’T GET A MESSAGE ACROSS CLEARLY AND MOTIVATE OTHERS TO ACT ON IT, THEN HAVING A MESSAGE DOESN’T EVEN MATTER.”

– GILBERT AMELIO, PRESIDENT AND CEO OF NATIONAL SEMICONDUCTOR CORP.

ONE OF THE MOST EFFECTIVE COMMUNICATORS in business is Gilbert Amelio, President and CEO of National Semiconductor Corp, author of 3 best sellers, currently on the Board of several tech companies, and an ex-CEO at Apple Computers who says “developing excellent communication skills is absolutely essential to effective leadership. The leader must be able to share knowledge and ideas to transmit a sense of urgency and enthusiasm to others. If a leader can’t get a message across clearly and motivate others to act on it, then having a message doesn’t even matter.” Nothing can be further from this truth.

Good communicators will focus on communicating downward to subordinates with at least the same care and attention as they would do to communicate upward to superiors. As a key member of the senior executive leadership team it is paramount that the CRO is able to communicate effectively. Where the role reports to the Board the CRO must possess the communications skills to create influence and build consensus at the Board level. Their ability to handle high pressure situations with finesse and bring conflict to swift closure are quintessential tools of the job. Often enough a CRO may find himself/ herself in the midst of a heated argument in a committee meeting or become the object of a front office attack. These situations call for calm, resolute and firm responses from the CRO abiding by the rules of good conduct. His/her focus must remain on continuing the dialogue to attend to the critical issues impacting the organization and much less on the personalities or personal agendas.

Furthermore, it is critical that the CRO has the innate ability to mentor and effectively champion the necessary knowledge transfer the organization requires thereby contributing effectively to succession planning.

REGARDLESS OF THE CHANGES IN TECHNOLOGY, THE MARKET FOR WELL-CRAFTED MESSAGES WILL ALWAYS HAVE AN AUDIENCE.” — STEVE BURNETT

In assessing the communication skills of a CRO, I would start with an open question before leading into the more probing questions that will allow the interviewer to obtain feedback on how the candidate will handle specific situations.

Communication Style Sample Questions:

SUMMARY

This completes the 9 steps under the Technical Based Interview process. As you can see this is a very thorough process and requires a professional approach. The duration of such a comprehensive interview may take as long as 2 hours or more to complete. As you would have observed, the largest amount of time is taken under the “Technical Expertise” section. This is a deliberate necessity since it is this area that determines the compatibility of the candidate to the depth and breadth that the job requires. Many of the questions described in this paper also provide deep insight into the candidates thinking style, approach and personality. For example; asking “what is the toughest thing about management” actually tells you what the candidate’s biggest management weakness could be. Of course if you ask the candidate what is his/her biggest weakness they may be reluctant to tell you what it is. However, if they say the toughest thing about management is aligning the team or dealing with conflict, or letting people go; you are actually gaining significant insight into their weaknesses unless in their delivered response they are able to demonstrate how they were able to successfully overcome the difficulty when directly faced with it.

Also key in the assessment is not so much what the candidate is saying but how they are saying it. 80% of our communication is non-verbal and the assessment professional must have a keen eye for the subconscious clues the candidates give us. Finally, the biggest opportunity to assess the candidate is after the interview is over, simply walk the candidate to their car. Often, once the candidate is out of the building they let their guard down and start acting more naturally. The effect of having finished the interview and having physically left the building gives them the feeling that the interview is over. They often begin to speak more casually with you and will give you great insights into their life, personality and personal goals. This is great information and an opportunity one should never miss. It is at this time you can ask them about their interest in sports for instance from which you may garner whether the company provides his / her family a corporate club membership, etc. which enables the candidate to be socially connected and networked with people of influence in various fields and industries.

Following the completion of the above interview process the final steps in completing a holistic understanding of the candidate involves the following additional components:

In closing it is difficult to summarize the initial assessment of a C-Suite executive but I hope I have added some structure around the first step in a methodical and regimented selection process. Should you require some advice or guidance regarding your own CRO selection process, Shane Phillips Consultants would be delighted to help. Please feel free to contact me directly at my address below.

AKBAR KAZMI – Head of Risk, MENA

With over 25 years of banking experience, Akbar brings the seasoned eye that only experience can foster. Starting his career with Chase Manhattan Bank in 1983 Akbar has worked his way through every position in the Corporate, Institutional, and Private Bank. Mentored in global best practices from brands such as Standard Chartered Bank, Akbar brings a wealth of knowledge to any client interaction. With the lion’s share of his career spent in the Middle East, Akbar intuitively understands the subtle yet powerful undercurrents of the GCC. Knowing both your business and the region allows him to find that perfect fit and with a quarter century of banking experience his personal network is unrivalled in the Gulf.

As the former Deputy Head of Risk for National Bank of Dubai, Akbar has developed Risk frameworks, processes and methodologies from scratch. Whether it’s your organizational structure, risk protocol, or the talent in the Risk department that you are concerned about, Akbar is able to create a bespoke actionable solution for your needs. He is well positioned to deliver outstanding service in the areas of Executive Search, Training & Development and Mentoring.

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