The Characteristics of Firms That Hire Chief Risk Officers

Journal Article (Journal Article)

We examine the characteristics of firms that adopt enterprise risk management (ERM) and find support for the hypothesis that firms adopt ERM for direct economic benefit rather than to merely comply with regulatory pressure. Using chief risk officer (CRO) hires as a proxy for ERM adoption we find that firms that are larger, more volatile, and have greater institutional ownership are more likely to adopt ERM. In addition, when the CEO has incentives to take risk, the firm is also more likely to hire a CRO. Finally, banks with lower levels of Tier 1 capital are also more likely to hire a CRO. © The Journal of Risk and Insurance, 2011.

Full Text

Duke Authors

Cited Authors

  • Pagach, D; Warr, R

Published Date

  • March 1, 2011

Published In

Volume / Issue

  • 78 / 1

Start / End Page

  • 185 - 211

Electronic International Standard Serial Number (EISSN)

  • 1539-6975

International Standard Serial Number (ISSN)

  • 0022-4367

Digital Object Identifier (DOI)

  • 10.1111/j.1539-6975.2010.01378.x

Citation Source

  • Scopus