Chief Resilience Officers Enter Boardrooms as Global Risks Climb

Companies today are navigating global conflict, rising costs and inflationary pressures, geopolitical tensions impacting supply chains, shifts in employee and consumer behavioral patterns post-pandemic, and sudden adverse climate events. These are just some of the issues causing disruption.

A volatile, uncertain, complex, and ambiguous world is the new normal. Companies today face the prospect of creeping crises (that develop gradually and imperceptibly), converging crises (two or more crises coming together in a perfect storm) and compounding crises (where one crisis leads to another).

The current landscape has put crisis management and resilience firmly on the corporate agenda. Crises often come with legal, regulatory, and reputational risk—leaving boardrooms only limited time to react. Organizations are therefore constantly looking to evolve and improve how they prepare for and respond to crises. The effectiveness with which organizations manage crises can be the difference between survival and class action lawsuits, fleeing investors, or a loss of key customers.

Resilience is the ability of an organization to respond to and recover from these adverse events, and organizations are increasingly looking for a quarterback in this space.

Currently, the task of responding to fast-evolving global events and crises typically falls on a patchwork of individuals coming together from traditional business functions such as HR, risk and compliance, legal, communications, finance, and IT. Companies that resolve global crises most effectively are able to quickly coordinate cross-functional teams that span geographies and business units, and can facilitate barrier-free access to key decision-makers in times of crisis.

Coordination is key, and for this reason, companies are increasingly seeing the benefit of having a chief resilience officer in place. Organizations can never predict and prepare for all situations, and companies must therefore be proactive and agile in their response to crises.

A CRO can help an organization achieve adaptability to withstand shocks. CROs look beyond the boundaries of traditional risk mitigation and instead build resilience systems, ensuring that their organizations are equipped to thrive when faced with adverse circumstances.

The Rockefeller Foundation, as part of its 100 Resilient Cities initiative, describes the CRO (in the context of cities) as an innovative position in government that ideally reports directly to the city’s chief executive and acts as the city’s point person for resilience building. Christchurch in New Zealand, Medellin in Colombia, San Francisco, and Jacksonville, Fla., are examples of cities that have created a CRO position to manage response to sudden crises and long-term adverse changes.

NASA has one, too—a role that is responsible for managing the agency’s response to and implementation of requirements related to the pandemic, as well as its Future of Work program, and its pilots, policies, and strategies to promote innovation and a hybrid workforce.

Boardrooms are increasingly beginning to embrace the importance and value of having a CRO in place. Companies are becoming more global, supply chains are longer and more fragmented, and customer and stakeholder engagement is at the highest level it has ever been. This means CEOs now prioritize business and reputational risk over other risks.

In the corporate context, CROs not only study risks, but also explore ways to use them for additional benefit, either for the organization itself or for the community. For example, in the context of cities, a CRO might devise a flood barrier to protect against climate change risk, but would also identify a way to develop it so that it serves as a bike or walking path. In other words, a CRO would be responsible for studying the changing landscape from a risk lens, but also consider ways that these risks may present opportunities to strengthen the business infrastructure.

From a business perspective, a corporate CRO faced with a “quiet-quitting” crisis among employees might hand out retention bonuses, while working to create systems that improve employee well-being and long-term engagement. By fostering this culture at the intersection of preparedness and value creation, a CRO can help an organization succeed.

To achieve all this, the CRO will need to coordinate across all the silos in an organization. Rather than being a vertical business function, CROs work horizontally across all business units, reporting to the CEO. Meta Platforms, Inc., for example, has a strategic response team whose job is to coordinate complex, important, and urgent projects across functions and lead a response strategy on the company’s most pressing and complex issues. A CRO’s goal would be to create an environment where employees across all functions are empowered to contribute to the organization’s overall elasticity.

Transformative times require transformative thinking. One might envision a CRO as a generalist, with experience in government, military, or multinational corporations and far-reaching interests that include strong communication and coordination skills. This broad and agile skill set is crucial to a company’s offensive and defensive toolkit.

In today’s global business climate, companies need to incorporate resilience in their survival tool kits. CROs wouldn’t only help to weather the inevitable storms of uncertainty, but would also help their organizations emerge stronger on the other side. As organizations continue to wrestle with an evolving array of challenges, the appointment of a CRO is not just a strategic decision, but a crucial step toward building a more resilient future.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Saqib Alam is partner with Morrison Foerster’s crisis and risk management team.

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