You probably know what a CEO (chief executive officer) is, and you may have learned what a CFO does (that's "chief financial officer"). Maybe you know about COOs (chief operating officers) and even CIOs (chief information officers, generally in charge of a company's technology operations). There's a new bigwig on the block, though -- meet the CRO, the "corporate responsibility officer."
According to a recent HRO Today article, the CRO position addresses an existing market reality:
Stakeholders want accountability. By stakeholders, we mean customers, employees, vendors, creditors, stockholders, government and the media. And for large companies, there has to be one throat to choke. That's why Sarbanes-Oxley requires CFOs and CEOs of public companies actually sign off on their periodic financial statements. The signatures are the equivalent of a personal guarantee, just like when you borrow money at the bank.
Securities and Exchange Commissioner Cynthia Glassman has explained that to do right by Sarbanes-Oxley, companies should have corporate responsibility officers overseeing corporate compliance and ethics issues. The Wall Street Journal's CareerJournal.com cited some characteristics of the job that she listed:
- "Sufficient seniority and authority to take the actions necessary under the circumstances -- including the worst-case scenario.
- "The full support of the chief executive officer and senior management, including a direct reporting relationship.
- "The ability to report directly to the board of directors -- for example, to the audit committee chairman -- on matters of significance to the company or matters involving misconduct by senior management.
- "Sufficient time and adequate resources to implement the company's corporate responsibility program effectively."
CRO responsibilities are often a part of another job, so expect some CROs to do double or triple duty on the executive roster.
The advent of the CRO should be at least a partially good thing for investors. It will cost firms to maintain the post, but if the CRO can find and stop bad behavior, it could prevent future losses.
Here are a few of the companies creating CRO posts:
If you'd like to learn more about these firms, check out these recent Fool articles:
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- Wal-Mart: Still a Bargain
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- Schwab: Discount Broker, Expensive Stock