Can we appoint chief risk officers for the city corporations?

The fire incident at the Green Cozy Cottage on Bailey Road on 29 February has brought to light several persistent issues that have concerned us all. The noncompliance with building codes and misuse of commercial spaces in the city has become apparent, especially with the loss of 46 lives on that day. 

Over time, we have noticed recurring incidents happening in various parts of the country or city. These incidents could involve acts of violence, sexual harassment, or fires. 

For instance, accusations against teachers at Viqarunnisa Noon School, Dhaka University, and Jahangirnagar University coincided. Following the Bailey Road fire, there were fires at a restaurant in Wari, Gausul Azam Market in Nilkhet, an under-construction cold storage in Chattogram, and Chakaria area in Cox's Bazar, all within the next two days. 

This suggests that we are vulnerable to potential risks all the time, but only become aware of them when they happen. Once the crisis has passed, we tend to overlook it since something new always happens.

The people of the country are vulnerable to many dangers, emanating from rapid industrialisation, population growth, saltwater intrusion, floods, erosion, and droughts. 

While we have learned to survive many of these hazards, we must increase our preparedness for other risks, such as fire, building safety, road safety, theft, and fraudulence. We need to take immediate and effective measures to address these issues, as they pose a significant threat to the safety and well-being of our citizens. 

We may consider appointing a Chief Risk Officer for our city corporations. Having a Chief Risk Officer for a city is a relatively new concept. It involves selecting an executive responsible for efficiently and effectively governing significant risks and related opportunities across different city administration segments. 

In 2022, Lori E. Lightfoot, the Mayor of Chicago, USA, appointed Stephen A. Skardon as the city's chief risk officer. He had previously served as acting chief risk officer, overseeing the city's first-ever enterprise risk assessment. 

Every organisation must identify and manage risks in today's fast-paced world. The risks can be classified into five categories: strategic, reputational, operational, financial, or compliance-related. 

The Chief Risk Officer (CRO), also known as the Chief Risk Management Officer (CRMO) or Chief Risk and Compliance Officer (CRCO), can perform similar roles for city corporations and oversees the city's enterprise risk management.

In the case of city corporations, the CROs will be responsible for developing and maintaining a comprehensive risk management strategy to safeguard the city's assets, operations, and citizens. They will identify and assess potential areas of risk exposure for city corporations, their contractors, and agents. 

They will conduct regular risk management reviews, which may involve investigations, physical inspections of facilities and analysis of losses incurred. They will also maintain personal contact with government officers and co-workers, and review data and records upon request. 

CROs will assist all city departments and relevant agencies develop a management plan to identify, achieve, and maintain acceptable loss levels and treat and finance exposure to such loss. The plan may include recommendations for insurance coverage. They also identify and recommend modifications to any city operation or facility that poses an actual or potential hazard to the public and advise city departments on implementing such modifications. 

To further enhance the city's risk management goals, CROs will collaborate with public and private agencies and organisations to conduct joint investigations into and research methods for identifying areas of risk exposure, risk avoidance and reduction, and methods for addressing exposure that cannot be avoided or reduced.

Above all, the CROs will perform any other duties related to risk management as requested by the mayor and take any necessary actions to mitigate risk and advance the city's risk management goals. 

CROs will also promote a risk-awareness culture across the city and embrace technological advancements to deliver an efficient risk function and an improved understanding of the sources and causes of risks.

Ensuring citizens' safety and well-being should be city corporations' top priority. To achieve this goal, city corporations should proactively identify and mitigate risks to create a secure environment. By appointing Chief Risk Officers (CROs), city corporations can take a proactive approach to risk management and ensure the safety of city dwellers. 

Shafiq R Bhuiyan is a senior manager of communication and CSR at BRAC Bank PLC.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.