Banks' Risk Officers at Risk

But potential problems occur at companies when a so-called line-of-business manager is "so powerful that they undercut the authority of the CRO," says Blakely, a former chief risk officer at KeyCorp(KEY Quote).

Problems can also occur if poor or insufficient information gets in the hands of the business managers making those decisions or if the managers are incented in the wrong way, like revenue growth instead of the risk/return of their businesses, he adds.

"For every chief risk officer that has failed, there is somebody else that is culpable too," Blakely says. "The [job of the] chief risk officer is to try and help manage that risk, but it's the line of business that actually takes the risk."