5 ms·

this is incredible. As chief risk officer, going into a public company that goes bad not even 2 months after being hired -for strictly risk mismanagement, not

this is incredible. As chief risk officer, going into a public company that goes bad not even 2 months after being hired -for strictly risk mismanagement, not fraud- tells you all you need to know about the competency of the person being hired. EDIT: Sincerely curious about downvotes: You are interviewing for a CTO job. As part of the process, you get unrestricted access to prod codebase. The stack/ libraries are something you are very familiar. You find out the software will be a critical component to make payments to people worldwide. Its a high profile project. You are the public face of the software that must go live very soon, no one can tell for sure, but its imminent. Your (interview) prep finds a dumpster fire. There's no way this thing will even run. The entire thing is not salvageable. Do you take the job ?

deleted 4y ago
[deleted]
causality0 4y ago
The best parachute in the world won't help you if you open it when you're ten feet from smashing into the ground.
- clownvorld 4y ago
  depends on the origin of said parachute
- csteubs 4y ago
  This. Better to pull the parachute than wait for the federal retrorockets.
lp0_on_fire 4y ago
Any organization of that size will have inertia and the damage was already done by the time they got there.
- jaycroft 4y ago
  I think the parent is saying that the new CRO is bad not because they caused the dumpster fire - the new CRO is bad because after interviewing in January, they saw the dumpster fire and either thought it didn't matter, or that they could fix it. Not a case of "incompetent because they couldn't fix the problem", instead a case of "must be incompetent because they saw the books but took the job anyway".
  - causality0 4y ago
    Do you have to be a bad risk officer to be willing to get paid to save whatever is possible to save even if the ship is sinking? Maybe because of them five percent fewer businesses will go under because of SVB.
hedora 4y ago
It depends on the terms of employment. Anyway, blaming the CRO / CTO for trying to put out a dumpster fire isn’t really productive. As for future employment. At least the current one tried to right the boat instead of jumping ship.
- IG_Semmelweiss 4y ago
  its not blame at all. Its competency. My point is that anyone competent would refuse to take the job. BY doing the opposite (taking the job) , the prospect hire is demonstrating that he/she (a) lacked the expertise to detect the dumpster fire, or (b) lacked the expertise to understand it was not salvageable (c) lacked the work-rate to do their due diligence (particularly for RISK management).
  - hedora 4y ago
    Pay me 20x market rate, and I’ll try to fix your cobol dumpster fire of safety critical murder spaghetti. I will need to add some liability clauses to your standard employment contract. That doesn’t mean I’m incompetent; just that people you should hire on those terms are hard to find. Anyway, I don’t have idea what happened here. The long time to fill the position also could have been because they were looking for a CRO that was better suited for a mushroom farm (kept in the dark + fed bullshit). The resume of the new CRO suggests it was the former, not the latter.
    - ThrowawayR2 4y ago
      Isn't the CRO and other CxO positions considered officers of the corporation by law? I'm under the impression that there isn't any kind of liability clause that would get a corporate officer out of hot water with regulatory bodies should they decide to pursue charges. If that's not correct, I'd love to be enlightened.
      - hedora 4y ago
        Presumably, they could make sure they got a personal copy of the books as they existed on the start day, so that any negligence charges would be directed at the prior CRO. Not a lawyer, but various CxO’s specialize in jumping in and trying to repair failing companies. I’m sure they’ve figured out how to shield themselves from personal liability if their new employer ends up laying of 100,000 people and crashing the global economy.
eddsh1994 4y ago
I think you seriously misunderstand the complexity of something like the 17th largest US bank along with its 8500 employees and global offices vs a code base. And if you're right, maybe they did know about the risk and were actively working on reducing it.
- kelnos 4y ago
  I agree with you, but probably in the opposite way you mean: I think it should be a lot easier for a CRO candidate to evaluate a bank's balance sheet than it might be for a CTO candidate to evaluate a large, sprawling code base. Evaluating a balance sheet and identifying risks is one of the primary qualifications of a CRO job, no?
  - travisgriggs 4y ago
    I dunno. Elon seemed to think he had things pretty figured out with Twitter's code base. :) But seriously, I'm amused by this thread. We always belittle or downplay the complexity of systems we barely understand. Every software engineer ever exposed to any non technical management, product managers, or sales people has experienced this in spades. You go blue in the face with frustration trying to explain why "seemingly simple things" just are not as simple as people want to believe they are. I've coded in mixed system designs for 30 years now. Experience has enabled me to see patterns I wasn't even aware to look for as a younger me. I see so much more and am available to evaluate so much more than ever before. But the most important thing that that "experience" has taught me is that this accrual of "experience" is not a convergent knowledge position. Sure, I see more than younger me's do, but I've also come to accutely embrace the notion that "the greater my sphere of knowledge, the greater my contact with the unknown." Complex systems like massive sprawling code bases are HARD. And so are highly intertwined economies.
dmn322 4y ago
Lots of people just aren’t in a position to be turning down jobs. If you want to judge people by the jobs they take, set up enough of a social safety net that reasonable people can’t get screwed by a short run of bad luck.
- kelnos 4y ago
  I don't think that statement applies equally well to your average employee as it does to a potential Chief Risk Officer at a fairly large bank. Totally agree with you in the general sense, but completely disagree when it comes to this CRO hire.
  - politician 4y ago
    CRO of a failed/failing/sanctioned bank is not a resume builder. The good ones will definitely bail ("ethics") before it becomes public.
SkyPuncher 4y ago
Not at this point in my career, but probably at some point in my career. Routine just becomes boring at some point. Once you have an established track record, it's far easier to justify (with creditability) that you decided to take on a ridiculous situation.
pbourke 4y ago
How golden is my parachute in this scenario?
- 411111111111111 4y ago
  It's pure gold, so you'll go splat at the bottom, sandwiched between the cold hard earth and several tons of solid metal.
andreareina 4y ago
They could be brought in explicitly to fix the situation, and they could fail to do so for no fault of their own. I don't think there's enough public information to say one way or the other.
r_hoods_ghost 4y ago
Would a potential CRO really get full access to a public company's accounts and risk register as part of the interview process? Would a CTO really get full access to a company's code base as part of the interview process? Genuine question as this seems intuitively unlikely to me.
- alecco 4y ago
  18th largest bank, traded. Data and analysis is available easily. Also CRO seems to have been working for NY Fed for a long time, so she definitely knew what she was getting into. > Prior to SMBC, Olson held senior risk management roles at other leading global financial institutions. She also has rating agency experience, as well as experience in professional services advising large- and medium-sized financial institutions on evolving regulations, risk management and stress testing following the 2008 financial crisis. Olson began her career at the Federal Reserve Bank of New York, where over a period of 10 years she held a variety of senior policy, regulatory and examination roles in banking supervision.
JauntTrooper 4y ago
You're are assuming she didn't understand the situation when she took the job. I think it's much more likely she did and decided to take on the challenge to turn it around. People in the industry knew they were in trouble. (I remember some of my banking colleagues talking about it last year). That's probably why it was so hard for them to fill the CRO job. SVB had declined almost 66% in 2022. They were the 4th worst performer in the S&P 500. Their balance sheet concentration and mix made them an outlier in the industry and unusually exposed to rising interest rates. Its failure wasn't inevitable though. It had a strong brand and deep customer relationships with one of the primary engines of the US economy. If they could raise enough capital to fix their balance sheet, they could weather the storm. She was a regulator that worked on stress testing banks after 2008 and could help them decide on how much capital they truly needed. It turns out it was a lot, and when they finally did announce details of the capital raise, investors got spooked and it triggered a bank run.
hnfong 4y ago
> Sincerely curious about downvotes: Your original comment makes it seem like the newly hired CRO was so incompetent that they caused the company to go bust in 2 months... (where obviously the risks were already in place and there might not be any way to advert it by the time) > Do you take the job ? Depends on how much they're paying me and how badly I need the money. If I expect the company to fail shortly after I joined due to the existing dumpster fire, I'd be interested in the size of the sign on bonus. And of course whether I'd have legal liabilities by association with the company. I don't think my competence matters much in this situation.

deleted 4y ago

[deleted]

causality0 4y ago

The best parachute in the world won't help you if you open it when you're ten feet from smashing into the ground.

clownvorld 4y ago
depends on the origin of said parachute
csteubs 4y ago
This. Better to pull the parachute than wait for the federal retrorockets.

lp0_on_fire 4y ago

Any organization of that size will have inertia and the damage was already done by the time they got there.

jaycroft 4y ago
I think the parent is saying that the new CRO is bad not because they caused the dumpster fire - the new CRO is bad because after interviewing in January, they saw the dumpster fire and either thought it didn't matter, or that they could fix it. Not a case of "incompetent because they couldn't fix the problem", instead a case of "must be incompetent because they saw the books but took the job anyway".
- causality0 4y ago
  Do you have to be a bad risk officer to be willing to get paid to save whatever is possible to save even if the ship is sinking? Maybe because of them five percent fewer businesses will go under because of SVB.

hedora 4y ago

It depends on the terms of employment. Anyway, blaming the CRO / CTO for trying to put out a dumpster fire isn’t really productive. As for future employment. At least the current one tried to right the boat instead of jumping ship.

IG_Semmelweiss 4y ago
its not blame at all. Its competency. My point is that anyone competent would refuse to take the job. BY doing the opposite (taking the job) , the prospect hire is demonstrating that he/she (a) lacked the expertise to detect the dumpster fire, or (b) lacked the expertise to understand it was not salvageable (c) lacked the work-rate to do their due diligence (particularly for RISK management).
- hedora 4y ago
  Pay me 20x market rate, and I’ll try to fix your cobol dumpster fire of safety critical murder spaghetti. I will need to add some liability clauses to your standard employment contract. That doesn’t mean I’m incompetent; just that people you should hire on those terms are hard to find. Anyway, I don’t have idea what happened here. The long time to fill the position also could have been because they were looking for a CRO that was better suited for a mushroom farm (kept in the dark + fed bullshit). The resume of the new CRO suggests it was the former, not the latter.
  - ThrowawayR2 4y ago
    Isn't the CRO and other CxO positions considered officers of the corporation by law? I'm under the impression that there isn't any kind of liability clause that would get a corporate officer out of hot water with regulatory bodies should they decide to pursue charges. If that's not correct, I'd love to be enlightened.
    - hedora 4y ago
      Presumably, they could make sure they got a personal copy of the books as they existed on the start day, so that any negligence charges would be directed at the prior CRO. Not a lawyer, but various CxO’s specialize in jumping in and trying to repair failing companies. I’m sure they’ve figured out how to shield themselves from personal liability if their new employer ends up laying of 100,000 people and crashing the global economy.

eddsh1994 4y ago

I think you seriously misunderstand the complexity of something like the 17th largest US bank along with its 8500 employees and global offices vs a code base. And if you're right, maybe they did know about the risk and were actively working on reducing it.

kelnos 4y ago
I agree with you, but probably in the opposite way you mean: I think it should be a lot easier for a CRO candidate to evaluate a bank's balance sheet than it might be for a CTO candidate to evaluate a large, sprawling code base. Evaluating a balance sheet and identifying risks is one of the primary qualifications of a CRO job, no?
- travisgriggs 4y ago
  I dunno. Elon seemed to think he had things pretty figured out with Twitter's code base. :) But seriously, I'm amused by this thread. We always belittle or downplay the complexity of systems we barely understand. Every software engineer ever exposed to any non technical management, product managers, or sales people has experienced this in spades. You go blue in the face with frustration trying to explain why "seemingly simple things" just are not as simple as people want to believe they are. I've coded in mixed system designs for 30 years now. Experience has enabled me to see patterns I wasn't even aware to look for as a younger me. I see so much more and am available to evaluate so much more than ever before. But the most important thing that that "experience" has taught me is that this accrual of "experience" is not a convergent knowledge position. Sure, I see more than younger me's do, but I've also come to accutely embrace the notion that "the greater my sphere of knowledge, the greater my contact with the unknown." Complex systems like massive sprawling code bases are HARD. And so are highly intertwined economies.

dmn322 4y ago

Lots of people just aren’t in a position to be turning down jobs. If you want to judge people by the jobs they take, set up enough of a social safety net that reasonable people can’t get screwed by a short run of bad luck.

kelnos 4y ago
I don't think that statement applies equally well to your average employee as it does to a potential Chief Risk Officer at a fairly large bank. Totally agree with you in the general sense, but completely disagree when it comes to this CRO hire.
- politician 4y ago
  CRO of a failed/failing/sanctioned bank is not a resume builder. The good ones will definitely bail ("ethics") before it becomes public.

SkyPuncher 4y ago

Not at this point in my career, but probably at some point in my career. Routine just becomes boring at some point. Once you have an established track record, it's far easier to justify (with creditability) that you decided to take on a ridiculous situation.

pbourke 4y ago

How golden is my parachute in this scenario?

411111111111111 4y ago
It's pure gold, so you'll go splat at the bottom, sandwiched between the cold hard earth and several tons of solid metal.

andreareina 4y ago

They could be brought in explicitly to fix the situation, and they could fail to do so for no fault of their own. I don't think there's enough public information to say one way or the other.

r_hoods_ghost 4y ago

Would a potential CRO really get full access to a public company's accounts and risk register as part of the interview process? Would a CTO really get full access to a company's code base as part of the interview process? Genuine question as this seems intuitively unlikely to me.

alecco 4y ago
18th largest bank, traded. Data and analysis is available easily. Also CRO seems to have been working for NY Fed for a long time, so she definitely knew what she was getting into. > Prior to SMBC, Olson held senior risk management roles at other leading global financial institutions. She also has rating agency experience, as well as experience in professional services advising large- and medium-sized financial institutions on evolving regulations, risk management and stress testing following the 2008 financial crisis. Olson began her career at the Federal Reserve Bank of New York, where over a period of 10 years she held a variety of senior policy, regulatory and examination roles in banking supervision.

JauntTrooper 4y ago

You're are assuming she didn't understand the situation when she took the job. I think it's much more likely she did and decided to take on the challenge to turn it around. People in the industry knew they were in trouble. (I remember some of my banking colleagues talking about it last year). That's probably why it was so hard for them to fill the CRO job. SVB had declined almost 66% in 2022. They were the 4th worst performer in the S&P 500. Their balance sheet concentration and mix made them an outlier in the industry and unusually exposed to rising interest rates. Its failure wasn't inevitable though. It had a strong brand and deep customer relationships with one of the primary engines of the US economy. If they could raise enough capital to fix their balance sheet, they could weather the storm. She was a regulator that worked on stress testing banks after 2008 and could help them decide on how much capital they truly needed. It turns out it was a lot, and when they finally did announce details of the capital raise, investors got spooked and it triggered a bank run.

hnfong 4y ago

> Sincerely curious about downvotes: Your original comment makes it seem like the newly hired CRO was so incompetent that they caused the company to go bust in 2 months... (where obviously the risks were already in place and there might not be any way to advert it by the time) > Do you take the job ? Depends on how much they're paying me and how badly I need the money. If I expect the company to fail shortly after I joined due to the existing dumpster fire, I'd be interested in the size of the sign on bonus. And of course whether I'd have legal liabilities by association with the company. I don't think my competence matters much in this situation.