5 4 3 2 1: Malcolm Griggs Propels Fifth Third into a First-Rate Risk Management Organization

By Githens, Bill | The RMA Journal, March 2005 | Go to article overview

5 4 3 2 1: Malcolm Griggs Propels Fifth Third into a First-Rate Risk Management Organization


Githens, Bill, The RMA Journal


Enterprise Risk Management, or ERM, has been evolving as a best practice among large banks for several years. Recently, the concept of identifying and managing credit, market, and operational risk under the leadership of a group dedicated to an enterprise-wide view has gained momentum. Banking regulators are demanding better risk management practices, the Basel II accords require a higher level of sophistication, and the Committee of Sponsoring Organizations of the Treadway Commission (COSO) has recently issued its long-awaited guidance on ERM.

The RMA Journal had the opportunity to talk with Malcolm Griggs, executive vice president and chief risk officer of Fifth Third Bancorp, about the ERM concept that he developed and implemented at Fifth Third. Fifth Third Bancorp, headquartered in Cincinnati, has assets of approximately $100 billion and operates over 1,000 banking centers in the Midwest and Florida.

RMAJ: You arrived at Fifth Third in April 2003, on the heels of the Written Agreement with the Federal Reserve Bank of Cleveland requiring Fifth Third to strengthen its risk controls. Did Fifth Third create your position as Chief Risk Officer in response to the regulatory action?

MDG: Clearly, the agreement with the regulators required us to enhance our risk controls, and we have done so and were released from the agreement in short order. I think the CRO position would have been created in any event, but the timing of the agreement with the regulators probably accelerated the process.

RMAJ: Tell us a little about your background and what you feel prepared you most for the challenges of a CRO position.

MDG: Prior to Fifth Third, I had the privilege of spending nearly 15 years in a variety of risk-related positions with Wachovia and its predecessor, First Union. Before that, I practiced commercial law.

The best preparation for the CRO position has been the opportunity to learn from people who know more than I do. That's a process that doesn't stop.

It's also important to have broad exposure to various types of risk and to the enterprise itself--retail, wholesale sale, capital markets, finance, treasury, and operations--to see 1) where risks might arise, 2) the best controls to have around those risks, and 3) how to measure and monitor the risks on an ongoing basis. It would be difficult for any new CRO to be effective without exposure to the enterprise as a whole.

RMAJ: You had to create an ERM function from scratch. That's a big change for any organization. How much resistance did you encounter?

MDG: You're right, it is a big change, but I encountered very little resistance. I was pleased to find when I arrived that the senior management team was highly receptive to the idea of an ERM function. George Schaefer, our CEO, set the tone from the top by emphasizing the importance of good risk management to our long-term success. Fifth Third prides itself on having a best-in-class sales culture. George asked me to build a best-in-class risk structure as well so that our sales efforts are not negated by incurring avoidable risks. The other leaders in the company also genuinely view the ERM concept, as we've executed it here, to be very useful. Fifth Third has always had a very conservative credit culture. We've always been well capitalized, and we don't engage in the flavor du jour when it comes to lending or other products, so the fundamental mind-set for good risk management was already here. What everyone recognized was that as we get larger and more diverse in our product mix and geography, we have to approach risk management differently.

RMAJ: You refer to how ERM was executed at Fifth Third. How different would that be at other institutions?

MDG: You've really hit on a key point. In order for an ERM program to be successful, it absolutely has to be tailored to the institution. Every bank has a different asset mix and a different business model, so why should an ERM program look the same everywhere?

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

5 4 3 2 1: Malcolm Griggs Propels Fifth Third into a First-Rate Risk Management Organization
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.