Risk Professional, February 2009

cro interview

Steady State at State Street

Maureen Miskovic is the first CRO on the bank’s top executive team

BY JEFFREY KUTLER

For a banking company with $174 billion of assets on its books, State Street

Corp. has sailed relatively smoothly through the financial crisis. In 2007

its revenues grew 32 percent, to $8.4 billion, and income from continuing

operations jumped 44 percent, to $1.7 billion. Through the first nine months

of 2008, revenues were up 37 percent, to $8 billion, while net income rose 50

percent, to $1.6 billion. Although in-

come fell in the fourth quarter, rev-

enue for 2008 on an operating basis

increased 25 percent, to $10.5 billion,

and earnings per share 14 percent, to

$5.21.

As a leading provider of investment services – ranking, for example, as the world’s biggest manager of institutional assets and one of the top global custodians, offshore fund servicers and securities finance firms – with operations in 27 countries, Boston-based State Street has plenty of risks to monitor, though proprietary trading is not one of them. Only last April, however, with the appointment of Maureen Miskovic, did the chief risk officer position rise, literally, to the C-level. Miskovic, an executive vice president, reports to chairman and CEO Ronald Logue and sits on the top-management committee, known as the operating group.

“There were no wheels falling off the cart, and I wasn’t hired to solve any serious problem,” says Miskovic, the

An “information-sharing culture” eases the

burdens of risk management, says Miskovic.

first in the new Risk Professional CRO

Interview series. A U.K. native with a

bachelor’s degree in Russian and Ger-

man from Kings College, London Uni-

versity, Miskovic has seen pretty much

all that a senior risk manager can see

over the course of a career – handling

an expanding set of responsibilities

at S.G. Warburg, rising to European

treasurer at Morgan Stanley and, from

1996 through 2002, serving as Lehman

Brothers’ chief risk officer and deal-

ing with a 1998 liquidity squeeze. But

Miskovic took an unusual route from

there to State Street’s staff: through the

boardroom. As senior adviser of politi-

cal risk consulting firm Eurasia Group,

she was a director of State Street – and

of power company NRG Energy – be-

fore the idea of returning to a CRO

role came up.

Did your serving on corporate boards say anything about their risk-management consciousness?

There is actually quite a lot of board-of-director consciousness. NRG Energy had specifically set out to find somebody with risk management experience. State Street also was very interested in the risk management experience. As I have spoken to search firms