A Cure for Overconfidence

“FACTS FROM THE INTERNET” 86% of a group of college students say that they are better looking than their classmates 19% of people think that they belong to the richest 1% of the population 82% of people say they are in the top 30% of Safe Drivers 80% of students think they will finish in [...]

Learning from Disaster – The Honshu Earthquake

Steve Covey called it Sharpening the Saw.  A good risk management program will be continually learning.  The school of hard knocks is an extremely expensive teacher.  It is much better to audit the course by observing the experiences of others and learning from them.  The effective risk management program will be actively working to audit [...]

ERM Fundamentals

You have to start somewhere. My suggestion it that rather than starting with someone else’s idea of ERM, you start with what YOUR COMPANY is already doing. In that spirit, I offer up these eight Fundamental ERM Practices.  So to follow my suggestion, you would start in each of these eight areas with a self [...]

Risk Learning

ERM is a new and developing field. However, it is wrong headed to ever expect that it will fall into a simple set of repeatable practices. That is because of the nature of RISK. Risk has a way of changing and adapting to your risk management strategies.  Risk is like water looking for the weak [...]

ERM an Economic Sustainability Proposition

Global ERM Webinars – January 12 – 14 (CPD credits) We are pleased to announce the fourth global webinars on risk management. The programs are a mix of backward and forward looking subjects as our actuarial colleagues across the globe seek to develop the science and understanding of the factors that are likely to influence [...]

Eggs and Baskets

Andrew Carnegie once famously said “put all your eggs in one basket. and then watch that basket” It seems impossible on first thought to think of that as a view consistent with risk management.  But Carnegie was phenomenally successful.  Is it possible that he did that flaunting risk management? Garry Kasparov – World Chess Champ [...]

Risk Management Learns from Sun Tzu

Usually risk managers do not think of themselves as being at war.  But a risk manager is facing a number of foes.  And failure to succeed against those foes can result in the end of the enterprise.  So maybe the risk manager can learn from The Art of War. Sun Tzu’s The Art of War [...]

Rational Adaptability

In any given risk environment, companies holding a risk perspective and following an ERM program aligned with external circumstances will fare best. In order to thrive under all future risk regimes, a firm ideally would follow a strategy of Rational Adaptability. This involves three key steps: 1. Discernment of changes in risk regime, 2. Willingness [...]

Your Risks will Find you if you do not find them first

Latent Risks are those risks that you have that you are not aware of. When you start out with a risk management program, you may find that you have many Latent Risks. One of the most important outcomes of the early stages of an ERM program is to drastically reduce the number of important Latent [...]

Regime Change

If something happens more or less the same way for any extended period of time, the normal reaction of humans is consider that phenomena as constant and to largely filter it out.  We do not then even try to capture new information about changes to that phenomena because our senses tell us that that input [...]