We do what we can
Recently, Riskviews read a parable that ended with one person coming upon a small animal, perhaps a cat, lying on the ground with their feet up in the air. When asked why, the cat explained that it had heard that the sky was falling. The person laughed and said that the cat couldn’t stop the sky from falling. The cat replied, “we do what we can”. (Anyone who can help with the source please add to comment.)
“We Do What We Can” would be a good motto for risk managers. Contrary to popular belief, Risk managers do not know the future any better than anyone else. But with the twin handicaps of no prescience and popular belief that they possess it, risk managers can have a positive effect.
Risk Managers can have an impact on frequency of damaging losses. Though they cannot eliminate them. Many risk managers have been fired because they failed to stop 100% of all damaging losses. But many others keep on working to reduce the likelihood that the firm will experience a damaging loss. One important part of having an impact on frequency of damaging losses is to recognize the changing likelihood over time.
The other place where risk managers do what they can is in the area of firm resilience. Good work in previous crises only makes the risk manager’s job harder. Survival of past crises can foster a feeling of invulnerability and complacency towards risk management. The risk manager needs to work to maintain vigilance. It must be done carefully to avoid the chicken little syndrom.
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