Guessing is not a strategy: How to build decision velocity with AI and real-time data
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Risk Management, After the Crisis
Known globally as The Risk Doctor, David has been working in risk management for about 30 years. He has worked in 48 countries on every continent except the Antarctic (too cold!), with clients in most industries.
In the midst of the global economic crisis, some risk takers are being taken to task, and rightfully so. But not all risk is bad. Moving forward, what is the appropriate role of risk management and risk specialists?
Many people blame the current global financial crisis on a failure of risk management. They say that risk professionals should have been in the best position to foresee what was coming and warn the rest of us. If the forward-looking radar of risk management was unable to spot the danger signs, then it can be of little use in future. Perhaps we should rely on something else to make sure that we don’t make a similar mistake again.
Risk specialists tell a different story. They claim that they did indeed recognize the warning signs of overexposure in the financial markets and they raised these concerns within their organizations, but the business lines overruled them. It seems as if risk practitioners told their colleagues about the dangers and the decision was made to go ahead and take the risk anyway.
It is hard to judge at this point which of these versions of history are right, and perhaps the truth lies somewhere between the two. Regardless, attention is now turning to what should be done once the current crisis is over. The following suggestions might prove useful as elements of a solution.
Avoid overregulation. There …
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