Clouds of Vagueness
ERM
Proud to be a war quant
I’ve just re-read Douglas W Hubbard’s The Failure of Risk Management. It’s an odd book in that while I agree with most of what’s in it, I’m not particularly convinced by the overall story suggested by the subtitle: Why It’s Broken and How to Fix It. Hubbard’s theme is that we do not do enough, […]
Fragility management
I reviewed Nassim Nicholas Taleb’s book Antifragility with the promise to look separately at what the lessons might be for organisational risk management. The answer is quite a bit, and this article will just be an initial high level view. The thinking is developed pretty uncritically from the book. There will be plenty of scope […]
5%
One of my previous Wanderings mused on the power of soundbites, and specifically the encomium, “nothing between men is 3 to 1.” Turned into more mathematical language we get the Harry the Horse Theorem: in a two point sample space where the outcome is affected by the action of humans, managers, or anyone else who thinks […]
The profession that knows it all
The theme which underpins Clouds of Vagueness is the inherent difficulty of mastering an uncertain future and the inadequacy of our standard risk management techniques to help with this. So I was delighted to see the paper by Michael Power of the LSE in the journal Accounting, Organisations and Society, with the provocative title The risk management of […]
Risk appetite – a bad idea
It’s a truism that you can’t do anything – or even nothing – without taking risk. This is an important issue for all organisations, but the discussion of what risk to take has become unnecessarily obscured. Specifically it has become bogged down in the unhelpful concept of ‘risk appetite’ and this has added to the […]
COSO on risk appetite – reaching for the ideal
COSO have also issued guidance on the ‘risk appetite’ to go along with that of the IRM and other authorities. I think it’s a good example of how risk appetite would be dealt with in an ideal world. By this I mean a world with two characteristics: you could decide how much risk you wanted to dial […]
Organisational risk taking – a simple view
At the core of organisational risk management lies the question of what risks to run. You know the organisation cannot achieve its purpose with certainty. You know you can take steps to control risk – to some extent. You know that your chance of success will be improved if you seek out and grasp opportunities. And you think […]
Where did the BBC go wrong?
It is a truth universally acknowledged that having some kind of ‘best practice’ (enterprise) risk management system will keep you out of trouble. Well, it is if you read the standard risk management stuff, books on reputational risk management and the like. But as the BBC’s reputation stands in tatters it’s worth asking what went wrong. Is it the […]
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