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  a_kanjanapangka@yahoo.com August 29, 2013 10:42

  Risk Manager might not know nature of each industry well because they didn't involve real business operation .
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  Hilda Nicell August 20, 2013 22:00

  Crooked bankers and irresponsible lenders based on the inflated property bubble fired by shady share dealings such as Contracts for Difference where the buyer only paid 10% up front and borrowed the balance.  Read all about Anglo Irish Bank and how the Irish taxpayers have to pay for the banks bailout thanks to a Guarantee by Government.  This generation and the next will have to shoulder the cost as well as the negative equity.  Where was the regulator?
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  Jeffrey Hunter August 16, 2013 17:46

  Being "comfortable" with they're Risk Managment program.
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  wk chan August 9, 2013 13:12

  1) Failure to Manage Extreme Risk in a System of Systems,

  OR

  2) "Friction with Unreliable Narrators" of CRO such as
  a) overweight small probabilities and underweight large probabilities
  b) allowing risk to overtake appetite,
  c) operating creep “pressure to perform” syndrome ie making numbers, by agreeing to Operations Management to operate on the edges of acceptable practices is acceptable,
  d) behave dishonestly only to the degree that allows him to maintain a positive self-concept ie explicit risk of getting caught,
  e) intuitive judgement of responsibility ie pivotality vs criticality, and
  f) today feeling fearful tomorrow taking gamble ie contradictions in behavior/idiosyncratic fecundity

  which is difficult to detect.
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  Wilna Meiring August 7, 2013 14:36

  Not understanding the business, business dynamics and especially the business culture

   
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  Graham Andersen August 7, 2013 3:27

  Relying on credit rating agency opinions including that AAA means low risk
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  Keith Porter August 7, 2013 1:31

  Long story, but may be instructive. The following events have not (yet) led to a catastrophe, but it would have if the risk managers' decision had gone unchecked. There may still be a problem.

  A large retailer for whom I once consulted was aware it had an earthquake exposure problem and asked me to provide advice on the seismic vulnerability of its warehouses. The retailers' management had it in mind that the buildings were everything: if the building were designed to high seismic resistance, that meant they had managed the earthquake problem. One staff member also felt that in a big earthquake, the entire region would be in ruins anyway, so there was no point in trying to manage the risk.

  We spent a lot of time teaching them two points: (1) Even big earthquakes do not destroy everything in the region. In modern US earthquake history, the best prepared companies can be in operation shortly after the earthquake, and most of their suppliers and customers will be alive and well and ready to continue with their lives and businesses as well. (2) While it is a good idea to ensure that the building is well designed and built, it is the nonstructural vulnerabilities that tend to represent the larger threat of operational failure in critical facilities. Nonstructural components (computers, HVAC, raised access floors, unsecured contents, etc.) can be damaged at much lower levels of shaking (in earthquakes that occur much more frequently) than shaking strong enough to can cause substantial structural damage. This particular company could take steps to quantify its earthquake risk (chance of operational failure in a given number of years), and if it did so, it should try to manage the fragility of critical nonstructural components such as warehouse racks as well as the building's structural elements.

  We successfully identified the most important mitigation targets and I believe they have addressed them, with one important exception: the storage racks. These racks seem to have a fundamental design flaw that is embedded in the design code. Meeting code, even exceeding it somewhat, appears to leave the racks vulnerable to collapse in moderate shaking.

  The problem in this case is that people trust the building code too much. Codes change because earthquakes and other natural disasters find weaknesses and cause catastrophic failures. Engineers sometimes discover shortcomings in the building code before a catastrophe occurs, but because code committees tend to be slow to acknowledge recognize problems, it usually takes an actual disaster to prove that there is a problem. 
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  Carlos Peralta Delgado August 6, 2013 22:43

  The most catastrophic error is not to have a corporate sponsor for a project and work with poor functional definition!!!
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  andreas andreou August 6, 2013 22:28

  The ' financial ignorance',they don't listen to anyone.
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  Jos Berkemeijer August 6, 2013 22:22

  Indeed!
  
  Barnabas Chirombo said:

  Owning the management of risk, rather than the business process owners.