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Douglas Hubbard, in his book "The Failure of Risk Management", claims that risk management failed us in the lead up to the GFC because of flawed risk models, the use of qualitative risk assessment through the use of risk matrices or both. He contends that anything can be measured and that we should be measuring.

The case for quantification
There is no doubt in my mind that quantification is better than using our best judgement because our minds are at the mercy of our psychological biases. A coup

Effective governance requires changes in the way risks are managed across "stove-pipes" or "business silos". More often than not, when loss events occur it becomes clear after the fact that different silos were holding onto different pieces of the risk puzzle but no one could put the pieces together. So the problem is how to identify risk? 

Many risk managers are so bogged down by loss event capture and incident management, that being able to focus on preventing loss events and identifying emergi

The problems with risk models, a Bank of England speech on why financial models are broken and the general evolution of risk management.

Over the last few months, risk models have come under the spotlight as a potential reason why risk management, as an entire institutional function, is failing.

It is often said that the benefits of Risk Management are intangible. No argument here. It's tough to say "You were successful because I helped you manage your risk" when you are talking to an already successful CEO. How then do you demonstrate the benefits of Risk Management?

One approach is around the concept of Intellectual Capital. When we talk about the value of a business, we talk about book value and market value. The difference between book and market value is often described as the intan

 
One approach for embedding a risk management culture across your enterprise is to develop a team of risk champions within your business. What should you expect of them and how should you equip them?

The answers to these questions are not straight forward. When you are dealing with cultural change the strategies that work best will depend on a myriad of elements that have occurred or will be occurring in your organisation. Here are some practical questions to ask yourself that will help you to d

Here’s a common Project Manager story:
You, the Project Manager is creating the budget for your project. Your high level WBS (Work Breakdown Structure) is ready and you have the high level estimates needed for a budget baseline.
As a smart Project Manager, you will add a contingency (20-25%, which is common practice nowadays) to account for unknown events that may add to your cost. In that way, you save your project from going over budget. So far so good.

It seems like you have done your due dili

Receive a complimentary free copy of the widely regarded book " A Handbook on Asset Liability Management "
- Edited by Professor G. Mitra

Key speakers include:

INSURANCE - Teemu Pennanen, King’s College London, ex-Managing Director at QSA Quantitative Solvency Analysts Ltd. He has extensive experience of consulting and providing solution to the insurance industry.

PENSION - Michael Dempster (Cambridge Systems Associate), consultant to a number of global financial institutions and governments.

BANKI

Managing a profitable balance sheet is more challenging than ever. With Basel III and the more immediate Dodd-Frank regulation on the horizon, a tool such as FTP is vital to ensure an effective centrally managed liquidity strategy. Post-crisis, whilst the economic situation is improving, allocating sufficient liquidity costs quickly and efficiently to the correct business-line is paramount.

Karin Bergeron is a trader on the CVA desk at Scotiabank. She is responsible for pricing and hedging CVA as

Project change management involves new IT systems, new products, and new markets, or reacting to a change in the business environment, such as regulatory or competitive actions. Project risk management is about identifying new risks or changes in the threat level of existing business processes. The challenge for project managers is how to get teams, functional areas, business processes, systems, and vendors aligned to new goals; moreover, how to get the needed transparency into the activities th

Managing a profitable balance sheet is more challenging than ever. With Basel III and the more immediate Dodd-Frank regulation on the horizon, a tool such as FTP is vital to ensure an effective centrally managed liquidity strategy. Post-crisis, whilst the economic situation is improving, allocating sufficient liquidity costs quickly and efficiently to the correct business-line is paramount.

Kent Westerbeck formed the Westerbeck Risk Management consulting company in 2007 after retiring from LaSall

One of the most important measures of a firm's performance is its return on assets. This is such a critical metric for businesses, that whole schools of thought have been created around the metric to allow a business to easily control and smooth its working capital costs.

There are actually three recognised models that are at the heart of a cash management exercise and they are loosely referenced as Miller-Orr, The Baumol Model and Stone. They are of course very similar in nature and nothing is u

Risk and Issue are two words that are often confused when it comes to their usage. Actually there is some difference between them. The word ‘risk’ is used in the sense of ‘chance’. On the other hand, the word ‘issue’ is used in the sense of ‘matter’.

Uh-Oh!  This is a show-stopper.  We can’t complete the project on time because the server needed won’t be available for another month! What can we do now?

This is not a new problem for Project Managers to have encountered. Is this a risk or an issue? 

Following the recent launch of Strategy & Risk Studio, Manigent have released a lite version of the application to allow users to download the product free of charge! 

Strategy & Risk Studio is a one-of-a-kind application enabling consultants and practitioners to design and define an organisation’s enterprise performance management, enterprise risk management and/or strategy and risk management models. The tool is based on the Risk-Based Performance Management approach, which integrates best prac

This is a copy of the latest CompliSpace blog orginally published at http://http://complispace.wordpress.com/2012/04/04/10-reasons-why-your-enterprise-risk-management-program-wont-work/.  Would love to get your feedback.

In our last blog post we boldly asserted “If You’re Not Practicing Enterprise Risk Management You Should Be”.

So it was with great interest that we came across an article in Risk Management Magazine titled “Is ERM Failing?” which basically summarised the finding of a 2012 PwC repo

Designing an organisation’s Strategy & Risk Management framework does not have to be difficult. Strategy and Risk Consultancy, Manigent, have created an innovative new way for risk and compliance practitioners to quickly develop and document their strategy and risk model: Strategy and Risk Studio for iPad.

Strategy & Risk Studio is a one-of-a-kind application enabling consultants and practitioners to design and define an organisation’s enterprise performance management, enterprise risk management

Research from the Chartered Institute of Internal Auditors has revealed that more than half of the fines handed out by the Financial Services Authority (FSA) in 2011 were as a result of weak internal risk management systems. 

Fines can be issued by the FSA when organisations breach any of the eleven principles (operational and ethical). The research announced by the Chartered Institute of Internal Auditors this week, shows that 60% of the FSA’s fines in 2011 were as a result of weak risk manage

A risk taxonomy, the brains of an enterprise risk management software platform, creates a common language to make working across operational silos possible. It also creates the basis for a risk management discipline, so rather than reacting to seemingly "one off situations" the entire organization can standardize and prioritize how assessment, mitigation and monitoring are applied in a common comparable way to build risk management competency across the enterprise.

See our other blogs Identify C

Organizations need to build a robust Enterprise Risk Management (ERM) framework or risk taxonomy, which provides a holistic view of all information and relationships across the organization. Taxonomy structures and preserves the integrity of information, so as changes occur in multiple parts of the organization, managers can compare risks on an 'apples to apples' basis and connect the dots between business areas. It is the critical foundation of your ERM program and any enterprise risk managemen

A study from the Chartered Institute of Internal Auditors revealed that weak risk management systems were  responsible for more than half of all the fines handed out by the FSA to financial services businesses, amounting £38.5m during 2011.

If one needed a strong signal that ineffective risk management and poor internal control systems were taken seriously by the regulator, this is it.

Weaknesses and failures in risk management often result from poor communication and misunderstandings, ineffectiv