Risk defines who we are

A brain section are from  René Descartes.Cogito ergo sum. (I think, therefore I am) This famous quotation and the drawing of a brain section are from René Descartes.

RISK DEFINES WHO WE ARE

If you have an image in your mind that risk management is a negative subject, always focused on bad things, you need to read Mumsipus Revisited by Felix Kloman and experience the humanity of the man who believes that “taking risk is the defining element of human existence.”

Kloman’s update on Descartes’ famous quotation is “perilitor ergo sum,” I risk, therefore I am. Life with no risk would be sterile and dull. It’s a cliché to say that risk and reward go hand in hand. It’s ironic, then, that the common perception about risk management omits the positive aspect to focus only on the negative. Kloman argues persuasively that risk management addresses both situations.

Mumsimus Revisited The essays in this book are from a 15 -year period since 1974 during which Kloman was editor of the newsletter, Risk Management Reports. You can order a copy from Seawrack Press.
The essays offer many thoughtful insights about the nature of risk and the discipline that has grown up around it.
The essays are organized by themes (chapters)– a few of which are noted here:

  • History of risk management
  • Issues in risk management (including a discussion of broad public policy issues)
  • Risk communication: difficulties in this area and why it’s so important
  • Insurance (Kloman is a critic of the industry that provides a tool for “sharing risk.” His views may be of interest to insurance regulators, and other regulators who oversee specific-purpose “captive” insurance plans)
  • Catastrophes, the ultimate challenge for risk managers and regulators.

Kloman’s authority as a commentator stems from the perspective, independence, clarity of thought and humanity he brings to every essay. He’s been an practitioner and respected commentator throughout the development of the risk management profession: it’s a young profession; He reads widely and shares his sources; He loves good writing and his writing reflects the obvious care that he takes; And, his passion for risk management reflects his values and conviction that this discipline can improve outcomes for society.
It’s worth reading just to discover what he considers to be valuable. In the risk literature field, Peter Berstein’s book Against the Gods: The Remarkable Story of Risk is but one example.

The title of the book, Mumpsimus Revisited, makes reference to the story of a monk whose erroneous use of latin in the Mass was of little matter to him.The story is a reminder that we need to revisit our assumptions, especially as they relate to risk.

“Principles work better than rules”

The article Principles work better than rules by Neil Reynolds presents the convincing argument that attempting to solve an ethics problem in business by implementing rules is a wrong-headed approach.

A rules-focused approach lays a heavy burden on the ethical players. It diverts the resources of the regulated business to non-productive report writing. It diverts regulatory resources to non-productive reviewing of reports. Continue reading

Six ways risk management can help you

1. Identify key risks so that you can focus your limited resources on the risks that matter most

It’s the interplay of factors that differentiates risks. Breaking a rule or breaching a standard is just a starting point in determining risk. Going over the speed limit on the freeway is a standard that most of us break routinely. If this is the only risk factor, it’s not a very good indicator of risk. However, it’s a much more risky situation to be going over the speed limit, weaving in and out of traffic, failing to signal, and driving an unsafe car. This driver is reckless and can kill people. Continue reading