What is Risk Management, Anyway? Who Can I Ask?

The financial crisis had led the media, regulators, even accountants screaming for better “risk management.”  OK, the need seems pretty obvious in 20/20 hindsight.  But what does that really mean?

Lots of very smart people are attempting to answer that question.  A just-released report from Marsh Insurance Brokers outlines “how insurance and risk management strategies can help UK firms improve liquidity, free up cash, strengthen their financial resilience and continue operating profitably during deteriorating economic conditions.”  Everyday bloggers are posting reasonable steps for managing risk.   ZDNet offers three great steps for mitigating your IT risks. And ever-reliable Wikipedia offers its customarily thorough definition and approach.

With so many competing “theories” to risk management, which bullet list do you follow? Which is right for your industry? Wouldn’t you just like to talk to someone else facing problems and ask, “How are you handling this?” There needs to be more forums or meetings of people facing risks to answer these questions. Sure, there is RIMS. The Risk and Insurance Management Society has a huge annual meeting which offers great value to insurance and reinsurance professionals. And, the SRA (Society for Risk Analysis) does great work relating to human health and environmental risk. 

Paul Wilmott at Palisade Risk&Decision Analysis Conference
Wilmott magazine founder Paul Wilmott (right) discusses risk with a banking delegate at an earlier Palisade Risk&Decision Analysis conference.

But what if you’re not in those industries? Everyone is facing risk now. The financial crisis means that banks and the money sector are especially hard hit, but the ripple effect includes energy, healthcare, aerospace, manufacturing, and more. The Palisade Risk&Decision Analysis Conference (New York City, November 13-14) is one such forum gathering executives from many industries who face risk. Over 20 case studies provide a learning environment where professionals demonstrate their own unique approaches to risk and uncertainty. Software training using Monte Carlo simulation and other techniques is also available. There is evidence that this approach of learning from each other is particularly valuable for making change quickly.

DMUU Training Team

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