There’s an intersection in my neighbourhood that makes me nervous to drive through. Imagine a quiet suburban street that goes north-south which intersects the east-west streets that only have stop signs. I’ve observed that frequently cars travelling east-west roll…
Confessions of a risk manager
My 14-year old son recently bought himself a not-so-inexpensive bike with his own money. On the Monday after the purchase he wanted to take the bike to school. I advised against this as he had a pretty lousy bike lock.…
Campers, risk management and bears (oh my!)
There’s an old joke about two campers that are awakened by a hungry bear. The first guy yells ‘run’ but the second guy stops to put on his running shoes on first. The first guy asks if his companion really…
Retention bonuses: risk or reward?
In a recent article by Jim Heskett in Harvard Business Journal’s Working Knowledge, he weighs in on value of performance bonuses; he says “they provide an incentive to do nothing”. Is $742,000 too much to pay one executive at AIG?…
Culture and risk management
A good 8-page paper on the culture or risk management in financial institutions from Booz & Co. It reminds me of my days on the institutional trading desk which I write about below. Booz writes: While the risk management function…
Risk Management is not Internal Audit
Risk management is looking forward Risk management is when you are driving your car on a foggy night and you cannot see more than 10 feet in front of you – there may be something out there: perhaps a…