Risk Thought of the Week

We need to ask ourselves, is risk management part of the planning towards the achievement of Company’s objectives or it is taken as roadblocks towards the day-to-day functioning?

It is observed that there is an indifferent attitude towards risk management, therefore, the engagement of the risk management concepts is a slow process. However, a continuous focus is required to increase the rate of soaking. It is often said that tone from the top is need of the hour, ownership of the risks are equally important.

Operational risk quantification continues to fascinate the world for allocation of capital. The key challenge remains with quantifying operational risks because it cannot be counted, personal judgment will always be there. Risk Control Self-assessment seems to be the closest way risk professionals have found, the key challenge remains with the application of the end-users.

Risks generally do not change week after week, the focus is to keep an eye on the incremental change in the risks. This will keep the dashboard more meaningful. A waterfall could be a useful piece to depict the picture of key risks.

There are some events, whose frequency is very small but their impacts are very high. Do you think that Companies are spending enough time and money on Business Continuity? Do employees understand the preparedness on this front or crisis management is the only way? What is our historic exposure to understand how badly disaster affect us?

The building block of “risk” is the uncertainty of the future. How different is the next second from the previous second or the current second? Can we join all the next seconds to look for the answer about the future? If everything remains static, all the future time will be same as current time, but this is not the case. Is it possible to predict future taking inputs from the five building blocks of nature?