‘Re-rethinking’ the relationship between risk management and regulatory systems

The current context of regulation Who’d be a regulator today?  As more and more regulatory initiatives run in to trouble, it is harder than ever to get agreement domestically, let alone internationally, on what regulation in any sector should prescribe or proscribe and how it should operate. In the UK, the findings of the inquiry…

An agenda for improving corporate risk management

In the course of preparing a series of seminars we will be delivering in London this winter, we have focused on what an agenda or ‘manifesto’ for improving corporate risk performance would look like.  What should the firm do practically to improve its management of risk and uncertainty? The agenda has five items. 1. Better…

The truth about Neil Armstrong, Barclays, LIBOR, risk & culture

To go directly to the commentary paper, ‘Regulation, risk & culture: will we never learn?’, click here. The report of the parliamentary Treasury Committee on LIBOR appeared a week after the death of American astronaut, Neil Armstrong.  The two events are strangely linked by their relevance to culture – but separated by a yawning gap in the…

Risk: what’s changed and why it matters

With a level of wisdom for which he was rightly famous, John Keynes (famously!) concluded his General Theory with a paragraph which included the statement Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. And so it has proved to be.  Many commentators…

(R)evolution of risk knowledge & training – more realistic or more of the same?

To look at most risk training on offer, you’d think post-crisis risk management was all ‘business as usual’.  Worse, perhaps it really is ‘business as usual’.  Why, after such fundamental challenges to the logic and efficacy of risk management since 2007, has there been so little change to how all businesses – whether financial institutions…

We need to talk about COSO (6/7): Assumptions about behaviour

The revised COSO draft uses the world ‘culture’ 12 times.  The document refers variously to culture, to control culture and to internal control culture.  At no time are these defined, explained or differentiated; it is left to the reader to imprint his or her perceptions, associations, biases and misapprehensions on to the meaning of the…

Thinking about risk culture

In the wake of the failure of MF Global, I have seen a number of commentators attributing its failure to its culture.  The criticism is also prevalent in post mortems of bank failures in 2007 and 2008 and the ensuing period. The danger with the ‘culture’ explanation is that you cannot create a culture –…