Rick Nason, PhD, CFA
Partner, RSD Solutions Inc
Last week I went to one of my favorite restaurants – the Humidor in Nassau, Bahamas. It is a Brazilian style restaurant where they keep coming around with various cuts of meat on skewers until you turn your “chip” over to indicate that you are full. For those of you that know me, you realize that I can put away a fair chunk of food. Thus you might think I relish eating at these all-you-can-eat places.
The goal of the meal however was not the restaurant. The Graycliff is also one of the top makers of cigars in the world, and I wanted to try one of their Double Espresso cigars that are top rated by virtually everyone. How could I enjoy a cigar if I had stuffed myself? Since I had a goal in mind – enjoy the rare treat of a great cigar – it was easy to have the self-discipline to stop stuffing my face with succulent cuts of meat. There was a bigger goal in mind.
Often it seems the case that companies are so focused on not making a mistake with risk management that they stuff themselves with risk management and forget the larger goal of the company. They do not have the self-discipline to know when to stop adding more risk management on top of more risk management, and when the process becomes self-defeating. The regulators of course are experts at over-stuffing themselves with risk-management to the detriment of the overall goal.
Does your company or organization know when enough risk management is enough? Is your company gorging on risk management to the detriment of achieving the real goals of the organization? Or is your company like the women in the couple who sat at the next table – she barely tried anything, although it was obvious that she desperately wanted to. I don’t think she achieved her objectives either.
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