by Stephen McPhie, CA
Partner, RSD Solutions Inc.
Valentines Day is an appropriate time to ponder on some aspects of personal risk management, especially for those of us who have spouses or partners. Actually, if some thought had not gone into Valentines Day before now, the risks of arguments, domestic splits, divorce or even being told that your partner has a headache increases dramatically.
A basic domestic risk hedging program could include ordering flowers. The addition of a present adds extra cost to the program but can provide a better hedge. Booking a table at an expensive restaurant is again more expensive but can provide the most effective protection against domestic risk. Each of these provides a progressively more expensive risk management program and the one chosen would depend upon a number of factors including risk appetite, past experience, etc.
Of course, the risk management program can be poorly conceived or implemented. If, for example, the present is a book entitled “How to Stop Snoring” or “10 Steps To A Cleaner House” or the dinner is not at a romantic venue with subdued lighting, but at the local sports bar when an important game is on, then the risk management program can significantly increase risk. Of course, the same risk program can work for good or bad depending on the circumstances. So in our sports bar example, if it is a female taking her boyfriend there she could gain a whole lot of brownie points, whereas the other way round, the boyfriend may well end up wearing a pitcher of beer and going home alone.
Looking at the downside, a hedge may also include an escape plan. I am told that France is a much friendlier jurisdiction then England for the male side of a relationship in a divorce. (There are some people I am hoping won’t be reading this!!!) You only have to spend a night in France to claim residence and give the courts jurisdiction … and assuming you file first!
All the above considerations are completely applicable in a corporate context and show that a risk management program is individual to every company and should be developed and implemented according to specific circumstances.
How do you handle your domestic risk management?
For my part, I intend to rush out to the store immediately I stop typing.
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