by Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
I live on a relatively large wooded lot. I love being “out in the country”. It has a lot of advantages (and admittedly its disadvantages too).
The main thing I like is the privacy and beauty offered by the trees on my lot. They provide a home for the birds that wake me up in the morning, they provide a wonderful place for my dog to play, they provide a sense of newness and hope for every new day. You can imagine my sadness several years ago when we had a hurricane and about 200 trees were blown over. All was not lost however as many trees were able to withstand the onslaught and I still have a lot that is heavily treed – albeit not as heavily treed as before.
Surveying the damage after the storm (Hurricane Juan if anyone is interested) it became quite obvious what the secret of survival was. It wasn’t to be the biggest or strongest tree. The biggest, most rigid trees on my lot easily tumbled when the storm was at its height. It also wasn’t the old, weak, feeble and sick trees that survived. They also were blown over. The trees that survived were the flexible ones. They bent with the wind, but they did not break.
Is your risk system rigid, old and sick or flexible? When the winds blow – and they will – will your organization still be standing tall at the end, or will it be a victim of its thick and rigid risk management practices? (By the way – are there any regulators out there getting this message?)
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