By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.
A few weeks ago a story came out of Italy that most people brushed aside as a quirky news story. Risk managers with much better things to do than worry about quirky news stories probably paid no attention whatsoever – but they should have!
The story I am talking about was the conviction of Italian scientists for manslaughter because they were not being able to predict the deadly 2009 earthquake. To those who understand the state of the art of earthquake science this was pure foolishness. To the Italian courts it obviously was not.
Why is this important to risk managers? Simple – if convictions can be made based on the inability to predict earthquakes, how far behind are convictions for not being able to predict (and prevent) the actions of a rogue employee, or a financial debacle, or a systems failure, or a manufacturing mistake, or any of the other countless things that happen daily in the course of managing an organization?
Director’s insurance is de-rigour. How long before risk manager’s insurance is as well?
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