Domestic Risk Management

*/By Stephen McPhie, CA/*
*/Partner, RSD Solutions Inc./*

/(Slightly late repost of blog from Valentine's Day, 2010)/

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 programme could include ordering flowers.  The
addition of a present adds extra cost to the programme 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
programme and the one chosen would depend upon a number of factors including
risk appetite, past experience, etc.

Of course, the risk management programme 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 programme can significantly
increase risk.  Of course, the same risk programme 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 programme 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.