Thursday, July 9, 2015

Data

By Rick Nason, PhD, CFA
Partner, RSD Solutions Inc.

Data is a tool for risk management, but data is not risk management.  This simple fact is often lost in the current environment of risk management.  If the risk management department is mainly a function for collecting data then something is seriously wrong.  Risk management is the interpretation of data; the decisions of what data is necessary; the decisions about what data to ignore; the management of things that data cannot measure.  Simply because one has a hammer does not mean that a house gets built.  Likewise, simply because one has a massive collection of risk data does not mean that risk management is being practiced.

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