Perfection

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

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Risk management is not about perfection.  Risk by its very nature is about the uncertain future.  Perfection can only be assessed by examining things retrospectively.  The past is known.  The past has no risk.  Risk managing is not about perfection; it is about trying to improve the uncertain future outcomes.  That task is far from perfection and indeed is very messy.

Action

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

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To some degree we are all hard-wired for action.  When something happens we want to react.  This is especially true when something risky happens – or is about to happen.  However sometimes action is rash.  Sometimes doing nothing or delaying action is more wise or prudent.  Sometimes first assessments are false or misleading and lead to in appropriate action.  Sometimes the action taken is more costly than any benefit that could be gained.  Doing nothing is hard, but sometimes it is the most realistic and proper action to take.

Journey

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

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In his excellent book “Enterprise Risk Management: From Incentives to Controls” (2^nd Edition, Wiley), author James Lam makes the excellent point that “Enterprise Risk Management is a journey not a destination”.  Well stated.