Target Canada—A Bad Case of Intelligence Risk Mis-Management
July 2018. Co-author: Dr. Jay Grusin. When time-sensitive, high-impact decisions have to be made, Intelligence Risk is the risk of failing to isolate organizational biases and reconcile a flood of data, expert projections and qualitative risk analysis, in order to reach objective, informed conclusions. In the business world, traditional risk analysis methods often come up short in such situations, as demonstrated by the long list of well-publicized business debacles in both financial and non-financial sectors. By contrast, in the world of government intelligence analysis, disciplined risk analysis processes (SAT’s) have been developed and field-tested over more than 20 years. SAT’s (Structured Analytic Techniques) are essential tools used by intelligence analysts when stakes are high and senior government officials need timely, informed and unbiased assessments to support critical decision making. This article demonstrates the power of using SAT’s in a business context by examining how they could have saved Target Corporation from losing US $7.5 billion in sunk costs and over 18,000 Canadians’ jobs. Click on the title to see the complete article.
Mastering Intelligence Risk Management Techniques
RiskMinds 356 Innovation library, September 2017. Highly-effective risk analytic techniques developed by the government intelligence sector to deal with high-stakes situations are equally applicable to the financial sector, where examples abound of flawed decision-making in high-stakes situations resulting in catastrophic consequences. Click on the title to see the complete article.
Cyber Risk – Time for Risk Managers to Step Up
PRMIA Intelligent Risk journal, February 2017. Co-authors: Doug Blakey and Alex Woda. Click on the title to see the complete article.
Managing Risk in the Era of Fintech
Risk Radio interview transcript, February 2016. Click on the title to see the complete article.
Case Study - Control Complacency at Société Générale
Chapter 23 in "Implementing Enterprise Risk Management Case Studies and Best Practices," Wiley October 2014. Click on the title to see the complete case study.
How Institutionalized Bonuses Undermined Bank Risk Culture
Risk Radio interview transcript, September 2014. Click on the title to see the complete article.
Under the Regulatory Microscope - Top-Tier US Banks' Capital Plans
La Revue Banque, March 2014. Click on the title to see the complete article.
Beyond ERM - Risk Linkages, Migration and Amplification
PRMIA RiskJournal, July 2013. Click on the title to see the complete article.
Risk Management Infrastructure as a Living Organism
Jan. 31, 2013, Journal of Risk Management in Financial Institutions
Like any complex, intelligent, adaptive organism, a financial institution depends on the performance of its critical systems, of which risk management is one. Just as the institution’s health and longevity depend on the performance of these systems, they in turn depend on the soundness of their infrastructure. This paper examines the essential elements of risk management infrastructure in a financial institution using another complex, intelligent, adaptive organism as an analogy — the human anatomy. The critical elements of the human anatomy — brain, skeleton, cardiovascular, muscular, nervous and immune systems — all have their counterparts in the infrastructure of a high-functioning risk management system. In addition to establishing this analogy, the paper translates the insights it provides to real-life contexts, using actual examples from the financial sector to highlight the preservative effects of robust risk management infrastructure elements as well as the catastrophic effects of flawed ones. Click on the title to see the complete article.
Like any complex, intelligent, adaptive organism, a financial institution depends on the performance of its critical systems, of which risk management is one. Just as the institution’s health and longevity depend on the performance of these systems, they in turn depend on the soundness of their infrastructure. This paper examines the essential elements of risk management infrastructure in a financial institution using another complex, intelligent, adaptive organism as an analogy — the human anatomy. The critical elements of the human anatomy — brain, skeleton, cardiovascular, muscular, nervous and immune systems — all have their counterparts in the infrastructure of a high-functioning risk management system. In addition to establishing this analogy, the paper translates the insights it provides to real-life contexts, using actual examples from the financial sector to highlight the preservative effects of robust risk management infrastructure elements as well as the catastrophic effects of flawed ones. Click on the title to see the complete article.
The New Model of Governance and Risk Management for Financial Institutions
March 31, 2012, Journal of Risk Management in Financial Institutions
Co-authors: John Bugalla, James Kallman, Kristina Narvaez
The paper proposes a new model of governance and risk management consisting of four components: (i) board risk oversight responsibilities, (ii) a board level risk committee, (iii) an executive risk committee and (iv) an individual with responsibility for overall risk management. Some companies are subject to Dodd-Frank Act and are forming a stand-alone risk committee; other companies still have the option of adopting these best practices. The paper contends that the new model promotes greater risk disclosure, the audit committee should complement the risk committee, the board level risk committee should have an independent member with extensive risk management experience, the board should develop a clear risk position, management should form an executive risk committee, have a chief risk officer, create an internal risk intelligence function and, if these are done, institutions will enjoy higher stock prices. Click on the title to see the complete article.
Co-authors: John Bugalla, James Kallman, Kristina Narvaez
The paper proposes a new model of governance and risk management consisting of four components: (i) board risk oversight responsibilities, (ii) a board level risk committee, (iii) an executive risk committee and (iv) an individual with responsibility for overall risk management. Some companies are subject to Dodd-Frank Act and are forming a stand-alone risk committee; other companies still have the option of adopting these best practices. The paper contends that the new model promotes greater risk disclosure, the audit committee should complement the risk committee, the board level risk committee should have an independent member with extensive risk management experience, the board should develop a clear risk position, management should form an executive risk committee, have a chief risk officer, create an internal risk intelligence function and, if these are done, institutions will enjoy higher stock prices. Click on the title to see the complete article.