Risk Management

In order to capture the constituent elements of systemic risk, we need to look beyond causality and the details of what is happening.

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SADIA Approach to Managing Risk Management

  • Manage risk management by focusing on three risk dimensions:
  1. Ensuring the approach is systemic i.e. contains feedback loops to ensure conditions of interest are continually monitored for deviations
  2. Focusing on people risk i.e. risks associated with human interaction
  3. Always taking into account the impact of culture on behaviour
  • Risk management at the enterprise level begins with two factors:
    • How an organization manages information flow
    • How an organization manages its culture
  • How an organization processes information is a strong indicator of the presence of latent risks, hidden threats which are often overlooked but which could wreak havoc if they are allowed to remain undetected within the lattice of the firm
  • An organization’s culture acts as a prism through which individual employees view and interact with the world around them; it helps them develop a view of the world, which nourishes their attitudes and affects their behaviour, individually and collectively, every day and when a crisis arises
  • In order to capture the constituent elements of systemic risk, we need to look beyond causality and the details of what is happening, to the underlying meaning and synchronicity of the activity or event and its contextual environment
    • Enhancing analytic decomposition with functional synthesis that helps bring into focus the many factors in play that lie outside the normal scope of the event and its environment
  • In most cases we already understand what we’re dealing with, and how we manage the activity or situation – it’s the why that sometimes eludes us

Presentation – Mapping Activity to Understand Risk

Strategic Risk Management Framework

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