- 72% were concerned about their firm’s risk management practices, suggesting a need to invest in more effective risk identification, measurement and mitigation actions.
- 62% blame poor risk management at financial institutions as a major driver of the current crisis.
- 59% noted the complexity of financial instruments (derivatives) as causing some of the current mess. To me, this suggests a need for stronger cognitive ability in financial professionals and leaders; and learning to use the more sophisticated stochastic methods of risk management including Real Options, Monte Carlo Simulations, Rasch Measurement, and Computer Adaptive Testing of risk culture, financial skill, and leadership conscientiosness.
- 55% plan to put their risk management practices under a microscope, from the board down and from the shop floor up
Do your risk management practices address the abilities, skills of finance and leadership professionals in mitigating risk? Do your Audit and Enterprise Risk Management professionals demonstrate their proficiency at measuring, using modern psychometrics, cultural, employee, and leadership sources of risk and uncertainty? Are you comfortable with your firm’s ability to detect and mitigate these risks?