Qualitative Management Approach

Effective ERM is truly an interdisciplinary exercise. As evidenced by the recent past, risk models fail without a strong understanding of the assumptions, weaknesses, and parameter issues. Management must be skilled in the concepts around ERM and have clear, unique insight into the risks their organization is accepting. Many smaller financial institutions weathered the financial storm, not because they had the most sophisticated models, but because they understood what risk level they would accept and identified that clearly within the organization. They did not mitigate risk, but controlled risk via the front door. ERM demands a knowledgeable, intuitive Senior Management to be the leaders.

At Risk Lighthouse, we take pride in being able to coach on risk identification, acceptance, measurement, mitigation, and monitoring. Everyone in the organization must have clarity as to what type and level of risk is acceptable. They should be able to express that risk in terms of ERM.

Organizations need those skeptics that can challenge the modeling, take a different view of risk, and pose the “What would happen if?” questions. At Risk Lighthouse, we help create thinking and pathways that can facilitate this line of communication.

The new financial world we have been so violently pushed into demands critical qualitative thought in conjunction with modeling.