American Finance Association, 25
“Antifragile: Things That Gain From Disorder” (Taleb), 10
Asch effect, 53
Axioms, 13
Banker’s Trust, 91
The Big Bang Theory, 26
Black, Fischer, 25
The Checklist Manifesto: How to Get Things Right, 84
Committee of Sponsoring Organizations of the Treadway Commission (COSO), 58–60, 66–67
Complexity
complicated thinking, 34–37
description of, 29–30
managing problems, 37–40
systems theory. See Systems theory
VUCA and, 41
Complex system, 34
Complicated system, 32–34
Complicated thinking, 29, 34–37
Connected systems, 31
Culture, 92–95
Delphi Method, 52–54
Drucker, Peter, 4, 23, 73
Ecological systems, 31
“Ecology for Bankers” (May, Levin and Sugihara), 30–32
Emergence, phenomenon of, 39
Empathy, 50–52
Enterprise risk management (ERM), 117
ERM. See Enterprise risk management
Fair Housing Act, 47
“Five by Five Why” analysis, 45–48
Fraser, John, 65
Frequentist statistics, 14–18
Gardner, Dan, 107
Gawande, Atul, 38, 84
Group risks, 50
Hiring strategy, 88–89
Hoffer, Eric, 42
ISO 31000, 58–60
James, William, 12
Keyes, John Maynard, 108
Levin, Simon, 30
“Masters of the Universe” (Wolfe), 37
Materials failure, 48
May, Robert, 30
Measurement error, 18–21
Middle management, 92–95
“Noise” (Black), 25
Optimization, 21–23
Orgel, Leslie, 26
Plight of the Fortune Tellers (Rebonato), 15
Process-based risk management
hiring strategy, 88–89
playbooks, not rulebooks, 87–89
processes and obedience, 82–84
simple, complicated, complex, 84–87
Tomas Lopez, case study, 79–82
Rebonato, Riccardo, 15
Risk
causes of, 43–45
definition of, 1–2
fun and creative, 101–103
group, 50
happens, 97–99
importance of, 5–7
prioritizing people, 95–97
rethinking of, 2–5
revisiting of, 69–71
shutting down, 71–72
social activity, 73
training and culture, 99–101
Risk frameworks
about, 57
box-ticking leads, 65
competitive advantage, 63–64
COSO and, 58–60
enabling activities, 64–67
ISO 31000 and, 58–60
stifling abilities, 60–64
Risk homeostasis, 108–109
Risk management
attitude toward, 112–115
axioms, 13
complicated thinking, 34–37
corporate culture, 106 culture, 92–95
definition of, 7–10
Delphi Method, 52–54
design importance of, 52
empathy and, 50–52
“Five by Five Why” analysis, 45–48
frequentist statistics, 14–18
future of, 117–122
harmful effects of, 108–112
managing focus, 10–11
measurement error, 18–21
noise, 25–26
optimization, 21–23
people and, 48–50
potential developments, 120–122
sociological imagination, 50–52
trends in, 118–119
Risk mapping, 76–77
Risk metrics, 73–75
Risk: The Science and Politics of Fear (Gardner), 107
Robinson, Ken, 114
Rumsfeld, Donald, 20
Sarbanes-Oxley Act, 94
Scientific management, 31–32
Simple system, 32–34
Sociological imagination, 50–52
Sugihara, George, 30
Systems theory
characteristics of, 32
complex system, 34
complicated system, 32–34
simple system, 32–34
Taleb, Nassim, 10
Taylor, Frederick, 21, 31, 33
Twain, Mark, 18
Value at risk (VAR), 9
VAR. See Value at risk
Volatility, uncertainty, complexity, ambiguity (VUCA), 41
VUCA. See Volatility, uncertainty, complexity, ambiguity
Wiseman, Richard, 11
Wolfe, Tom, 37