46. 4 amazing trends in risk management - Alex Sidorenko

The transition from risk management as a stand alone system to a quantitative instrument of risk evaluation built into the key processes of an organization.

Risk management is not characteristic to people in an office. It is counter to human nature. We must approach this by contributing to the development of a risk management culture
The role of a risk manager in a company must change. The concept of three lines of defense is morally obsolete.

To execute its new role the risk management team must possess four key competencies: standards, quantitative evaluation, the psychology of risks and business specificity.

[almohnad]

I am really amazed about your video and how you don't speak only about theories
My company is thinking about appointing someone as a risk manager after I had seen your video I recognized that we still have some homework to do first so thank you so much

[McCabeH]

excellent points - asI said on the thread on LNKD I don't agree the RM's need to have skin in the game - but I do think there should be built in veto power as well as a senior mgmt level punitive process when risk levels are exceeded by a trading desk or unit. Perhaps it's b/c of the types of firms I've worked for but RM has always been seen as a "friendly" - but still with caution because the old time risk mgr was NOT COMPENSATED. therefore we did see RM's undermine transactions simply because they didn't understand optionality (for example). Working closer together eliminated this problem. I like your work and will subscribe. Nice to see forward thinking people in risk!

[dianes.bakerbafrmfiic]

Interesting information Alex: Thank you and as you say, Risk Management seems to be gaining more relevance. I do however find that business owners are not seeing who or how the "value added" feature of Risk Management must be conducted by a separate professional. How often are you reminding them that it is not the CFO'a job.

[ArtemAndrianov]

Interesting thoughts about a bonus structure and a structure of a team.
I have a core question for the 6 trend- how to measure (scientifically sound) that risk management did work?