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May 19

Eight rules a risk manager must remember

Posted by abiao at 14:33 | Others | Comments(37) | Reads(9127)
Unlike launching rocket, managing risk is a combination of art and science that should incorporate a number of fundamental characteristics. This post is by no means another ex post analysis of the reasons of current credit crisis, instead, it is about eight simple while crucial rules a risk manager or risk analyst must keep in mind (print out and post it on your PC). Sources are from http://www.geocities.com/mrmelchi/rule.htm and http://nasdaq.riskgrades.com/clients/nasdaq/edu_course.cgi?href=Module4-L2.html.

1.There is no return without risk. Rewards go to those who take risks.
2. Be transparent. Risk should be fully understood.
3. Seek experience. Risk is measured and managed by people, not mathematical models.
4. Know what you don't know. Question the assumptions you make.
5. Communicate. Risk should be discussed openly.
6. Diversify. Multiple risks will produce more consistent rewards.
7. Show discipline. A consistent and rigorous approach will beat a constantly changing strategy.
8. Use common sense. It is better to be approximately right, than to be precisely wrong.


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Invaluable tips. As managers it's very important for us to continue to hone our leadership skills. Therefore, I am very grateful for content like this.
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Very good rules to live by when you're managing people
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Great tips, it's always about managing risk
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Awesome tips on reducing and managing your risks
Always important to have a set of rules to live by when you're trying to manage your risk.
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Great tips to share with my team
Great tips, it's always about managing risk
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Invaluable tips. As managers it's very important for us to continue to hone our leadership skills. Therefore, I am very grateful for content like this.
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Very good rules to live by when you're managing people
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Cool I love this article .it's standardized, clear and concise ,that inever heard about it before .
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This is utterly surprising; why aren't we paying more attention to this thing?
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