{"id":1385,"date":"2021-03-06T05:51:08","date_gmt":"2021-03-06T09:51:08","guid":{"rendered":"https:\/\/www.saudercpa.com\/blog\/?p=1385"},"modified":"2021-03-05T19:04:24","modified_gmt":"2021-03-05T23:04:24","slug":"the-six-mistakes-executives-make-in-risk-management","status":"publish","type":"post","link":"https:\/\/www.saudercpa.com\/blog\/2021\/03\/06\/the-six-mistakes-executives-make-in-risk-management\/","title":{"rendered":"The Six Mistakes Executives Make in Risk Management"},"content":{"rendered":"<p><em>Preface: Nassim Taleb (who wrote the best-selling books Fooled by Randomness and The Black Swan) and his coauthors argue that conventional risk-management textbooks don\u2019t prepare us for the real world. <\/em><\/p>\n<p><em>For instance, no forecasting model predicted the impact of the current (2008) economic crisis. Managers make six common mistakes when confronting risk: <\/em><\/p>\n<p><em>They try to anticipate extreme events, they study the past for guidance, they disregard advice about what not to do, they use standard deviations to measure risk, they fail to recognize that mathematical equivalents can be psychologically different, and they believe there\u2019s no room for redundancy when it comes to efficiency. <\/em><\/p>\n<p><em>Companies that ignore Black Swan (low-probability, high-impact) events\u00a0will go under. But instead of trying to anticipate them, managers should reduce their companies\u2019 overall vulnerability.<\/em><\/p>\n<p><a href=\"https:\/\/hbr.org\/2009\/10\/the-six-mistakes-executives-make-in-risk-management\">The Six Mistakes Executives Make in Risk Management<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Preface: Nassim Taleb (who wrote the best-selling books Fooled by Randomness and The Black Swan) and his coauthors argue that conventional risk-management textbooks don\u2019t prepare us for the real world. For instance, no forecasting model predicted the impact of the current (2008) economic crisis. Managers make six common mistakes when confronting risk: They try to &hellip; <a href=\"https:\/\/www.saudercpa.com\/blog\/2021\/03\/06\/the-six-mistakes-executives-make-in-risk-management\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;The Six Mistakes Executives Make in Risk Management&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1385"}],"collection":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/comments?post=1385"}],"version-history":[{"count":1,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1385\/revisions"}],"predecessor-version":[{"id":1386,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/posts\/1385\/revisions\/1386"}],"wp:attachment":[{"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/media?parent=1385"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/categories?post=1385"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.saudercpa.com\/blog\/wp-json\/wp\/v2\/tags?post=1385"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}