Governance

An introduction to the special issue of the Journal of Risk Management in Financial Institutions on Risk Governance.

An article in the special issue of the Journal of Risk Management in Financial Institutions on Risk Governance. 

Rather than reviewing reports on successes and failures - what read and react boards do - the next step for a board needs to be identification of the commons among the elements that drive success. 

An article in the Conference Board of Canada's Risk Watch on the increasing expectation from investors that boards establish formal risk committees.

As political and economic interactions become more complex, and as disruptive technologies and processes make innovation cycles massively shorter, boards of directors are paying more attention to risk. 

An article from Forbes in which the author speaks with two highly influential former executives about the importance of corporate governance and using the framework outlined in Governance Rimagined.

An article on the parallels between the well-known Moneyball story and proper risk governance structures. How to create value by altering the possible outcomes for your organization or investment portfolio.

Governance is a measure of trustworthiness, and even further, governance is a measure of the respect that companies have for their owners and other providers of critical capital.  I’ve long stated that governance is much  broader than the G that populates ESG ratings which have become so  popular. In fact, ESG is more accurately described as a subset of what constitutes governance, not vice versa. What did 2018 reveal about this  mindset?   

What happens when charm, cunning, and a lack of conscience collide in a single personality? The Dark Triad—narcissism, Machiavellianism, and psychopathy—represents a trio of traits that challenge the foundations of trust and cooperation in human relationships.

Ultimately, the work of risk managers is about preserving and enhancing the ability for organizations to create value. 

Learn how to apply the Value Equation in equity valuation, how equity cash flows are similar to mortgage-backed-security cash flows, and how risk expectations can distort portfolio performance.

This article appeared in Strategic Finance. Defining and achieving corporate purpose is a major challenge for today’s executive teams and their boards. Can companies create long-term sustainable value by managing risk and thereby realizing competitive  advantage? How can companies best overcome the obstacles? 

Are there critical risks that our brains are unable to see? Is there a solution?

The most interesting debate in corporate governance is not happening in  the boardroom or between activist owners and boards. Rather, it’s  happening all across a field of public (aka “permissionless”)  blockchains.

Skepticism over centralized authority, especially following the near-collapse of  the global financial system in 2008 led to the development of  “trustless” networks. One example is the blockchain behind Bitcoin.

The digital era has ushered in a new set of risks and opportunities that require an innovative response. To navigate these challenges successfully, organizations must adopt a forward-looking manner in their governance practices, anticipating risks and preparing for them before they materialize.

Amid growing demand for accountability and assurance that data, trade secrets, and infrastructure are secure from cyberattacks, boards of directors often find themselves without clear guidance on their responsibilities as governors.

An exploration of the impact that poorly framed incentive structures can have on the value of organizations. 

As awareness of the link between incentives and employee behavior  becomes more apparent, boards of directors have a responsibility to  ensure that the proper risk-taking culture is being stimulated and not  counteracted by the design of executive and employee incentive  compensation plans that unintentionally encourage negative behaviors. 

An exploration of the impact that human perceptions and reactions to risk have on value.

The mechanisms that govern capital allocation – whether political, intellectual, human, or financial – are under greater scrutiny than ever before. At the heart of these mechanisms lies a concept that is both intuitive and underexplored: the feed-forward effect.

This paper is about helping boards of directors and senior executives make better decisions in highly turbulent times when multiple critical, formerly trustworthy elements in our world are all in motion.

Trust is one of the most underappreciated yet indispensable forces shaping our lives. It is the quiet cornerstone of relationships, the unseen driver of organizational success, and the invisible thread that binds us together.

An article discussing the power of random numbers in ridding the U.S. election system of gerrymandering. 

In a political landscape where trust in Congress hovers at historic lows, why would politically savvy people push for further gerrymandering, and what might be a revolutionary way to stop them?

Understanding how humans and societies reinvent themselves under pressure is a key theme of my writings. The role that “truth” plays is central. Truth is the result of a process of revealing.

An article discussing the boundaries of our personal freedom as determined by our complex social interactions and the necessity of re-thinking the meaning of liberty to ensure our ability to be free. (Listen to the Audio Article)

Freedom is celebrated as the cornerstone of progress and individual fulfillment. Yet, no individual operates fully independent of others who also have the freedom to act. That makes it increasingly evident that freedom can leave behind a trail of hidden or deferred costs.

Throughout human history, the tension between belonging and division has shaped the trajectories of societies. We are wired to seek connection and to find our place within groups that affirm our values, beliefs, and identities, which influence our politics, our work life, and our personal relationships.

Our intricate web of economic, social, and political interactions has a subtle, underlying thread that binds us together through earned trust: the concept of fairness. It transcends cultural, geographic, and ideological boundaries and is a force that shapes decisions, fosters cooperation, and, when absent, can unravel the very fabric of economic and political systems.

In the American consciousness, the words "freedom" and "liberty" are often used interchangeably, their meanings blurred by centuries of rhetoric and patriotic fervor. Yet, as we navigate an era of increasing political polarization and institutional fragility, it is imperative to draw a clear distinction between these two concepts.

In the realm of literature that explores the intricate dance between individual agency and collective governance, "Governance Reimagined" and "God's Portfolio" emerge as complementary texts that delve into the essence of human interaction within larger systems.

Many people in risk management are defensive about risk, or they fear it. I seek to give organizations a better understanding of risk so they can handle it confidently and better achieve their goals.

An article on the evolution of risk managers towards aiding in the creation of value. 

An article in the special issue of the Journal of Risk Management in  Financial Institutions about potential failures in the governance of  risk.

An  article on the importance of changing enterprise risk management from a  focus on the downside to inclusion of the pursuit  of gain. 

An article on the way in which effective risk management can add value to organization.

An editorial on the potential cost of risk management on innovation.

An article about the conflicts a Chief Risk Officer faces when engaging in both oversight and advocacy.

A summary of a panel discussion featuring David R. Koenig, Jean Hinrichs, Charles Goldenberg, and Bob Mark. The panel was moderated by Gaurav Kapoor of Metric Stream.

With David X Martin, we discuss how boards and organizations can foster a positive embrace of risk-taking through integrating risk like other costs, resiliency planning, forward-facing techniques, and better board engagement.