The consequences of taking on risk can be ruinous to personal finances, professional careers, corporate survivability, and even nation states. Yet many risk managers do not have a clear understanding of the basics. Requiring no statistical or mathematical background, The Fundamental Rules of Risk Management gives you the knowledge to successfully handle risk in your organization.
The book begins with a deep investigation into the behavioral roots of risk. Using both historical and contemporary contexts, author Nigel Da Costa Lewis carefully details the indisputable truths surrounding many of the behavioral biases that induce risk. He exposes the fallacy of the wisdom of experts, explains why you cannot rely on regulators, outlines the characteristics of the "glad game," and demonstrates how high intelligence or lack thereof can lead to loss of hard-earned wealth. He also discusses the weaknesses and failures of modern risk management.
Moving on to elements often overlooked by risk managers, Dr. Lewis traces the link between corporate governance and risk management. He then covers core lessons surrounding the role of risk managers as well as the difficult subject of integrated, single lens analysis of risk. The book also explores aspects of spreadsheet risk and draws on lessons learned in the information systems and software engineering communities to provide guidance on selecting the right risk management system. It concludes with a discussion on the most dominant of risk measures—value at risk.
Having a clear understanding about risk separates successful professionals, companies, and economies from history’s forgotten failures. Through examples and case studies, this thought-provoking book shows how the rules of risk can work to protect and enhance investor value.
Table of Contents
The Behavioral Foundations of Risk Management: Unreason Is the Even Eviler Twin Brother of Greed. The Maleficent Hand of the Men in Gray Suits. The Unpalatable Truth about Risk Management. What You Need to Know, but Nobody Wants to Tell You: What the Textbooks Will Not Tell You about Corporate Governance. The Most Important Lesson a Risk Manager Must Know. A Powerful Secret from Henry Fayol. The Incredible Advantage of a Monocle on Risk. Benefit from the Fable of Spreadsheet City. How to Guarantee Success by Understanding the Nature of Failure. Snake Oil Salesmen, Goat Gonads, and Value at Risk. Index.
Nigel Da Costa Lewis is a speaker, writer, and researcher on the uncertainty, risk, and irrational bias found in investing. Dr. Lewis has authored four books as well as numerous articles in international publications, such as the Journal of Investing, Journal of Wealth Management, and Pensions. He earned four master’s degrees from the University of London and a PhD from the University of Cambridge. His current research focuses on asset allocation, impact of fees on retirement savings, maximization of retirement accounts, new forms of diversification, life-cycle investing, intelligent portfolio optimization, and post-retirement optimal asset allocation. Visit www.nigeldlewis.com for more information.