A behavioral risk management system

Goto, Shigeyuki

It is really vital for corporate management to determine the extent of uncertainty the entity is prepared to accept for increasing stakeholder's value. Board of directors would set up an entity's strategic objective, an entity's operational objectives, and its risk appetite. The management is expected to respond properly to the risk associated with complex environment, to guard against irrational decision-making, and over-commitment, and to introduce effective controls for securing efficient execution. Corporations should consider to critically examine their risk management system from a Humanistic viewpoint. I would like to clarify the mechanism which improves employees' risk sense, creates risk preventive knowledge and encourage proper risk communication. I refer to the risk management system properly equipped with such a as "Behavioral Risk Management System."

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Academic Units
Center on Japanese Economy and Business
Center on Japanese Economy and Business, Graduate School of Business, Columbia University
Center on Japanese Economy and Business Occasional Papers, 56
Published Here
February 16, 2011