Building Resilience in an Age of Crisis

As published in Monday's Globe and Mail.

When Lehman Brothers failed, was it a failure of corporate risk management, or corporate crisis management, or both? Rigorous risk management is a crucial element of good governance, not a euphemism for guessing. As became painfully evident in the Lehman case and a slew of other recent crises, not having adequate risk-management systems and acting accordingly can lead to a downturn in public confidence, and can easily become viral.

Crises aren't new. Why, then, has the management of risk attracted so much research and occupied so much time in corporate boardrooms? And why is it that, even as we've invested increasing resources in institutional risk management, we still too often encounter a profound lack of public trust?