Exploring risk issues

The NED hosted a debate on risk management and governance in London on June 6. The aim of the debate was to explore how those that oversee the risk function complement what is done at portfolio management level. And how much does risk oversight add value for investors?

Speaking at the debate were: Peter Cripwell, CEO, RiskSystem; Joe O’Donnell, Head of Investment Risk, Link Fund Solutions Ireland and Bob Swarup, Partner & Professional Director, Alpha Governance Partners.

Risk management is all about deciding when to act and when not to, said Bob Swarup. He was a chief risk officer at an alternative asset manager and now an independent director. He added that he tries to think about the risks that we don’t talk about as well as those we do focus on. ‘Humans love to quantify things. Risk is a sub-set of uncertainty. By trying to reduce risk down to a set of numbers we ignore unqualifiable risks. Having quantifiable risks gives us a sense of power and control. But qualitative risks can’t be measured so tend to be ignored’, he said.

To read more on this issue see the June edition of The NED.