Risk management failures?
The management team at Silicon Valley Bank failed to take precautions against rising interest rates that would devalue their assets.
Was that a risk management failure?
I call it a management failure. They knew or should have known of the risk and taken earlier action.
Some years ago, I got a speeding ticket because I failed to anticipate the presence of local police cars.
Was that a risk management failure?
I call it a personal, my management failure.
I made a bad decision, and the potential risk became a reality.
Some of my friends attended a large bridge tournament and took the risk of getting OVID-19. They got sick.
Was that a risk management failure?
I don’t think so.
People are too quick to call something a risk management failure, just because something bad happened. Maybe a bad decision was made.
In my opinion, a risk management failure is when decision-makers are given poor information – whether that results in an adverse event or not!
For example, if they are given a heat map instead of the information they need to make an informed decision, that is a risk management failure!!!
If a decision-maker is given the results of a model but can’t translate the quantified “level of risk” into actionable information in the context of risk vs. reward, that is a risk management failure.
What do you think?
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Norman Marks on Governance, Risk Management, and Internal Audit 
I have suggested in prior comments and posts that the root cause issues with SVB, and others, was shoddy management/leadership, weak governance, and hubris. They didn’t want strong risk management so they got exactly what they wanted.
Hal, what is a risk management failure?
There is no such thing unless risk management is not doing what the organization needs of them and it is inconsistent with what management wants but has failed to act yet. Failure to act is also a leadership failure, not a failure of risk management.
That’s a healthy perspective, and the examples make it relatable.
Thanks, Clarissa
Risk management is part of good management, together with many other aspects, e.g., planning, actions etc. it is hard to imagine “management” without any aspects of “risk management”.
Precautionary actions are sometimes facing complex situations with high costs. SVB was in that situation but the risks of interest rate changes face every bank. Its part of their everyday management to ensure they remain viable. Its still about risk management, just basic everyday work of a bank.
Appreciate the idea that risk management is simply good management. However, if one were to look into SVB further and see relevant risks or control frameworks were missing / deficient, I would say there was a failure of risk management.
Yes, perhaps. But shouldn’t the CEO take ownership and make sure risk management is effective?
I think it’s a failure of corporate culture if the decision-makers repeatedly made poor decisions despite knowing the risks involved.
I agree with the faulty decisionmaking hypothesis.This may add to this – https://www.deonbinneman.com/which-decision-making-model-are-you-using/