Monthly Archives: November 2011
Today I met an individual who asked what I did for a living. I was somewhat distracted and mumbled the word “risk management.” As I regained my focus this gentleman said “Oh, you’re a risk manager. I’ve had trouble with my Workers' Compensation...” and he began to talk about insurance.
This was a prime example of the perception surrounding the terms “risk management” and “risk manager,” and how they’ve been equated solely to insurance coverage and insurance professionals in the past. I've witnessed this misrepresentation of the terms so many times that I felt not just inspired, but a public obligation, to write this article and help clear the confusion with the terminology that began long ago.
PASSING THE SMELL TEST
In the early 1960’s, two professors, Robert Mehr and Bob Hedges, developed the concept of Enterprise Risk Management. These two could easily be called the Godfathers of Risk Management. They published the first text to fully address the subject of business risk, "Risk Management in the Business Enterprise." The book introduced how risk management of an entire business could maximize efficiency, which would result in greater productivity. The basic premise was that all business risks should be managed, not simply those that could be "insured."
November 2, 2011
- Bob Hedges, Business Failure, Chief Risk Officer, construction consultants, Construction Risk, Construction Risk Management, CRO, Enterprise Risk Management, ERM, financial risk, hazard risk, Insurable Risk, operational risk, Risk management, Risk Manager, risk quadrants, Robert Mehr, strategic risk
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