Overcoming Bias in Risk Management

With respect to risk management, bias has always existed and always will. It is not unusual to find evidence of group-think, dominant personalities, over reliance on numbers, disregard of contrary information, disproportionate weighting of recent events, and tendencies toward risk avoidance or risk-taking in any organization.

Suppressing dissenting viewpoints, ignoring creative thinking and isolating the organization from outside influences are sure ways for executive management to lose touch with business realities. In this issue of Board Perspectives: Risk Oversight, we examine how to overcome bias in risk management.