More on Hyundai Assurance as well as Risk Management

A lot of you have taken note by visiting the site and some of you have commented on the past post and Media Bistro has now taken note of the campaign: click here

 

Also, a very, very interesting (and very long ) article from the New York Times Magazine about the financial situation and what led to the meltdown (click here). The answer comes back to Risk Management and here is a great excerpt (also quoted on Rob Neyer's ESPN.com blog):

 

"Obviously, we are big proponents of risk models," he said. "But a computer does not do risk modeling. People do it. And people got overzealous and they stopped being careful. They took on too much leverage. And whether they had models that missed that, or they weren't paying enough attention, I don't know. But I do think that this was much more a failure of management than of risk management. I think blaming models for this would be very unfortunate because you are placing blame on a mathematical equation. You can't blame math," he added with some exasperation.

 

Maybe when we relook at the financial crisis, the problem will be deemed as mismanagement. Models and computer programs are great, but in the end, you need humans--especially when the models hit the end of the bell curve. It's one thing that Human Resources needs to be very sure about when hiring starts up again. It's not just the brains and the mathematicians who know how to set up the programs anymore; it also has to be about the people who know how to manage risk (+ and -) and make sure that companies are able to steer a clear course, even through turbulent times.