The Six Mistakes Executives Make in Risk Management

For several years now, most enterprises have set up sophisticated risk prevention systems. Those generally rely on advanced algorithms and modeling tools. They clearly improve risk prevention for… predictable risks. On the contrary, they can paradoxically weaken the leaders’ vigilance towards ”black swans”—this category of low-probability risks but with very severe consequences—by giving them a false sentiment of control. In this article, the authors review the limits of these systems and encourage leaders to not consider them as infallible.