Documentation is an overused word. What does well documented mean? It is not a thousand page manual. It is what you get nowadays in the best widescreen tv instructions. An easy to get going manual (or page) and a longer manual. The provison of just a longer one is not about commuincation but obfuscatuon. Bear this in mind when people talk about well documented.
Documentation also should not be a very expensive textbook unless that is what you want… to pay for. However it may be cheaper to employ someone who understands it.
Tuesday, 19 October 2010
Sunday, 3 October 2010
Risk management is rubbish...
Is risk management rubbish at prevention of future risks? What are the major risks facing financial concerns? Unknowns. What are the unknown unknowns? You may have to use your imagination in any environment and those who predict something are not always that great unless they can demonstrate significant profits from the course they have taken away form orthodoxy. However when orthodoxy goes wrong like with over-sophistication, no-one ever seems to spot it soon enough.
Let’s flesh this out. Arguably one of the biggest operational risks is caused by over-sophistication or in old-fashioned English being “too clever for yer own good”. Companies and managers (like Governments) are far too clever and sophisticated in doing things but eventually it will end in tears as either the systems can’t cope, aren’t properly documented, staff shortages and even sabotages or inexperience, excessive staff turnover and loss of the key intellect and other staff etc may mean for instance the pricing does not work, the derivative is disastrous etc
Documentation is only any good if someone else understands it and can be bothered to make that effort. So a thousand page manual is in theory good documentation. However in practice it is a waste of time as who will read it and remember it.
Risk management is poor as they need to be fully integrated with the Audit Function so that everything is thoroughly and regularly checked and understood. This is more so when companies are involved in joint ventures with financial concerns. The financial concerns should have the expertise (apparently) and the company pays accordingly. Also both parties should be handsomely rewarded. But as we know experts and intellects are not guarantees of success all the time.
Monitoring does pick up many faults…but will it be too late?
Internal Audits need to be more pro-active and thorough. The system’s supposed to do this and it will not always be enough to spot check a few things.
Talking only of mistakes, They happen but the secret is to make ones that don’t matter too much. For instance typos are a nuisance here but unemployment vs. in employment is a huge typo (which I nearly made once in an e-mail) and form vs from is forever happening.
Perhaps one way of reducing risk is to bring back the secretary!
Let’s flesh this out. Arguably one of the biggest operational risks is caused by over-sophistication or in old-fashioned English being “too clever for yer own good”. Companies and managers (like Governments) are far too clever and sophisticated in doing things but eventually it will end in tears as either the systems can’t cope, aren’t properly documented, staff shortages and even sabotages or inexperience, excessive staff turnover and loss of the key intellect and other staff etc may mean for instance the pricing does not work, the derivative is disastrous etc
Documentation is only any good if someone else understands it and can be bothered to make that effort. So a thousand page manual is in theory good documentation. However in practice it is a waste of time as who will read it and remember it.
Risk management is poor as they need to be fully integrated with the Audit Function so that everything is thoroughly and regularly checked and understood. This is more so when companies are involved in joint ventures with financial concerns. The financial concerns should have the expertise (apparently) and the company pays accordingly. Also both parties should be handsomely rewarded. But as we know experts and intellects are not guarantees of success all the time.
Monitoring does pick up many faults…but will it be too late?
Internal Audits need to be more pro-active and thorough. The system’s supposed to do this and it will not always be enough to spot check a few things.
Talking only of mistakes, They happen but the secret is to make ones that don’t matter too much. For instance typos are a nuisance here but unemployment vs. in employment is a huge typo (which I nearly made once in an e-mail) and form vs from is forever happening.
Perhaps one way of reducing risk is to bring back the secretary!
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