Politics of uncertainty 

Excerpt

A perspective on the use of risk management in many facets of society was given in a briefing at the Chartered Accountants’ Hall in 2004. The report and oral briefing of risk management assailed the “obsession” with risk management and the development of organizations that show strong tendencies to be “responsibility averse” rather than risk averse. Professionals, governments, and companies were called to task for the development of this misdirected application of risk management. Defensive medicine occupies center stage for the practice of medicine where physicians offer highly qualified opinions with attendant caveats leaving the patients to discern proper solutions to the decision making process. Fallout from the Enron debacle shows that accounting firms are avoiding relationships with high-risk clients that should receive high level auditing scrutiny. The withdrawal of individual judgments from the public by professions historically relied on leads to a situation where the disclaimer sections of reports overwhelm professional opinion. Information is packaged in the form of minimal records and highly controlled correspondence with disclaimers. The tyranny of small print counters society’s need for transparency in many matters. The report attributes the rise of the “risk management of everything” to the audit culture. The “new audit” culture is seen to have a distorting effect on the performance of professionals, governments, and companies. The report cites the Barings Bank failure and Shell’s Brent Spar PR crisis as examples of catastrophic failure where unknown risks are not properly prepared for, rather than organizational deficiencies in risk management. The new politics of uncertainty described in the report offer the public a more transparent understanding of the professional risks undertaken on their behalf, which lead to the exposure of organizations adopting responsibility adverse strategies. The general guidance offered in this report can be easily applied to all forms of risk management (www.demos.co.uk). …