The key to understanding and managing risk is to improve your organization's ability to detect, assess, respond, and learn from potential threats using risk control factors such as communication, narrative, timing, action, bias, and diversity. While it's not possible to prevent all threats, strengthening these control factors can help minimize the impact of emerging risks.
Preserving optionality is one way to mitigate risks in decision making by allowing for the ability to exit or choose a different path. However, new information may reveal itself in the future that may influence a change in decision making.
With governments continuing to spend and run deficits, risk should be better managed at the individual and company level. Private market participants being overlevered is a concerning issue while governments remain sympathetic for being overlevered.
The speaker tells a story about a risky situation they were in when someone they were working with wanted to sell them cars without proper paperwork. They eventually hired a taxi driver to get away from the situation safely.
