The Book of Risk
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The Book of Risk

Dan Borge
Wiley, 2001
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Editorial Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

In a bureaucracy, it’s taken for granted that any risk – like any flesh-eating bacteria – is a bad thing. But in a fast-paced environment in which decisions must be made in rapid-fire, risk is not only a constant, it’s a primary ingredient to success. So too in your daily life, in which each decision – Do I drive to work or take the train? Do I have a cigarette or use the patch? – ultimately comes down to a weighing of risks versus potential rewards. Dan Borge takes the sophisticated risk-management theories employed by some of the world’s smartest companies and boils them down to easy-to-grasp principles that can be used by any business or individual. Some books must be read carefully in order to be appreciated, and this is certainly one of them. Risk management is complex, and despite Borge’s skill at getting to the heart of the matter, you’ll find yourself mulling over the intricacies of each page of this finely wrought book. getAbstract recommends this book to all senior executives, and to any professionals with the potential to join those ranks – provided they make the right decisions.

Summary

A Risky Business

Risk management is simply the ability to gain more power over the events that can change your life. Properly viewed, it will be your wisest counselor, whispering in your ear about when to seize the positive opportunities of life and when to pass on the dubious ones. The business of risk management boils down to two principles:

  • Being aware that any endeavor carries risks.
  • Knowing that if you take deliberate action, you can increase the odds of good outcomes and decrease the chance of bad outcomes.

When you think about it, you’re already a risk manager. Every decision you make - leaving the bed in the morning, having a cup of coffee, lighting up a cigarette or getting behind the wheel of your car - carries with it risk. Weighing risks versus benefits is just as much your personal responsibility as it is a professional one. No magic bullet exists that enables you to anticipate risk perfectly. Managing risk begins with defining the bad outcome you wish to avoid.

Risk management is rapidly expanding as a prestigious professional field on par with doctors, lawyers and CPAs. Financial institutions re-evaluate their risk postures...

About the Author

Dan Borge, Ph.D., worked for Bankers Trust for 20 years and was the architect of the renowned RAROC risk-management system. Borge was a managing director and partner. Previously, he was an aeronautical engineer who designed airplanes at Boeing. He earned his doctorate in finance from Harvard Business School.

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