“I believe that economists put decimal points in their forecasts to show they have a sense of humour.”
(William Gilmore Simms)
Risk managers can be equally humorous, and for pretty much the same reasons. I was talking with a colleague this morning when this quotation came to mind. I am always suspicious when someone shows me a risk register with very precise values attached to the risks. The precision of the calculation seems likely to indicate a lack of understanding of the degree of uncertainty around any risk quantification and it can give false confidence to users of the output.
There is also the suspicion that the person who prepared the information has confused the effort of production with the actual creation of something meaningful or, worse, is consciously misleading their readers in the level of confidence that can be given.
As risk managers, we have to tread the tightrope of acknowledging the difficulties of quantification while still giving confidence in the usefulness of what measures we have.
We should be able to do this without bull.
“Be confident not certain”
(Eleanor Roosevelt)