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Black Swan Risks |
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A ‘Black Swan’ is a large-impact, hard-to-predict, and rare event beyond the realm of normal expectations.
- First, it has a central and unique attribute: high impact.
- Second, it is an outlier, as it lies outside the realm of regular expectations, because nothing in the past
can convincingly point to its possibility.
- Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence
after the fact, making it explainable and predictable.
Improbable events seem to occur much more often than we dare to think. Assumptions relevant to average situations are less relevant to irregular ones, especially when the "rules of the game" themselves do change.
One core element of the ‘Black Swan’ issue is the need for institutional re-think for Corporate Governance for the Companies. More often than not, the structure and Board companies has been created for an entirely different operation that has no bearing to the magnitude and complexity of the present financial scenarios or the complexity of the products that are present seeking market share.
Haselfrë works with the C-level executives of the Companies so as to better understand the strategies and identify the ‘Black Swan Risks’ and could include:
- Drawing up the strategy maps for
the company
- Craft the Sustainable Balanced
Scorecard in line with strategy
maps.
- Identify ‘Black Swan’ risks that could
arise due to the new strategies or
introduction of new products that
are complex
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