Beside the firm's daily mark-to-market disciplines, the three
indispensable ingredients of our success in managing global risks are:
Escalation, Accountability and Culture.
1. Escalation means communicating risk concerns to higher levels of management, getting more fingerprints on potential problem risks and challenging the notion that a business group leader ought to make independent decisions on risks that affect the entire firm.
2. Accountability, of course, means acknowledging that people are responsible for what their business groups do, and, equally important, holding senior management committees responsible for evaluating all aspects of risk, including the quality of the people with whom the firm chooses to do business.
3. Our greatest risk protection, however, comes from ascribing as much status, prestige and compensation to those partners engaged in control functions as to those running businesses -- and in constantly rotating partners back and forth between risk control and business operations - Venture Capital Investments
1. Escalation means communicating risk concerns to higher levels of management, getting more fingerprints on potential problem risks and challenging the notion that a business group leader ought to make independent decisions on risks that affect the entire firm.
2. Accountability, of course, means acknowledging that people are responsible for what their business groups do, and, equally important, holding senior management committees responsible for evaluating all aspects of risk, including the quality of the people with whom the firm chooses to do business.
3. Our greatest risk protection, however, comes from ascribing as much status, prestige and compensation to those partners engaged in control functions as to those running businesses -- and in constantly rotating partners back and forth between risk control and business operations - Venture Capital Investments
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