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When risk management began
Recently, I read an article that said risk management had been traced back to around 2,000 BC when there had been some commodity trading in India.
I think it dates back to at least the dawn of the human era, and was probably practiced in some fashion before. (I am not getting into the question of whether God thought about what might happen when he created the heavens and the earth.)
Consider the first people to discover fire. They soon realized not only the opportunities it presented for heat and safety but also for cooking. They also learned what happens if you are not careful and get burned by it. They acted accordingly.
The fire discoverers had objectives: safety, food, heat, etc. They considered the current situation and what might happen, then decided whether or not to take the risk.
That was risk management.
Arguably, it was more effective than some practices today as the potential for harm was weighed against the potential for gain, and a calculated decision made.
They were not listing all the things that can go wrong with fire, holding a meeting to discuss them, and comparing each harm to a risk appetite.
Instead, they decided that if they were careful the benefits outweighed the risks.
How can we move risk…
