Black holes in risk governance

Abstract

Risk governance must change to integrate both technical and sociological breakthroughs. As of today, quantitative models are overweighted in the risk management process. Qualitative models, such as the catastrophe theory, may help more than inappropriate Brownian Gaussian models. Behavioural biases and sociological phenomena such as the scapegoat, ‘social control’ and ‘control as a watchword’ entail risk governance being driven by the board of directors.