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Risk Management

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In any specific industry, disaster is predictable. It can happen and comes with the territory. Airplanes fall out of the sky, oil wells spring leaks, financial markets are volatile. If you are in one of those industries you should have developed specific, detailed, anticipatory disaster detection, continuity and damage reduction plans and equally rigorous plans should one of these terrible possibilities occur.

In today's world we are confronted with the issue of risk management or, to be more precise, the issue of the lack of adequate risk management. Risk management means the ability to assess actions, evaluate possible downsides to those actions and prepare in whatever way is most rigorous and effective, the mitigation of the potential of harm from those actions.

Thus, in the world of deep sea oil drilling, risk management means thorough determination of procedures, testing, equipment and known accident prevention methods to prevent or diminish harm from a predictable disaster.

Risk management can be seen in a gender context too. What is the risk to a society if it does not educate its girls, if women die in childbirth, if economies use only half their productive workforce, if political leadership is missing important voices in making policy?

Often the issue of the empowerment of women and girls is seen as an equity argument. It is the right thing to do; a human right thing to do -- which it is. But it is also a matter of risk management or, in some countries, the lack of adequate management of the risks to their economic growth and competitiveness in the world.

Economic growth is not guaranteed and economic decline, as we have seen so vividly, can occur rapidly and severely. Why don't countries do a better job of hedging their bets, of evaluating the negative consequences of underrepresentation of women in the workforce, of poorly educated girls, of women lacking health care? Why would a country ignore an increase to its GDP of 10% or more if women participated equally in the workforce or an increase in its agricultural production if women got the same resources as men to grow crops? Why take such a risk to the economy?

Booz and Co. recently produced a report "The Third Billion." The thesis of the report is that developing and industrialized nations are stunted, underleveraged and suppressed because the economic lives of some of their women are stunted, underleveraged and suppressed. This lack of solid risk management by nations means that one billion consumers (women) are not fully integrated into economies.

Corporations can reduce their risk too using gender as a tool. Catalyst research shows definitively that having three women on a board of directors increases the corporate performance of that company. In volatile times, with market uncertainties, having women as board members is another tool in risk management strategy.

Other areas that cry out for risk management include terrorism risks, food and water scarcity risks, overpopulation risks, environmental degradation risks. Each of these carries real and disastrous consequences for all if not managed. Again, risk management is the ability to manage exposure to risk which requires identifying its sources, measuring it and creating plans and actions to address and hedge against these risks happening.

Some of the best hedging strategies are known but not brought to the scale needed.

Fighting terrorism is in some ways a strategy of risk management. We take off our shoes at the airport, people are flagged on "no fly" lists, web sites are scrutinized for 'chatter.' All of this and much more is really a way to decrease probability of disaster.

We can examine terrorism through the lens of women's presence and empowerment in societies. Often the groups that use terrorism as their tool are precisely those that keep women in marginalized and reduced status. Greg Mortensen, in his book "Stones into Schools," explains that one of the reasons the Taliban so viciously condemned and prohibited girls from going to school in Afghanistan is that the mother is seen as a pivotal figure in providing her blessings on the son's martyrdom or activity in terrorist acts. An educated mother would more likely withhold that approval.

Fragile states such as Yemen, Somalia, and Pakistan have an unfortunate correlative position on indices that measure women's progress. They are all at the bottom of any index of women's development.

The World Bank has put out a clear message that adding years of education for a girl will reduce the size of her family and the stress on the environment and natural resources while increasing the health of her family and community. Risk management.

Risk management needs to be thought of more expansively, whether it is the risk of slower economic growth or recession, risk of terrorist attacks or the risk that comes from an over-populated and under-resourced world. Try including women and girls as an integral part of a risk management strategy.