Case 3.1 Fake Map or North Star
- Anthony Peccia
- Sep 13
- 1 min read
Updated: Sep 18
If the North Star is what guides the team through unknowns, what do you think the Head of Op Risk is pointing to?
Now that we know what the North Star is, where do we start?
The North Star metaphor suggests that operational risk management isn’t just about identifying known risk. It is about having a guiding principle that helps navigate the unknowns. I think the Head of Op Risk is pointing to the framework or mindset that ensures consistency and clarity even when there’s limited information.
They can leverage ECRG to structured think about the new business. What exposure (pysical or intangible) they will face? How to control it and make the residual risk acceptable? How to recovery ASAP when an event occurrs? etc.
Based on the case, I think leveraging the bank's operational risk management framework as the "North Star" to systematically identify, assess, and mitigate the key operational risks of the new oil trading business, adapting the approach as needed is the goal here.
I think the Head of Op Risk is referring to the risk management framework, the organization’s “North Star.” This includes established policies, risk appetite statements, control frameworks, and governance processes that ensure new business activities are evaluated systematically before launch.
To me the North Star in this case might be about sticking to the core risk principles exposure, controls, governance, and resilience even if the trading business is unfamiliar. I’m curious how far those fundamentals can guide us when the team lacks direct experience in the area.