Risk Management

The Truth About Facts

By: | March 3, 2017 • 3 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

When I arrived at my friend’s home, I gave a candy bar to her two small children, as all good “aunties” do.

They were elated; mom not so much. From the corner of my eye, I saw her son digging into his candy — even though he was explicitly told by mom to eat it after dinner.

As we got ready to head out for a walk, he came over with chocolate smeared on his face. Mom asked whether he ate the candy. He adamantly denied it. As she and I walked, I asked her: “How do you feel when your children lie to you?”

She quickly corrected me: “He didn’t lie, he fibbed. A fib is a lie about something unimportant.”


Fibs, lies, falsehoods, fudged truths, disinformation, misleading information — and let’s not forget a new term trying to penetrate our vernacular — “alternative facts.” They are terms-of-art that seriously concern me.

It was mindboggling for me to hear White House spokesman Sean Spicer explain the president’s overstated inauguration attendance numbers by paralleling it to weather forecasting.

“There are times, like anything else, it’s not alternative facts, it’s that there’s sometimes you can watch two different stations and get two different weather reports. That doesn’t mean the station was lying to you.”

A fact is a stable, real, verifiable, objective piece of information.

Mr. Spicer, weather stations do not lie or make false claims. Weather stations make forecasts about the weather — a future event.

A lie is a false claim. A truth is a claim of facts. The weather becomes a fact only after it occurs. Only then can we definitively state the weather of that day and make it an irrefutable fact.

A fact is a stable, real, verifiable, objective piece of information. A fact is considered dead and the reason why we use the expression, “cold, hard facts.” A fact is not dissuaded by opinion, beliefs or temporary passions. You cannot have “false facts,” but you can have false claims of fact. A false statement that claims something is a fact, is a lie.

Why does this matter to me as a risk manager?

Our jobs as risk management professionals are hard enough without introducing lying into our daily equations. We can’t let lying become acceptable. We, as an industry, cannot collaborate in lies and we simply cannot marginalize lying.


We are an industry that makes daily decisions, often life and death decisions, on behalf of people who trust us to say the truth, even when it’s uncomfortable or unpleasant. The decision to buy kidnap, ransom or terrorism coverage is hard, often unpleasant. It requires facing ugly facts.

We often guide our clients’ decisions using forecasts but we genuinely try to perfect our prophecies using facts so that our clients can rely on them. When we go to court defending or prosecuting a claim, only facts must be in our briefcases.

We must remember that our clients often treat our predictions as real. We must have the highest duty of care when it comes to truth and facts. &

More from Risk & Insurance

More from Risk & Insurance

2017 RIMS

Cyber Threat Will Get More Difficult

Companies should focus on response, resiliency and recovery when it comes to cyber risks.
By: | April 19, 2017 • 2 min read
Topics: Cyber Risks | RIMS

“The sky is not falling” when it comes to cyber security, but the threat is a growing challenge for companies.

“I am not a cyber apocalyptic kind of guy,” said Gen. Michael Hayden, former head of the Central Intelligence Agency and National Security Agency, who currently is a principal at the Chertoff Group, a security consultancy.

Gen. Michael Hayden, former head of the CIA and NSA, and principal, The Chertoff Group

“There are lots of things to worry about in the cyber domain and you don’t have to be apocalyptic to be concerned,” said Hayden prior to his presentation at a Global Risk Forum sponsored by Lockton on Sunday afternoon on the geopolitical threats facing the United States.

“We have only begun to consider the threat as it currently exists in the cyber domain.”

Hayden said cyber risk is equal to the threat times your vulnerability to the threat, times the consequences of a successful attack.

At present, companies are focusing on the vulnerability aspect, and responding by building “high walls and deep moats” to keep attackers out, he said. If you do that successfully, it will prevent 80 percent of the attackers.

“It’s all about making yourself a tougher target than the next like target,” he said.

But that still leaves 20 percent vulnerability, so companies need to focus on the consequences: It’s about response, resiliency and recovery, he said.

The range of attackers is vast, including nations that have used cyber attacks to disrupt Sony (the North Koreans angry about a movie), the Sands Casino (Iranians angry about the owner’s comments about their country), and U.S. banks (Iranians seeking to disrupt iconic U.S. institutions after the Stuxnet attack on their nuclear program), he said.

“You don’t have to offend anybody to be a target,” he said. “It may be enough to be iconic.”

The world order that has existed for the past 75 years “is melting away” and the world is less stable.

And no matter how much private companies do, it may not be enough.

“The big questions in cyber now are law and policy,” Hayden said. “We have not yet decided as a people what we want or will allow our government to do to keep us safe in the cyber domain.”

The U.S. government defends the country’s land, sea and air, but when it comes to cyber, defenses have been mostly left to private enterprises, he said.

“I don’t know that we have quite decided the balance between the government’s role and the private sector’s role,” he said.

As for the government’s role in the geopolitical challenges facing it, Hayden said he has seen times that were more dangerous, but never more complicated.

The world order that has existed for the past 75 years “is melting away” and the world is less stable, he said.

Nations such as North Korea, Iran, Russia and Pakistan are “ambitious, brittle and nuclear.” The Islamic world is in a clash between secular and religious governance, and China, which he said is “competitive and occasionally confrontational” is facing its own demographic and economic challenges.

“It’s going to be a tough century,” Hayden said.

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]