From the standpoint of an institution, the existence of a risk manager has less to do with actual risk reduction than it has to do with the impression of risk reduction. Philosophers since Hume and modern psychologists have been studying the concept of epiphenomenalism, or when one has the illusion of cause-and-effect. Does the compass move the boat? By “watching” your risks, are you effectively reducing them or are you giving yourself the feeling that you are doing your duty? Are you like a chief executive officer or just an observing press officer? Is such illusion of control harmful?
