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Trust me, I'm an expert ...

It' s a line we seem to fall for far too easily, and this is something that scientists say has contributed to the current financial crisis.

Studies suggest that the normal mechanisms people use to evaluate risk and reward are not being used when you have an expert telling you what to do.

This is backed up by anecdotal evidence that has emerged about bank directors blindly trusting in the capabilities of their quants, and un-critically taking advice from business heads whose own judgements were clouded by the short-term bonus culture.

So what's the answer? Truly independent directors with formal training in critical thinking might be a start.

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Elton Cane

Elton Cane

Digital product delivery

News Corp Australia

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16 Feb 2007

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Brisbane

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