Beyond the Usual Suspects: How Corporate Risk Management Benefits from Criminal Trials

Von Prof. Dr. habil. Stefan Hunziker

Imagine a company where risk management activities are suddenly abandoned, and decision-makers wouldn’t notice. Nothing changes except that management has more time because the yearly discussion of the risk report is left out. A nightmare or bitter reality in some companies?

What if companies assessed their uncertainties not with probabilistic approaches, but rather like the way criminal trials are conducted in common law systems, such as the U.S. or the U.K.? These trials employ one of the most systematic and disciplined decision-making processes in the face of uncertainty. Can corporate risk management learn from that?

Criminal trials are designed to decide despite uncertainty and incomplete facts. The process invites opposing narratives, tests assumptions, and requires both sides to build their case. It’s not probabilities that matter, but whether the narrative is coherent, plausible, and convincing to decision-makers. A jury doesn’t conclude someone is “85%” guilty. Decisions are based on whether the narratives convince “beyond a reasonable doubt”, a threshold that doesn’t require certainty, but rather a narrative strong enough to withstand reasonable objection.

For some risks, this logic can offer helpful guidance: when data is sparse, not all possible scenario outcomes are known, and risks are unique, in these contexts, using probability-weighted scenario analysis becomes too speculative. In risk management terms, “beyond a reasonable doubt” translates into a question of decision readiness: Is the risk scenario strong enough, given its implications, assumptions, and uncertainties, to justify action?

Beyond decision logic, courtrooms also offer valuable lessons in risk governance. Risk committees can assume a role closer to that of a jury or a judge, not just receiving reports, but actively challenging assumptions, hearing competing views, and facilitating well-reasoned decisions. Risk managers are creators of risk narratives, subject to challenge.

Management of Uncertainties
By fostering a culture of structured dissent and narrative justification, risk governance facilitates the assessment of deep uncertainties. Here is how:

This post is not a rejection of probabilistic models; they remain essential tools for many risks (as those who follow my posts know). However, when facing unique uncertainties, a courtroom-style approach may offer a more suitable solution.

Do your current risk processes and governance support this kind of structured, courtroom-style thinking?