Understanding risks

04 October 2016 | Research
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Signatories Prof Tan (right) and Prof Clegg formally establishing the Institute, with Mr Wong (right) and Mr Lambros Varnavides, Senior Trustee of Lloyd's Register Foundation, as witnesses

The new Lloyd’s Register Foundation Institute for the Public Understanding of Risk — Asia’s first international academic and public outreach institution of its kind — was launched at NUS on 3 October.   

The Institute aims to enhance public dialogue on risk issues that are relevant to Asia and the world, paving the way for more informed decision-making by policymakers, business leaders, scientists and people across Asia for the betterment of society. It will spearhead research and education on the scientific understanding of risk and its practical application by bringing together disciplines such as science, engineering, social sciences, and humanities, and develop risk communication tools and methodologies.

Established by NUS and the Lloyd’s Register Foundation, a UK charity that works to enhance the safety of life and property and advance public education, the Institute was made possible through a $17.5 million (£10 million) donation from the Lloyd’s Register Foundation, along with additional $19.2 million funding from the University.

This is the Foundation’s largest gift outside the UK to date. It is also the largest gift towards research that NUS has received from a foreign foundation.

Speaking at the launch, Guest-of-Honour Mr Lawrence Wong, Minister for National Development and Second Minister for Finance, said that humans deal with risks on a daily basis but are prone to making mistakes when evaluating them. “When our decisions about risks are based on flawed assumptions — erroneous assumptions — we may find ourselves ill-prepared in risk prevention, mitigation, response and recovery…without adequate preparation against these risks, we will end up with serious consequences for our society and our way of life,” he said.

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Panellists at the event discussing risks in the 21st century (from left): Prof Clegg; Mr Lee Tzu Yang, Chairman, The Esplanade Company Limited; Prof Elke U Weber, Professor for Psychology and Public Affairs, Princeton University; Mr Andrew Grant, Senior Partner (Singapore), McKinsey & Company; and moderator Mr Peter Ho, Senior Adviser, Centre for Strategic Futures, and NUS Trustee

NUS President Professor Tan Chorh Chuan and Managing Director of Lloyd’s Register Foundation Professor Richard Clegg signed an agreement formally establishing the Institute at the event.  

Prof Tan expressed his appreciation to the Foundation for their generous contribution and partnership in an area of significant and growing importance. “Understanding risks and the effective communication of these risks are areas that are vital to nearly all societies, and often underdeveloped in many parts of the world. The new Lloyd’s Register Foundation Institute for the Public Understanding of Risk at NUS will help to bridge this gap in Asia, and take the lead in high quality research in this underserved area,” he said.

He added that the work of the Institute will leverage on the University’s global network of partners and expertise in a broad range of disciplines to tackle complex problems that cut across sectors and geographical boundaries. It will also complement, strengthen and extend existing research thrusts in NUS, such as the Credit Risk Initiative which studies the risk of corporate default by firms, industry sectors and regional economies.

Prof Clegg said the Foundation was delighted to partner NUS in the initiative and was optimistic about the direction of the Institute. “The public understanding of risk is one of the four strategic themes of the Lloyd’s Register Foundation and working in true partnership with NUS is going to make real impact in this field for the ultimate benefit of society,” he said.

The Institute’s vital role was underscored by a recent study conducted in China and India by NUS researchers where participants were asked to estimate the frequency of events which entail either economic, environmental, geopolitical, societal or technological risks. The estimates were benchmarked against established data on the true frequency of such risks, to gauge the difference between perceived risk and actual risk. The study showed that people tended to overestimate the likelihood of events such as a terrorist attack, and underestimate the likelihood of other occurrences such as cybercrime.

The Institute plans to undertake up to 30 research projects in the first five years, with a projected staff strength of 50 researchers at steady state. It also aims to attract up to 20 distinguished visiting faculty, train 25 post-graduate students and offer up to 30 Fellowships. In addition, two PhD scholarships in risk communication will be awarded each year.

See press release and media coverage.