Business Risk Management
Reputational risk is the risk of possible damage to your personal or company’s brand and reputation, and the associated risk to earnings, capital or liquidity arising from any association, action or inaction which could be perceived by stakeholders to be inappropriate, unethical or inconsistent with company’s values and beliefs. To manage reputation risk at speed, you need to be prepared and to have a rational contingency plan in place.
Financial risk can occur in personal life as well as in business operations. Managing or mitigating financial risk is related to eliminating or reducing risk factors that could ultimately leave you or your business in financial ruin. Financial risk can appear in many forms – from customers who fail to pay for their purchases, suppliers who fail to ship inventory, and even the company’s own business strategy, if risky decisions are made.
Operational risk is the risk of doing business – risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. To prevent situations that might be fatal to your company’s reputation and existence you should consider gaining a better understanding of your operational risk profile, to identify and mitigate risks which will allow for smoother business operations with no interruptions.
Compliance aims to establish behavior that is line with the rules. This includes compliance with applicable national and international laws and regulations as well as to the company’s ethical and moral principles. A compliance risk exists when an organization runs the risk of violating rules from these two areas – something that happens often in the real life.
Strategic risks are risks that affect a company’s business strategy or strategic objectives and potentially can affect the ability of an organization to survive. There are many possible kinds of strategic risk. In order to successfully mitigate these, you need to implement and follow a tailored risk management plan.