| Business is all about maximizing profits while minimizing | | | | associated with insurance that may be purchased |
| expenses. While certain corporate risks pose | | | | against a certain risk. Then, discuss purchasing |
| everyday dangers to entrepreneurs - and not just | | | | insurance coverage for certain risks that can be |
| financial hazards - most execs fail to identify these | | | | controlled; this will allow the executives at a company |
| risks, let alone catch on to something fishy going on. | | | | to manage certain business risks (tornados, flash |
| Protection techniques in regards to proper asset | | | | floods, and so on). |
| management, extortion, blackmail, kidnapping, | | | | 2. Analyzing a corporate risk |
| terrorism and vandalism (just to name a few) are | | | | Here's a great example of a financially unpleasant |
| needed. Other corporate risks include disease | | | | corporate risk that we probably all know of: the 2008 |
| epidemics that may affect your staff, lack of | | | | housing market crash. Subprime lenders exchanged |
| transparency - and therefore accountability - in your | | | | mortgage related cash flow prior to a particular day. |
| company, shady investments, and other | | | | This was a risky move that turned out to be |
| miscellaneous crime that may affect your assets | | | | unfavorable to the risk holders, who ended up paying |
| such as arson, malicious destruction of property, etc. | | | | more money than originally planned. Poor business risk |
| Each business has unique needs that require unique | | | | analysis was implemented on a large scale in this case. |
| approaches; this is why corporate risks can be hard | | | | Failing to factor in things like inflation and the national |
| to comprehend, and it's also why many executives | | | | debt putting greater struggles on citizens than |
| are oblivious to threats that they might not even be | | | | expected cost these companies billions. |
| aware of. | | | | 3. ActionProper action not only includes |
| Like corporate fraud, corporate risks differ, but they | | | | implementation of measures to prevent corporate |
| all share the same concept. A corporate risk is a | | | | risks, but also frequent consideration for alternative |
| hazardous position which a company has to face. | | | | measures to come in place, as well as monitoring of |
| One way to deal with it is to ignore it. Another way | | | | progress with the current situation. For instance, |
| to deal with it is to follow the rule of three As: | | | | keeping statistical information on earthquakes in |
| carefully approach the situation, analyze it, and take | | | | California, along with annual comparison shopping for |
| action against it. | | | | more competitive insurance rates is an example of |
| 1. Approaching a corporate risk | | | | business risk prevention action. |
| Consider the chances of a particular accident | | | | Approach, analyze, action. It's not as easy as simply |
| occurring. For example, determine the chances of a | | | | ignoring a business risk, but your business will be |
| fire based on fire safety of your office, as well as its | | | | better off this way. If a risk can't be fully eliminated, |
| location and the type of business you're running (ex, | | | | consider minimizing it. Financial risks can also be |
| a computer center is more likely to catch on fire than | | | | transferred or deferred until a later time. |
| a pool facility). Document potential losses and costs | | | | |