As we enter the last month of 2021 and stand on the threshold of a new year we should be reminded that risk and the mitigation of risk are vital components of the efficacy of any project. We at Glenn Rooseboom Attorneys, Notaries and Conveyancers are experts in the legal aspects of Risk Assessment and Mitigation, but for the uninitiated what exactly is risk and the mitigation of it and how do they affect your business?
Risk has always existed, as has the mitigation of risk, and risk is not necessarily a bad thing. The identification or assessment of risk in a universal manner and mitigation of it is something, however, that has developed substantially in recent times as a basic management and governance tool.
We are all aware of the general meaning of risk. We all face risks of many kinds in our everyday lives. We don’t need to remind you that simply getting into your car to embark on your annual vacation carries with it an element of risk. (On that note, we urge all our clients to drive safely and alert at all times. Please return safely to celebrate 2022 with us!)
Whilst you are on your vacation however you may want to give a little more thought as to what type of risk you face and how we can help you with it – so this is the focus of our articles for this month.
What is Risk in business?
As one observer put it “Business risk involves the possibility of financial and operational difficulties in the business environment”. So every business faces an element of business risk and due in some cases too low capital or resource availability small businesses are often more susceptible to business risk than larger entities.
Different types of business risk exist in the economic environment, with each type of risk presenting different challenges and implications for business owners to overcome. Business risk can result from overall economic conditions, changes in government and monetary or fiscal policies that create riskier situations for businesses.
Other forms of risk may emanate from cyberattacks, weather events and other causes of physical or virtual damage. It stands to reason therefore that the mitigation or ‘moderation’ of risk is pretty vital for any business!
What is risk mitigation?
One definition puts it like this: “Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business. Comparable to risk reduction, risk mitigation takes steps to reduce the negative effects of threats and disasters on business continuity”.
What are a few of the risk strategies that mitigate risk in a business?
- Risk acceptance – Sometimes it makes sense to accept the risk if the cost of mitigating or avoiding it would be higher than accepting it as fair risk and letting things play out.
- Risk avoidance – When the risk is too great, it may be better to avoid it. So, risk avoidance means not performing whatever project or activity causes that risk.
- Risk mitigation – This refers to the ways your business can control or moderate the risk. When the risk is identified you can allocate resources like appointing Attorneys to conduct “Risk Management”.
There are also risk reduction and risk transfer options but these are generally decided as a part of risk management.
Let your Attorney handle your Risk Management
One of the great things about holidays is that they give you time to unclutter your brain and free it up for some clearer thinking and foresight. Don’t go through 2022 with a business that is facing too much risk and not have it expertly managed by a professional law firm.
Attorneys have a major role to play in “risk management” and Glenn Rooseboom Attorneys Inc. is just the partner you need, so contact us in the new year – and hey it’s the season for giving so share this with your colleagues too! We wish you happy holidays – and watch this space for some holiday reading on ‘What do Attorneys have to do with risk management?’