There are many factors that can converge

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To create business risk. Sometimes, it is the leadership or senior management of a company that creates situations in which the company may be exposed to a greater degree of risk. Importance of business risk management? Without an effective risk management plan, a company cannot determine its future goals. Arguably one of the most important aspects of an organization, business risk is properly managed because it protects the organization from losses and enables it to capitalize on opportunities. By developing a proper plan, risk management maximizes valuable company resources such as time, income, and even quality employees; It also protects the people involved in the business, from customers and employees to key stakeholders; It reduces any legal liability or threat of litigation. The importance of risk management in an organization is determined by its treatment of factors inside and outside the business. A good example of this is the impending data protection regulation. As the May 25 deadline for the.


European Union's General Data Protection Regulation approaches, companies should take steps to evaluate and strengthen their internal governance. Non-compliance is just one internal issue that poses a risk to organizations, in addition to the very phone number database scary reality of data breaches. Effective risk management must include crisis and reputation management in its strategy, especially as a strong reputation enhances trust in customers, stakeholders and business partners alike. All of this is to enhance the growth and success of any organization that is only as profitable as rebranding allows it to be. Types of business risks There are many business risks, which we summarize below: 1- Compliance risks Compliance risk represents a risk to a company's reputation or finances due to the company's violation of external laws and regulations or internal standards.

   


Compliance risks can result in a company paying punitive fines or losing customers. Example: If employees of a manufacturing company do not follow government safety regulations while building machinery, their behavior may be a compliance risk for the company. 2- Legal risks Legal risk is a speciftype of compliance risk that occurs when a company fails to follow government rules for businesses. Legal risks can lead to expensive lawsuits and a negative corporate reputation. Here are some types of corporate legal risks: 1- Contractual risks occur when the company does not fulfill the obligations contained in the employment contract. 2- Conflict risks occur when a legal conflict with a client, stakeholder, or community member interrupts the company’s operations. 3- Regulatory risks occur if the government regulator withdraws the company’s license to operate.