Equity Value Enhancement

Chapter 7The Role of RiskFinancial- and Legal-Oriented Risk

Founders, CEOs, boards, and trusted advisors tend to gravitate toward financial control, examining and reviewing figures, percentages, and ratios for current performance metrics. This is not strategy, which requires a well-considered overarching perspective that drives governance/culture, relationships, and the use of knowledge to provide a means to identify, measure, manage, and mitigate risks. In short, an owner's strategy should tap into human capital in order to enhance shareholder value in the most efficient and effective way possible.

This is one of two chapters that delve into company specific risks. They comprise the majority of this book, which is partially the point of writing it. That is advisors and appraisers of all stripes can best assist stakeholders by identifying, measuring, managing, and mitigating risk, which in turn increases value. This is why I state, “Values are more than just a number.”

For full disclosure, these chapters and this book are the author's own viewpoints and not necessarily that of the associations of which I am a member or the companies in which I am employed or a shareholder.

Further, there are limitations to this book. It is hoped that discussions ensue on how to take specific indicators and develop quantifiable measures to support enterprise and equity level risks. This would entail both selecting which risks are applicable, what degree they individually and collectively ...