Smart Risk Management

11

The Wide World of Risks

After reading this chapter, you should

• understand that risk comes in many forms and from many sources.

• be able to use this information to broaden your risk management plan.

• find many useful risk mitigation ideas.

Risk in Weather

Today the weather has become a major risk. Look at the effects of the Icelandic volcano Grimsvötn, and the impact on businesses and their employees in the United Kingdom and Europe. One strategy you can pursue to minimise the risk and cost of weather-related incidents is reviewing your insurance coverage.

Risk in Geopolitics

Even violence from events that are unrelated to your business can spill over to your organisation; therefore, you must have a response plan to address them if they occur. We saw an example of this risk in Zurich during the World Trade Organization demonstrations in 2009.

Due to globalisation, leaders of organisations need to face up to political risk. You may not have physical locations outside your country, but your customer base, your distribution channel, or even your main suppliers could immediately be out of commission or subject to huge costs for doing business in some nations. Countries around the world have political leaders who feel that it is their right to change the rules in the middle of the game. Companies doing business in foreign markets also face up to the risk over the confiscation or appropriation of their property, politically motivated violence, and the problems of managing local currency. ...