What is risk management?
A certain amount of risk is inevitable in any business. Working with partners and suppliers, employing staff, launching new products, competing with other businesses and expanding into new markets all open you up to some level of risk. The question is, how much risk can you afford to take with your business?
Risk management is the practice of pinpointing potential risks ahead of time, then evaluating , prioritising, and taking steps to mitigate or avoid risk altogether. Effective risk management involves putting processes in place for:
- conducting thorough background research
- protecting your digital assets, such as proprietary data, intellectual property and customers’ private information
- complying with standards, regulations, laws and codes of practice.
By closely monitoring and minimising risk, you can reduce the likelihood of negatively impacting your operations and maximise your business opportunities.
Types of business risk
- Strategic risk is risk that could keep your company from achieving its strategic goals and objectives.
- Financial risk concerns fiscal transactions and your financial systems
- Compliance risk refers to the necessity to adhere to standards, codes of practice, regulations and laws.
- Operational risk involves your administrative and operational policies and procedures.
- Environmental risk relates to external incidents that are often beyond your control, such as natural disasters, inclement weather and uncertain economic conditions.
- Reputational risk refers to public regard for your company.
Why is risk management so important?
Risk management is a key component of strong management and corporate governance. A strong risk-management plan allows you to prepare for the unforeseen and unknown, so you can mitigate risk, curtail costs to your organisation and protect the future of your business.
With robust risk management, you can:
- save time, money and assets
- protect people, property and the environment
- reduce legal liabilities
- bolster your operational stability.
The better your risk management, the stronger, faster and more assured your critical decision-making can be.
- current and archival news dating back 40 years
- sanctions lists, watchlists and politically exposed person (PEP) lists
- executive, company and industry data
- in-depth risk analysis reports.
Diligence® also integrates a Report Builder that enables you to maintain verifiable due diligence audit trails to help you satisfy regulatory requirements and remain compliant.
With Diligence®, you can better understand your customers, employees, partners, suppliers and competitors so you can manage risks that could disrupt your business. The tool can also help you boost productivity, increase profitability, and inform and improve your decision-making.
LexisNexis Entity Insight® is another tool for your risk-management arsenal. This supply-chain solution provides more transparency into your business risk and provides you with the information you need to proactively make decisions and pre-empt problems. You’ll gain invaluable insight into your global supply chain, partners, vendors and other business relationships – all of which expose your company to some degree of risk.
Armed with this information, you’ll be in a much stronger position to protect yourself from regulatory, reputational, strategic and financial threats.
By conducting global adverse media monitoring and capturing actionable business intelligence on your supply chain and third-party networks, Entity Insight® helps you manage risk and informs your decision-making.
The tool uses a PESTLE (political, economic, sociocultural, technological, legal and environmental) scoring framework that supports your company’s risk-based approach and helps you more quickly identify supply chain and third-party risk. It aggregates market intelligence and premium news sources that you typically don’t have access to on the open web, so you can paint a more comprehensive picture.
With Entity Insight’s® easy-to-use risk-management dashboard, you can:
- review a snapshot of risk levels and trending risk areas before drilling down into specific risk profiles
- manage active and pending entities, as well as the related RSS feeds
- visualise news volume for all active entity mentions, colour-coded by PESTLE category
- pinpoint the top 10 news volume trends among active entities and risk topics
- explore the context of adverse media mentions and mitigate emerging risks.
The tool provides access to:
- global watchlists
- sanctions lists
- politically exposed person (PEP) databases
- negative-news searches.
From these searches, you receive near-real-time results that enable you to make more informed business decisions and confidently move your business forward.
BatchNameCheck® automates background checks, strengthens your due-diligence practices and keeps you alert to compliance risk.
Ultimately, understanding and effectively managing your risk will help protect your business from financial, regulatory and reputational damage.