Risk Flashcards
Describe “financial risk”.
The failure to properly budget, and forecast, and report, and manage the organization can cause real dollar losses. In public companies, this can affect profits and stock price. In private companies, it can affect profits as well.
Describe “operational risk”
Operational risk is any risk that could affect an organization not being able to function properly.
For example, in cybersecurity: If systems are down and there’s no developed backup plan, that can lead to a company simply stopping functioning altogether until the problem is identified and rectified.
Describe “reputational risk”.
These are the risks that can be the ones that corporate executives fear the most. Negative impressions in the minds of the public can cause a company to seem less stable, less reliable, and diminish the confidence in them. This could affect consumer’s interest in buying from them, or strategic partners willing to work with them, and even investors willingness to invest with them.
The power of the press, as you can see, can be a lot more impactful than financial and operational setbacks.
