Four nonfinancial corporate risks

Go back to the [[Risk Management Main Page]]

There are nine main corporate risks.

The four most important risks are nonfinancial

1. Operational
2. Strategic
3. Reputation
4. Legal and regulatory

Operational

Tied to the day-to-day.

• Anti-virus software lacking
• Bad management
• Bad financial reporting
• People just doing their jobs wrong

Strategic

Companies don't invest when they should

• Taxis losing market position to ride-share companies
• Market disruption
• Blockbuster ignored online streaming
• eCommerce destroying bricks and mortar
• New Coke and Crystal Pepsi are the converse
• WiFi on airplanes before phones and tablets

Reputation

Reputation takes a long time to build and can vanish overnight

• Product recall
• Unethical leader being caught fiddling the books
• Frontline worker doing something horrible but public

Legal and regulatory

The kinds of risks that come from Government and regulatory institutions

• Subsidies
• Rules and red tape
• Regulatory challenges
• Main reason for lobbyists