FAQ

What are the 5 main risk types that face business?

There are 5 main types of risks that businesses face:

  • Strategic risk: This type of risk arises from a business’s failure to make sound decisions regarding its goals and objectives. Strategic risks can arise from changes in the market, shifts in customer preferences, or failure to adapt to technological changes.

  • Financial risk: Financial risks are related to the potential for financial loss or instability. These risks can arise from factors such as changes in interest rates, currency fluctuations, or default on loans.

  • Operational risk: This risk type emerges from the day-to-day operations of a business. Operational risks can result from inadequate internal processes, technology failures, or supply chain disruptions.

  • Compliance risk: Compliance risks result from a business’s failure to comply with laws, regulations, or internal policies and procedures. These risks can result in fines, legal penalties, and reputational damage.

  • Reputational risk: Reputational risks are related to damage to a company’s brand or reputation. These risks can arise from factors such as product recalls, ethical violations, or negative publicity.

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