Four nonfinancial corporate risks
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There are nine main corporate risks.
The four most important risks are nonfinancial
- Operational
- Strategic
- Reputation
- 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