As the new year and the new decade starts ramping up, now is the time to evaluate the risks that can potentially impact your business. Take a moment to review how your risk management team operates, how they identify day-to-day, month-to-month, and quarterly risks to your enterprise, and also evaluate how you are mitigating those identified risks. Here is a short checklist to keep your risk management system lean and efficient in the new year.
What risks could result in legal action or worse, criminal action for your company? Do you have a full inventory of these risks? Have you reviewed new compliance and federal regulations impacting your industry or the clients you serve? Make sure your Chief Compliance Officer and your Chief Risk Officer are up-to-date on the latest in regulatory changes.
What currencies do you do business in? Are there countries where currency fluctuation could be substantial in 2020? See what you can do in future contracts and business decisions to minimize your risk here.
Very few companies are cyber-fit. Take the time to give your business and its employees a cyber workout. Do a cybersecurity training, check in with your cybersecurity team, and consider purchasing cyber risk insurance while you have yet to have an incident. Don’t forget to check in with your IT team, your systems manager, and your data management provider to find out where the weaknesses lie.
How is your market changing this year? What competitors, customers, and providers have gone out of business in the last two years, and why? What do you need to do to stay innovative, and where are the weaknesses in your customer base and market share.
What does your average customer or client look like? How financially fit is your customer? What is the likelihood of non-payment, bankruptcy, or loan defaults? Make sure your credit risk, both for clients and for business partners, is manageable and well leveraged. Who is your backup provider for each of your crucial business inputs. Even if you’re not doing business with that provider now, you should always have a backup in mind.
These five steps don’t cover every risk your company may face this year, but they will hopefully point you in the right direction towards a healthy risk management program in your enterprise for 2020. Are you considering doing business in a new region, or introducing a new product? Consider Resolution Consulting as a resource for your newest project feasibility studies.