The biggest risk an entrepreneur can
take is not to think about risks at all.
It is therefore wise to identify the risks
that a company is exposed to in order to
control them where possible, also known
as risk management. In this way, costs
can be saved and more profit generated.
After all, prevention is always better than
cure. Risk management is an ongoing
process that requires in-depth knowledge
not only of a business, but also of the
environment in which the business
operates. This includes legal risks, as
well as legal solutions to other kinds of
risks. Therefore, apart from a CEO (Chief
Executive Officer) and a CFO (Chief
Financial Officer), an increasing number
of organizations also have a CRO (Chief
Risk Officer), often a former lawyer.
With Risks?
with risks:
It's very important, however, that an
insurance policy include the risk that
needs to be covered.
activities will not be performed
because the risk is too big.
to control the risk. Any available
opportunities can be taken while
any potential negative effects will
be limited as far as possible. Legal
means play an important role in this,
as the following overview of different
types of risks will show.
And what opportunities are there to
limit these risks by legal means? Some
obvious risks include changes in the
global market, unprofitable investments,
fire, liability, defective product liability
defaulting suppliers and customers. The
different types of risks are generally
divided into five categories: (1) strategic
risks, (2) operational risks, (3) financial
risks, (4) risks in the area of knowledge
management and (5) compliance.
reputation, badly executed mergers
and acquisitions, not having the right
or most recent software, and major
changes in regulations. An entrepreneur
who is aware of imminent safety and
environmental requirements can
anticipate risks and thus stay one step
ahead of competition.
An important tool to limit strategic
risks is the corporate structure. How do
you prevent a poorly performing business
unit from dragging along the entire
business? Establishing subsidiaries
is one way to prevent this. A business
owner who intends to determine a
corporate strategy is well-advised to
consult his outside corporate counsel.
Russell Advocaten B.V. He is an experienced outside corporate
counsel to both domestic and foreign businesses in the
Netherlands. He deals with business formation and reorganization,
corporate governance, insolvency law, employment issues, real
estate issues and all aspects of liability and contract law.
Reimersbeek 2
1082 AG Amsterdam
Netherlands
+31 20 301 56 78 Fax
russell.nl