Risk management should be more than a paper exercise, says Stuart Benson. What's more, legal directors should be leading the way
At the time, the conversation seemed bizarre. I was about two years’ qualified and the client was managing director of a mid-sized company in the manufacturing industry. He wanted to sack his credit controller and sought advice on employment law. What surprised me was the reason he gave: “We do not have enough bad debts”. When he explained his reasoning it made perfect sense. If a business takes no risks, it does not grow and it achieves no success.The credit controller was refusing to allow credit to any customer other than blue-chip companies. Consequently, most potential customers were going to be competitors. Imagine a venture capitalist who is only prepared to invest in absolute sure-fire, risk-free certainties.The trick is to identify and understand the risks in advance, have a clear idea of what the potential benefits are and be prepared to take quick and appropriate action if the risk looks like turning into an actual problem.There is nothing new in the proposition that life (and more specifically business) is a series of risks and opportunities:
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