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this episode a video vocabulary the first of a two-part series on vocabulary
related to risk management in this episode
we'll take a general look at risk management in the business world
the new
all businesses have to deal with risk
but successful businesses are the ones that employees good risk management
risks come in all shapes and sizes
a risk could be a minor critical event
any event that may or may not affect the operations up the business
or it could be va
till it E in finance
all markets or it could be something major like the possibility of a natural
disaster
such as a flood
along with corporate governance and compliance
risk management is an important part
organizational planning and decision-making
companies me
due diligence in these areas in order to be successful
of course different companies will think everest differently
some will accept much greater exposure to risk
than others in this case we say they have a greater risk appetite
this may be partially determined to how much public scrutiny
the corporation is subject to resource companies
for example may be watched very carefully
to manage risk well companies have to learn to diagnose potential problems
they use critical incident analysis
to determine what types risks they face
and how best to prevent or deal with them
in him now let's look at the vocabulary in more detail
with some definitions and examples
risk risk management
risk is the idea that certain events or situations
can potentially bring losses to accompany the losses could affect
finances
image operations or any other aspect of business
investments that involved a lot of a risk often provide much larger returns
who
critical love it
critical event
a critical event is anything that happens which is potentially damaging to
our business
aka love it could be a small is running out of printer ink
or as large as an industrial accident
during a critical event a company's leaders
need to clearly communicate their response to all stakeholders
volatility volatility
till at: is the tendency to change for better or worse
suddenly or surprisingly
a volatile investment such as investing in a new tech companies start-up
can be risky but also bring great profits
political
levels have brought a lot of volatility to the stock market
natural disaster
a natural disaster is an event in nature that causes destruction
damage or social problems hurricanes volcanic eruptions fires
heat waves avalanches and routes are all examples of natural disasters
a natural disaster such as an earthquake or flood
conserve really impact a small country's economy
0
Vern its
corporate governance
corporate governance relates to how well a company is managed
when we talk about good corporate governance we're talking about
responsible
and transparent decision-making and leadership
good corporate governance is especially important
in times of economic instability
compliance
following rules regulations in-laws
is compliance
verb form of compliance is comply and we can say that a company complies with
regulations
our lawyers have reviewed the contract to ensure that were in full compliance
with industry
regulations
due diligence do
diligence
when we do all the
sherri research and investigation before making a decision
for signing a contract we are performing due diligence
due diligence might show that people were not honest about profits
or potential problems
before buying a business you must perform due diligence on both the
business
and the seller
exposure
exposure to risk
in risk management exposure is about how much risk you face
hi exposure operating in a politically unstable country for example
means you face a lot a brisk and a lot of potential damage
my financial advisor said my exposure to risk
was too great and recommended more secure investments
for risk appetite
risk appetite
the amount
risk or level love exposure that a company is willing to accept
is its risk appetite people and companies with a high risk appetite
such as venture capitalists usually anticipate great future profits
the company experienced many crises because its risk appetite was too high
public scrutiny
scrutiny is close examination or study
public scrutiny therefore is when the public
looks closely at a person or company especially to see whether their behavior
is
ethical or legal
after scandals in companies such as in Ron corporate accounting is subject to
much greater public scrutiny
diagnosis
to diagnose a problem
when we diagnose a problem we are trying to find the cause I love
or reasons for that problem
just as doctors diagnose diseases in business
we may try to diagnose what is wrong with the company
an agreement a product or a situation
as a consultant it's my job to diagnose potential problems
with our clients business plans
0 critical incident analysis
critical incident analysis
critical incident analysis is a set of techniques or methods
that are used to to find and solve problems in the company
a process or a system
critical incident analysis has provided our company
with the tools to deal with big problems when they happen
the new now it's your turn to practice some other words we've looked at in this
episode
you'll hear a series of sentences with the word replaced with the beat
repeat the whole sentence including the missing word
for example if you hear investors with a high risk
should be prepared for possible losses
you can say investors with
high-risk appetite should be prepared for possible losses
will play the correct answer after each question
be ready let's begin
0
before signing the merger agreement we spent three months doing do
answer before signing the merger agreement
we spent three months doing due diligence
an important part of good corporate
is transparency
answer an important part of good corporate governance is transparency
at the beginning have a critical
people may panic
answer at the beginning at a critical event
people may panic
we are open to public
because we have nothing to hide
answer we are open to public scrutiny
because we have nothing to hide
the new that's all for this episode a video vocabulary
come back next week for the second part in this series
in the meantime check out our website at www
dot video vocabulary TV to watch
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thanks for watching and see you again soon