Risk management
The process of identifying, assessing, and addressing risks that could compromise a company’s objectives. The output is a risk map weighted by probability and impact, with prioritised mitigation plans for each material risk.
In practice
Risk management is a decision-making tool, not a compliance exercise. For an SME, priority risks are typically: client concentration above 30 percent of revenue, key-person dependence, liquidity risk from long debtor days, and sector regulatory exposure. Each calls for a concrete action: client diversification, key-man insurance, invoice factoring, regulatory monitoring. Mapping risks without acting on the top five is a common governance failure.