Risk is inherent to business. How you manage it determines the effect on your business – a fundamental driving force pushing you forward or a damaging element bringing you down. 

This article is the first of a four-part series which we will cover over the coming month, highlighting the importance of risk mitigation in business. Today’s focus is on the three important areas of business – corporate governance, insurance, and cybersecurity. 

Corporate Governance  

Employee misconduct, ineffective policies, and weak compliance can cause instability within the organisation. When your business’ foundation isn’t strong enough, your entire organisation and even consumers will pay the price. 

Reinforcing your corporate governance is one of the best risk mitigation strategies. If your rules and policies are clear and provide direction to your stakeholders, it’ll be easier to create sound decisions in your business such as getting the right insurance policies, strengthening your cyber network, hiring the right people, and improving your customer service. 

Where should you begin to improve your corporate governance? Here are some pointers: 

  • Governance in your business should breed trust, transparency, and accountability 
  • Develop and implement formal procedures, regulations, and policies outlining ethical behaviour and practices 
  • Create a balance between the interest of various stakeholders 
  • Include the entire company in the process 

Effective corporate governance ensures that every member of your business knows and understands risks. This way, they can refrain from practices that can harm the business. 

Insurance 

Business insurance lessens the impact of risk and helps cover your financial responsibilities. In Australia, businesses are mandated to secure the following before operating: 

  • Workers’ compensation insurance (applicable if you have employees) 
  • Public liability insurance (covers the cost of third-party injury or death) 
  • Third-party personal injury insurance (required if you have a vehicle) 

You can find other types of insurance in Australia here. 

Before getting insurance, it is best to assess risks and review what insurance options your business requires. It is important that you choose the package that best suits your needs. 

Cybersecurity 

The message on the website banner of the Australian Government’s Cyber Security Centre is clear: “Cybercriminals don’t take holidays.” This serves as a reminder for you to never let your guard down. 

Cyberthreats such as malware, phishing, cloud jacking, and ransomware can cause devastating effects on a business – it can impair regular operations, damage reputation and lead to huge financial loss. To prevent this from happening, consider these tips: 

  • Identify all vulnerabilities of your existing technology 
  • Develop a sophisticated cybersecurity plan 
  • Get your entire company involved; educate them as much as possible
  • Choose a reliable software provider 
  • Protect and monitor network endpoints 

You can also visit Australia’s ACSC website to learn more about cybercrime. 

Conclusion 

Risk will always be a part of business due to factors beyond your control. While it can be challenging, facing and taking risks help your business achieve its goals. Improve your risk mitigation strategies in areas like corporate governance, insurance, and cybersecurity to protect your business from threats. 

Let Us Help 

If your business has a turnover of over $1 million, ABJ Solutions is offering a complimentary one-hour meeting to help answer questions and model critical decisions with you. Get in touch with us today so that we can help guide you through these challenging times.  

Interested to read more content to improve the way you manage your business? Click here to visit ABJ Solutions’ blogs.