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Why managing risks must be at centre of running companies
Sophisticated investors around the world focus on the nature and extend of risk in companies and industries in which they invest. FILE PHOTO | NMG
Running any enterprise involves risk, which can only be avoided by choosing to do nothing — and still then unexpected events can occur.
In many business situations the greater the risk the greater the potential return to the enterprise. The challenge is to balance risk with acceptable reward. In other words, boards need to understand the exposure of their companies to risk, determine how those risks are faced and ensure that they are handled appropriately.
