Every opportunity carries a risk, the two are inseparable. The only question is how well you use your opportunities, and in doing so, to what degree you keep your risks under control.

Even if the topic sounds unimportant, it is only in a very few medium-sized companies that a functioning risk management system can be set up without external help. Often what is missing are continuity and suitable communications about risk. However this is much easier to install than many other business processes.

There are three challenges in risk management:

• To recognise all risks in a structured way, or as we say, to have them on the radar.
• To regularly exchange information internally about risks.
• To develop the correct counter-measures in good time from the results of analyses.

The need for risk management:

The demand for establishing a risk management system comes from three sources:

• The strategic stabilisation of the success process:
  

  Ensuring the ability to supply with shorter and shorter reaction times for risk prevention.

• The legal requirements of many types of business:
  

  Among them those of KonTraG (German Law on Monitoring and Transparency in Business).

• Bank demands for provision of credit following “Basel II”
  

  Bank ratings are becoming much more stringent.