Business risk comes in many forms and like all risks, really the key, wherever possible, is to identify the risk, weigh it up against the possible reward of any given transaction or other business issue and then to make an informed decision. In business, it is rarely possible to completely erradicate all risk.
Sources of help and guidance for dealing with business risk also come in myriad form. At core, solicitors and accountant deal with risk evaluation and mitigation, IT and computer forensics staff dela with computing and IT risk, actuaries deal with insurance modelling and risk and so on.
However, one for of risk analysis often overlooked by many companies is the benefit of enhanced due diligence. You can have all the paper exercises you want in terms of contracts, warranties, looking at historiocal accounts and so forth but at the heart of any business is the peopel owning and controlling it, and as the famous saying goes, “past performance is the best guide to future performance”. So, with any high value or high importance business issue, is it not worth properly checking out who you are dealing with ?
there are many ways of undertaking due diligence, it is a specialised and highly discreet area, but an enhanced due diligence report can provide a way of double checking the bona fides and integrity of a possible business partner.
Ina world where it is regrettably becoming more and more common for people to embellish the truth (look at self certification mortgages, job applications and insurance claims to name a few examples) background checks have never been more important.