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Risk Mitigation - What Is The Formal Process?

Risk Mitigation

One hears quite a bit about “risk mitigation” these days. Can someone describe the crucial elements of a formal process and how best to comprehensively pursue same? I'm especially interested in intellectual property, compliance and currency risk.


Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Very general question --
IP - start with a lawyer that specializes in that field.
Compliance is relative to your industry. A compliance expert at GM would be very different from a compliance expert at J&J.
Currency Risk - there have been volumes written on this subject. Your risk has a relationship to your level of activities.
There are internal activities that should be pursued from a company standpoint.
What type of framework and in what industry are you most interested?

(Manager) |

Our company manufactures specialized equipment for oil exploration. Thus the IP, compliance and currency risk mitigation interests. Thanks!

Matthew Vallarino
Title: partner/controller
Company: yieldforprofit/TTFF
(partner/controller, yieldforprofit/TTFF) |

Though your issue is quite common, without a clear context, framework and analysis there is little we can do to assist you.

Risk mitigation is usually the last step and/or included in the action plan in a formal (Enterprise) risk management programme. Risk management is a continuous process thus must carefully follow simple, yet fundamental steps to support organisational objectives.

You have mentioned intellectual property, compliance and currency as your risk domains but you haven't stated the specific risks (and their associated probabilities and impacts) within each one.
Eg. Intellectual property: the probability and impact of someone using your idea/methods/technology; Compliance: impact and probability of changes in regulatory environment, safety/environmental standards, employment/labour laws for both you AND customers/suppliers etc; Currency (or Macro/Political) risks: the risks of contracts and sales orders being repaid with depreciated currencies. Often the domains are related to each other such as with currency and compliance: eg. GAAP, IFS standards for valuing financial instruments.

The first two types of risk could potentially be resolved in collaboration with legal experts and the last in combination with your bank and chartered accountant. The bank will be able to provide some factoring services or simply with a forward contract depending how complex your supply chain is and your accountant should be able to consult you in regards to fiscal/tax effects of your decision.

Furthermore, it's also very important to understand your organisation's culture and appetite for risk. The latter is it's imperative in order to understand what the risks are and what you can do ultimately accepting/not accept them.
Remember: You can control the process but not the outcome. Control the process and the results will be favourable over the long run.

I hope this helps and good luck,


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