by Business English Pod dot com

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this episode a video vocabulary the first of a two-part series on vocabulary

related to risk management in this episode

we'll take a general look at risk management in the business world

the new

all businesses have to deal with risk

but successful businesses are the ones that employees good risk management

risks come in all shapes and sizes

a risk could be a minor critical event

any event that may or may not affect the operations up the business

or it could be va

till it E in finance

all markets or it could be something major like the possibility of a natural

disaster

such as a flood

along with corporate governance and compliance

risk management is an important part

organizational planning and decision-making

companies me

due diligence in these areas in order to be successful

of course different companies will think everest differently

some will accept much greater exposure to risk

than others in this case we say they have a greater risk appetite

this may be partially determined to how much public scrutiny

the corporation is subject to resource companies

for example may be watched very carefully

to manage risk well companies have to learn to diagnose potential problems

they use critical incident analysis

to determine what types risks they face

and how best to prevent or deal with them

in him now let's look at the vocabulary in more detail

with some definitions and examples

risk risk management

risk is the idea that certain events or situations

can potentially bring losses to accompany the losses could affect

finances

image operations or any other aspect of business

investments that involved a lot of a risk often provide much larger returns

who

critical love it

critical event

a critical event is anything that happens which is potentially damaging to

our business

aka love it could be a small is running out of printer ink

or as large as an industrial accident

during a critical event a company's leaders

need to clearly communicate their response to all stakeholders

volatility volatility

till at: is the tendency to change for better or worse

suddenly or surprisingly

a volatile investment such as investing in a new tech companies start-up

can be risky but also bring great profits

political

levels have brought a lot of volatility to the stock market

natural disaster

natural disaster

a natural disaster is an event in nature that causes destruction

damage or social problems hurricanes volcanic eruptions fires

heat waves avalanches and routes are all examples of natural disasters

a natural disaster such as an earthquake or flood

conserve really impact a small country's economy

Vern its

corporate governance

corporate governance relates to how well a company is managed

when we talk about good corporate governance we're talking about

responsible

and transparent decision-making and leadership

good corporate governance is especially important

in times of economic instability

compliance

compliance

following rules regulations in-laws

is compliance

verb form of compliance is comply and we can say that a company complies with

regulations

our lawyers have reviewed the contract to ensure that were in full compliance

with industry

regulations

due diligence do

diligence

when we do all the

sherri research and investigation before making a decision

for signing a contract we are performing due diligence

due diligence might show that people were not honest about profits

or potential problems

before buying a business you must perform due diligence on both the

business

and the seller

exposure

exposure to risk

in risk management exposure is about how much risk you face

hi exposure operating in a politically unstable country for example

means you face a lot a brisk and a lot of potential damage

my financial advisor said my exposure to risk

was too great and recommended more secure investments

for risk appetite

risk appetite

the amount

risk or level love exposure that a company is willing to accept

is its risk appetite people and companies with a high risk appetite

such as venture capitalists usually anticipate great future profits

the company experienced many crises because its risk appetite was too high

public scrutiny

public scrutiny

scrutiny is close examination or study

public scrutiny therefore is when the public

looks closely at a person or company especially to see whether their behavior

is

ethical or legal

after scandals in companies such as in Ron corporate accounting is subject to

much greater public scrutiny

diagnosis

to diagnose a problem

when we diagnose a problem we are trying to find the cause I love

or reasons for that problem

just as doctors diagnose diseases in business

we may try to diagnose what is wrong with the company

an agreement a product or a situation

as a consultant it's my job to diagnose potential problems

with our clients business plans

0 critical incident analysis

critical incident analysis

critical incident analysis is a set of techniques or methods

that are used to to find and solve problems in the company

a process or a system

critical incident analysis has provided our company

with the tools to deal with big problems when they happen

the new now it's your turn to practice some other words we've looked at in this

episode

you'll hear a series of sentences with the word replaced with the beat

repeat the whole sentence including the missing word

for example if you hear investors with a high risk

should be prepared for possible losses

you can say investors with

high-risk appetite should be prepared for possible losses

will play the correct answer after each question

be ready let's begin

before signing the merger agreement we spent three months doing do

answer before signing the merger agreement

we spent three months doing due diligence

an important part of good corporate

is transparency

answer an important part of good corporate governance is transparency

at the beginning have a critical

people may panic

answer at the beginning at a critical event

people may panic

we are open to public

because we have nothing to hide

answer we are open to public scrutiny

because we have nothing to hide

the new that's all for this episode a video vocabulary

come back next week for the second part in this series

in the meantime check out our website at www

dot video vocabulary TV to watch

and download lots more videos on business English vocabulary

thanks for watching and see you again soon