Board Member Andre Vermette has created the following list of the 50 most common risks, grouped into five main categories. Each risk has a definition and an example for better understanding.

OPERATIONAL RISKS
STRATEGIC RISKS
FINANCIAL RISKS
COMPLIANCE RISKS
REPUTATIONAL RISKS

OPERATIONAL RISKS

Operational Risks involve potential threats that impact the day-to-day operations of a business. Here’s a brief overview of common operational risks, including definitions and examples:


Cybersecurity Risk
Definition: The possibility of harm to systems, data, or operations caused by cyber threats, such as hacking, malware, or data breaches
Example: A ransomware attack encrypts a company’s files, forcing it to pay a ransom to regain access or risk losing critical business data.

System Outages
Definition: Disruptions in critical systems or software that affect business operations.
Example: An e-commerce website suffers a major outage during peak sales, causing significant revenue loss and customer dissatisfaction.

Employee-Related Issues
Definition: Challenges related to workforce management, including absenteeism and productivity problems.
Example: High turnover rates in a customer service department lead to inconsistent service quality and increased training costs.

Supply Chain Disruptions
Definition: Interruptions in the flow of goods or services from suppliers to the business.
Example: A retailer faces inventory shortages because a key supplier is affected by a natural disaster, delaying restocks and impacting sales.

Technology Malfunctions
Definition: Failures or issues with technology systems that support business operations.
Example: A company’s financial software crashes, causing delays in processing payroll and accounting transactions.

Project Delays
Definition: Extensions or interruptions in the timeline of project deliverables.
Example: A construction project falls behind schedule due to unexpected regulatory hurdles, increasing costs and delaying completion.

Operational Breakdowns
Definition: Major failures in the business’s operational processes or systems.
Example: An assembly line halts due to a critical equipment failure, leading to production stoppages and missed deadlines.

Internal Fraud
Definition: Theft or embezzlement of company assets by employees.
Example: An employee embezzles funds by manipulating financial records, resulting in significant financial losses.

Asset Mismanagement
Definition: Inefficient or ineffective handling of company assets.
Example: A company fails to properly maintain its machinery, leading to frequent breakdowns and costly repairs.

Cash Flow Problems
Definition: Difficulties in managing the inflow and outflow of cash, impacting the company’s liquidity.
Example: A startup struggles to meet short-term financial obligations due to delayed customer payments and high operational expenses.