Operational risk

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Risk identification and management.


Operational risk is the risk of adverse effects resulting from inadequate or failed internal processes, people and systems and / or external events such as adverse changes to the economic environment.

Investors in companies generally expect the Board to mitigate or minimise these risks, to ensure that they cause as little harm as possible to the organisation.

Operational risks include - among others:

  • Operations risk;
  • Systems risk;
  • Legal risk; and
  • Weather risk.

Also known as operational exposure.

See also