‘Risk, Inevitable Component Of Business’
THE Managing Director, Nestle Nigeria LTD, Dharnesh Gordhen has emphasized the inevitability of risk in any business endeavor, saying it is the DNA of a business enterprise. Gordhon, who was at the 10th edition of LEAP Africa (Leadership, Effectiveness, Accountability and Professionalism in Africa), urged Chief Executive officers of companies to identify and mitigate risk in order to maximize profit and to remain in business.
The Executive Director, Finance and strategy, Sterling bank, Abubakar Suleiman, acknowledged risk in business, but said his bank would be ready to provide counseling service needed to reduce financial risk and business failure. According to him, many small and medium business owners have not been able to document their past success, making it difficult for banks to fund them. He said banks would not render assistance, unless they see document that forecast their future cash flow.
Financial risk, according to him, is the initial risk that one is exposed to after a decision to start a business. “When starting up your business, it is necessary to document your business transactions through financial accounts, audited account and other methods of documentation.
This would enable future stakeholders to interpret and have clear understanding of your business background. On currency risk, there must be a risk management plan and system of transferring risk to anther company, such as the insurance companies,” he said.
Meanwhile, Adepeju Adebajo, Managing Director of Lafarge Cement, said there was need to mitigate risk by identifying risks ahead of time, treat risk through insurance and outsourcing it, if the necessary. In addition, the audience was encouraged to remain optimistic at all times. Oluwole Oshin, Managing Director of Custodian And Allied PLC, lamented the low penetration rate of insurance in Nigeria due to mistrust by citizens.
“The only way to grow your business and take it to the next level without having to look back is to transfer that risk to another existing party, like an insurance company,” he said.
On her part, Claire Omatseye, the Managing Director, JNC International Nigeria Ltd, stressed the importance of risk management culture in business. She said there was need for risk awareness among all workforce of an organisation.
“Every company should develop a strategy on how to manage their risk. Leadership and employees must understand what risk is. Employees must be informed by their employers of the risks being faced by their companies and be encouraged to operate as intrapreneurs. If something goes wrong, we shouldn’t blame the administration, but ourselves.”
The LEAP Africa is one of Nigeria’s leading development and non-profit organisations that strives to empower and equip youths and entrepreneurs. It is aimed at transforming Nigerians into dynamic and ethical leaders, who will in turn improve economic development in Africa.
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