Risk Architecture in Corporate Groups

This module is based on chapter 4, “Risk Architecture in Corporate Groups”, from “Entrepreneurial Structural Intelligence”. Structure is not just capital organization. Structure is primarily risk management. Many entrepreneurs underestimate that risk does not arise from events but from the structure. An identical economic event can – depending on the structure – be either harmless or existentially threatening. 4.1 Operational Risk vs. Asset Risk Operating companies bear: Personnel risk Contractual risk Liability risk Market and sales risk Asset-holding companies own: Real estate Equity participations Liquidity reserves Trademark rights Blending these two levels creates a structural concentration risk. Example: A restaurant GmbH operates a venue and simultaneously owns the property. If there is a: Revenue slump Lawsuit Insolvency not only the business but also the property value is at risk. Structural separation means: Operational risks remain within operations. Assets remain isolated. 4.2 The Principle of Ris...