Business English Vocabulary · Lesson 14

Sound Sensible When Discussing Risk

From weighing up the risks to taking the leap: the phrases senior professionals use to assess, discuss and manage risk – clear, precise and easy for everyone to understand.

ARead: taking a smart risk

Read the text. Pay attention to the phrases in bold – you will need them in exercise B.

How to take a smart risk

Almost every business decision comes with some kind of risk, whether it is launching a new product, entering a new market or simply hiring a new member of staff.

Before making any big decision, it is important to weigh up the potential benefits and risks, comparing them carefully. With very big decisions, it is worth taking the time to take a step back: to stop, look at the situation calmly from a distance, and think. A measured decision, based on careful thought, is almost always better than a rash one based on emotion.

If you are sure that the benefits outweigh the risks – in other words, that they are greater – you are ready to take the leap and commit to the decision, even though the outcome is not certain. A well-judged risk is likely to pay off and bring real rewards. But a rash decision can backfire, producing the opposite of what you wanted, and it may even jeopardise the company’s finances, its reputation or its very survival.

Of course, we don’t always have time for a full analysis. Sometimes we simply have to gauge the level of risk – to make a quick, intelligent judgement about how risky something is.

Some people enjoy taking risks. Others are naturally risk-averse: they prefer to avoid risk whenever possible, even if it means missing an opportunity.

BKey words from the text

Based on the context of the text, choose the phrase that matches each definition. Then complete the example sentence. You may need to change the form of the phrase.

To put something in danger of being harmed or lost

“One bad decision could the whole project.”
To decide to do something new or risky, even though the result is uncertain

“After ten years at the bank, she finally and started her own company.”
Preferring to avoid risk whenever possible

“Older investors tend to be more .”
To compare the advantages and disadvantages carefully before you decide

“We need to the risks before we sign the contract.”
To have the opposite effect to the one you wanted

“The aggressive pricing strategy and lost us customers.”
Careful and controlled, based on thought rather than emotion

“The CEO gave a calm, response to the crisis.”
To judge or estimate something, often quickly

“It’s hard to how customers will react to the new prices.”
To bring good results, especially after taking a risk

“Our decision to invest in Asia has really .”
To stop and think about a situation calmly, as if from a distance

“Before we decide, let’s and look at the bigger picture.”
To be greater or more important than something else

“In this case, the benefits clearly the risks.”

CRead: the risk review

Now read the meeting. The phrases in bold are for exercise D.

Reviewing the Nordline acquisition

A company is planning to buy Nordline, a smaller competitor in Norway. Before the board votes, the CFO is reviewing the risks with two colleagues.

JuliaCFOThanks for joining. Before the board votes on the Nordline deal, I want to make sure we’ve covered all bases – that we’ve thought of every possible problem. Tomas, what do you see?

TomasHead of RiskI’d like to flag up three risks. First, we would be heavily exposed to currency risk. Most of Nordline’s revenue is in Norwegian krone, so a weak krone would hit our profits directly.

OwenStrategy DirectorCan we mitigate that? Reduce it in some way?

TomasYes – financial hedging would reduce the impact significantly. Second, integration. I’m wary of the timeline: I’m not convinced we can merge two IT systems in six months. And third, people. If their sales team leaves, the deal loses most of its value.

OwenThen I think we should anticipate that risk now, rather than react to it later – for example, by offering the sales team bonuses to stay before the deal closes.

JuliaGood. And can we justify the risk to shareholders? They’ll want to know why the deal is worth it.

OwenI think so. If we play it safe and do nothing, we’ll lose market share to our bigger competitors. Standing still is a risk too.

JuliaFair point. But let’s not overlook the risk to our own business: a major integration could distract the management team for a whole year.

TomasAgreed. I’ll put all of this into the risk report for Thursday.

DKey words from the meeting

Based on the meeting, choose the phrase that matches each definition. Then complete the example sentence. You may need to change the form of the phrase.

To reduce how harmful or serious something is

“Insurance can help to the financial risk.”
To avoid risks by choosing the safest option

“In uncertain times, many companies prefer to .”
To point out a problem so that other people notice it

“I’d like to a potential issue with the contract.”
To fail to notice or consider a risk

“In their excitement, they the risks of expanding so quickly.”
To deal with every possible situation or problem

“We’ve prepared three backup plans to .”
In a position where you could be harmed or lose money

“Companies that rely on one supplier are highly .”
To give good reasons why a risk is worth taking

“The potential returns are high enough to .”
Careful, because you think something could be dangerous or cause problems

“Investors are companies with very high debts.”
To expect a risk and prepare for it before it happens

“Good planning means risks before they become problems.”

ESay it better

Each sentence below is correct, but it sounds simple. Rewrite it using a phrase from this lesson, then compare your version with the model answer.

“Let’s think about the good and bad points of this plan.”

Use: weigh up

Show model answer
“Let’s weigh up the risks and benefits of this plan.”
“We need to make the risk smaller.”

Use: mitigate

Show model answer
“We need to mitigate the risk.”
“I want to mention a possible problem.”

Use: flag up

Show model answer
“I’d like to flag up a potential problem.”
“Our CEO doesn’t like taking risks.”

Use: risk-averse

Show model answer
“Our CEO is quite risk-averse.”
“This could put the whole project in danger.”

Use: jeopardise

Show model answer
“This could jeopardise the whole project.”
“In the end, the risk was worth it.”

Use: pay off

Show model answer
“In the end, the risk really paid off.”

FKey words in a new context

A career coach is answering a reader’s question. Complete the reply with the phrases from the box. You may need to change the form of some of the words.

Word box

weigh up
outweigh
take the leap
risk-averse
mitigate
wary of
jeopardise
backfire
cover all bases
play it safe
measured
pay off

Ask the coach“I’m a senior manager at a large bank, but I’ve always dreamed of starting my own consultancy. My family thinks it’s too risky. What should I do?” – Martin, Vienna

Dear Martin,

First of all, take your time. Big career decisions should never be made in a hurry. When you are ready, your options honestly: write down everything you could gain and everything you could lose. If the benefits clearly the risks, it may be time to .

Your family’s concerns are understandable. Many people are naturally , and leaving a secure job at a bank can feel dangerous. But there are ways to the risk: you could start the consultancy part-time, or save enough money to live on for a year.

Be moving too fast. If you resign before you have any clients, you could your family’s financial security, and a decision made in a rush can easily .

Try to before you resign: talk to potential clients, check your contract for any restrictions, and get advice from an accountant.

Of course, you could also and stay where you are. But if you prepare carefully and make a decision, there is a good chance that it will .

Good luck,
Anna