Diversification
/ˌdaɪvərsɪfɪˈkeɪʃən/
Definitions
- (n.) The strategy of spreading investments or business activities across different markets or products to reduce risk.
The company's diversification into renewable energy helped mitigate financial risk.
- (n.) In corporate law, the process by which a corporation expands its operations into new industries or sectors to avoid reliance on a single market.
Diversification allowed the firm to increase its shareholder value by entering multiple industries.
Forms
- diversification
Related terms
See also
Commentary
Diversification is often central in risk management policies and corporate governance to ensure compliance with fiduciary duties related to prudent investment and business decisions.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.