production process, for instance: changes
in prices of semi-manufactured products
or materials, availability of personnel,
bad suppliers, weather, theft or fire, and
availability and reliability of information
technology. Many of these risks can be
covered by concluding good contracts
with personnel and suppliers. These
contracts must contain provisions on
retention of title, warranties, pledge and
mortgage, joint and several liability,
compensation for default, etc. An
important tool in risk management is the
use of General Terms & Conditions, so
that your liability will be limited in each
contract.
finances, including debtors, while taking
account of exchange rates, interest rate,
liquidity and solvency. This type of risk
will generally be discussed with and
covered by an accountant, but it's also
closely connected to General Terms &
Conditions and the contracts a business
concludes. Clear contracts with debtors
can simplify collection and thus increase
the liquidity of a company.
organizations, such as consultancy
and information and communications
technology, face this risk. It is very
important to control sources of
information effectively, to protect
knowledge, and to limit the risk of
key staff leaving. Patents, trademark
protection, and confidentiality and
non-compete clauses in employment
contracts are important tools for
retaining and protecting knowledge in
your organization.
according to the effective legislation. This
applies to all business departments. Thus,
compliance is not just a field reserved
to the legal department, but it is also
important for the purchasing and sales
department, human resources, accounts
department and the manufacturing
department. Does your accounting
department comply with the regulations
on administration and annual reports?
Are the terms of employment correct? Are
you dealing with consumer complaints
the right way? Do you have all the
permits required? Are your products and
the manufacturing process in line with
the safety requirements? It is therefore
important to check (or have checked)
the management in all departments for
the aforementioned risks. Ultimately,
prosecution of the management.
Internationally operating businesses
will be confronted with the fact that
regulations on compliance may differ
from country to country. In Europe
there are, for instance, far-reaching
regulations on the protection of data
of employees, customers and citizens
in general. In other parts of the world,
privacy regulations are less important.
If your business sells goods to European
customers directly through an online
store, the complaint handlings system
containing customer data has to comply
with these regulations on data protection.
Your Risk Manager
by consulting an outside corporate
counsel. Just as you readily take out
insurance and pay a small monthly fee to
prevent financial disasters, so should you
consult your outside corporate counsel
on a regular basis at a low cost. This
approach is cheaper and less stressful
than unwanted expensive litigation. After
all, your outside corporate counsel knows
your business and your market well and
can quickly provide you with sound
legal advice, so that you will be aware
of potential risks in time and deal with
them, if desired.