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. |