Risk Management

In the book “Great by Choice”, Jim Collins and Morten T. Hansen outline death line risk, asymmetric risk, and uncontrollable risk. They say that “you want to be cognizant of lurking dangers and vigilant about possible disruptions.” pg.13. Risk management is often talked about however it is talked mostly as enterprise risk management to describe the overall measures a company has taken to reduce risk exposure. Yet as a compliance advocate and outsourced general counsel – and, in the opinion of many an attorney working in-house – the dangers that lurk within companies are also related to the legal aspects of the business. So, risk management attempts to reduce legal risk exposure of the company because law governs many areas of a business. For example, in a family owned business when shareholders don’t get along action may ensue. Or, an employee gets hurt operating a machine, besides workers compensation issues, a company may have to deal with a product liability lawsuit; a particular regulation is violated a government investigation could begin with all its bells and whistles and other consequences, if a business survives, if possible, the turmoil. Legal risk is found in many areas. Large businesses are diligent about managing it. Small and midsize businesses overlook it or consider it something not to be bothered with because it’s a cost, until they may face a crisis that could have been avoided. No intention to preach, rather an effort to draw attention to get in the habit of assessing risk and begin a program to mitigate legal risk for it will help protect the success and continuance of your company.

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