The 4 Steps in Risk Management:
1.1. Risk Assessment (Information)- Risk assessment is the process of identification and evaluation of exposures that threaten a company’s assets and profitability. Combining legal and technical knowledge with common sense promotes good risk assessment.
1.2. Loss Control (Action)- Process of reducing the frequency and severity of losses through preventative measures
1.3. Risk Transferring (Action)- This is the process of shifting the financial burdens of losses outside the responsibility of the organization. The purpose of this action is to take a specific risk, which is detailed in the insurance contract, and pass it from ...view middle of the document...
A common example is a parking lot ticket stub that states that the parking lot owner is not responsible for theft or damage to the vehicle.
3. Incorporate a Risk Management Team
The most important member of a RM Team is the Risk Manager. The Risk Manager is an overseer of the RM Process and helps enact indemnity and exculpatory clauses. It would be in a business’s favor to hire an attorney to make sure all indemnity and exculpatory clauses are rational in all circumstances. An Ethics Officer is needed to make sure all clauses are carried out fairly and ethically with the best interests of the organization and its stakeholders in mind. A Human Resources manager is also needed to handle all problems with internal employees such as compensation, proper hiring/firing, and training.
4. Open an Ethic’s Office
An Ethic’s Office is put in place to service all internal ethical matters that pose potential threats to the organization. An ethics office provides a safe, confidential place for employees to express their concerns about potential threats. It is also a place that welcomes whistle-blowers to express any concerns without revealing their identities. This is important because it allows the corporation/ business to
Alternative Dispute Resolution
A neutral third party acts as a mediator between two parties in search of a resolution that equally satisfies both parties. The neutral third party member can be an attorney, or someone with extensive knowledge in the area of conflict. The mediator may make a decision, but it is nonbinding unless mandated by a judge, or otherwise stated in a formal contract. Some businesses love mediation because it brings a third-party to the settlement process, who can provide a disinterested reality check for both sides. If a settlement can be reached, both parties can save a significant amount of time and money.
Bryant Jones, 4:00 ,#9