Know Your Company’s Potential Risks
Risks are crises waiting to happen. Sometimes all it takes is a trigger to threaten your organization’s safety, reputation, financial stability or legal status.
Some risks are obvious, although they may be difficult or even impossible to manage, such as natural disasters, economic fluctuations or increased competition. Others are less obvious, but can have a significant impact on reputation and operations. One of these, too often overlooked, is contractor and vendor relationships.
Know Who’s Responsible for Managing Risks
The first thing to consider about contractor and vendor relationships is who within the organization is responsible for managing these risks. Most organizations are busy trying to do more with fewer resources. This can be difficult at any time, but it’s even more difficult in light of the growing number of risks, many of which are posed by situations that didn’t even exist a few years ago. And, because so many of these risks are new, the responsibility for handling them doesn’t fall into neat boxes on a chain of command flow chart.
These new risks can take many forms, including vendor and contractor insurance management, license and certification verification and tracking, document administration and safe contracting programs with background screening and badging.
In reviewing this list of potential risks, it’s clear they affect departments and divisions throughout the organization – finance, accounting, legal, procurement, supply chain and customer service, just to name a few – not just the department that may be designated to oversee risk management and compliance. With all these departments busy with their own agendas, the question everyone in the C-suite should be asking about risk management is “Whose job is it anyway?” With PlusOne® as your partner, your response will be much easier.
Let’s take a look at the primary risk areas your organization may face:
- Reputational risk: This includes risks that can damage an organization’s hard-earned reputation and are often accompanied by loss of shareholder value, marketplace confidence and/or revenue; difficulty in recruiting or retaining excellent employees; negative publicity and even litigation. Given the lack of differentiation in customers’ minds between the contracting organization and vendors/contractors with whom they are contracting, as well as the 24-hour news cycle and prevalence of online communications, the area of reputational risk has become increasingly important. PlusOne’s® Safe Contracting program is particularly effective in helping organizations avoid reputational risk as a result of their contractor and vendor relationships.
- Financial risk: Financial risk can be demonstrated through a loss of sales, settlements resulting from lawsuits or inadequate insurance coverage, competitor incursion and a number of other factors. PlusOne’s Document Administration and Insurance Management programs help avoid financial risk by ensuring the information you have has been verified and is easily accessible.
- Legal risk: In an increasingly litigious society, every organization needs to minimize its legal risk, which may come in the form of lawsuits related to negligent hiring, wrongful injury or wrongful death; discriminatory hiring suits that may also be based on felony arrests or convictions; and violations of FCRA or PIPEDA, among others. PlusOne’s® Safe Contracting and Insurance Documentation programs are particularly useful in minimizing and/or mitigating legal risks.
- Operational Risk: Operational risks exist in the way your organization carries out decisions. Even the best of strategies are subject to failure without proper execution. A risk management strategy that focuses on management decisions and ignores how the staff operates can create a dangerously high risk level.
PlusOne® has a suite of risk management programs to relieve both the contracting organization and its contracted companies of the burden of administering programs and services to reduce these types of risks and avoid exposure to fines, penalties or punitive damages, as well as private settlements.