| Today, we see a number of risks
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| | extremely costly mistake, sometimes
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| associated with businesses of all sizes,
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| | upwards of $10,000 or more. In this
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| ranging from identity theft,
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| | instance, there would be a number of
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| embezzlement, natural disasters, personal
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| | things to consider. Is the individual
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| injury, fraud, vendor failure, taxes,
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| | heading up the tax department qualified?
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| finances, and more. Because of the
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| | What type of tracking system is being
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| increasing number and type of business
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| | used? Is the department short-handed? Is
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| risks, companies have had to make some
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| | the person in the mailroom delivering
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| major adjustments in overall operations,
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| | mail on time? These and other
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| management, and strategy. When you couple
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| | possibilities exist, which is where a
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| risks with competition, you can see that
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| | risk management team would help. Once the
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| it is imperative every company have a
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| | problem area or potential risk is
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| solid plan in place for protection and
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| | isolated, then changes could be made
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| success.
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| | accordingly.
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| One of the most important aspects of
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| | Another factor that unfortunately, is
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| strategy is ensuring a solid risk
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| | sometimes overlooked is the client.
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| management team is in place. These
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| | Obviously, if you are going to run a
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| individuals would hold the responsibility
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| | profitable business, you need satisfied
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| of not just identifying potential risk
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| | customers. Perhaps there are areas of
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| but also creating and implementing sound
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| | service or product where customers are
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| processes, techniques, or technologies
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| | not happy but because no means of
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| for prevention and/or correction. The
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| | communication or input is in place, you
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| risk management team however will not
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| | have no idea. Therefore, you might think
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| work in isolation but in tandem with
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| | about sending out customer surveys,
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| other key stakeholders, such as
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| | trying to find any weaknesses that need
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| department heads and the Executive team.
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| | to be strengthened. It is imperative that
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| Having a winning risk strategy is going
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| | you know your customers and that those
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| to give your business the foundation on
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| | customers are so satisfied with what you
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| which to build a strong, competitive
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| | offer so they will not look elsewhere.
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| company but also a business that
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| | Things happen in businesses and sadly,
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| employees and clients trust.
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| | many great companies have gone under
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| What is the key to creating such a risk
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| | because of lack of risk management and/or
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| strategy? For one thing, you want to be
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| | strategy. Enron, is only one of many
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| productive but not make quick decisions.
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| | examples in which a failure to manage
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| Unfortunately, we have seen many larger
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| | risk or even identify risk ruined a
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| corporations that have put "quick fixes"
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| | company. Another often cited example is
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| into place, only to find they end up with
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| | Barings Bank which was one of the most
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| a laundry list of new problems. Yes, it
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| | respected merchant banks in the United
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| is essential that a good plan be
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| | Kingdom. The company which held $900
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| developed as quickly as possible but make
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| | million in capital was bankrupted due the
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| sure the plans being considered are not
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| | actions of one trader. The losses and
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| just short term fixes but will be
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| | subsequent bankruptcy could have been
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| beneficial long-term. While a risk
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| | avoided if internal controls had been in
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| management team can identify potential
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| | place. There are countless other global
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| risk events, the team must work in
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| | examples of the consequences of not
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| conjunction with the organization so that
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| | identifying risk events.
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| strategies are aligned with the business
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| | While federal regulations such as
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| goals. In essence, the best risk strategy
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| | Sarbanes-Oxley have mandated corporate
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| is one component of the overall business
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| | governance and controls, managing risk is
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| strategy.
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| | simply good business. Identifying risk
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| In addition, you need to review your
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| | events and formulating response
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| company inside and out, top to bottom, to
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| | strategies enable the organization to
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| determine where risks lie. For example,
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| | successfully execute its objectives.
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| missing payment on taxes can be an
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