Author Archives: Jared Wade

About Jared Wade

Jared Wade is a freelance writer and former editor of the Risk Management Monitor and senior editor of Risk Management magazine. You can find more of his writing at JaredWade.com.
Игроки всегда ценят удобный и стабильный доступ к играм. Для этого идеально подходит зеркало Вавады, которое позволяет обходить любые ограничения, обеспечивая доступ ко всем бонусам и слотам.

Most Companies Do Not Expect – And Remain Unprepared For – Lawsuits Against Their Directors

Posted on by

Seeing a chasm between risk perception and risk reality has ceased to surprise me. Virtually every survey, study and report I come across reveals that executives either (a.) don’t understand the risks they take or (b.) understand the risks they take but just opt not to do anything about them.

Well, here is another surprisingly-not-surprising revelation: 80% of public companies think it is unlikely that their directors and officers will be sued. This is despite the fact that, according to the latest “Chubb Public Company Risk Survey,” 23% of companies have already been sued, and the rising risks of more lawsuits in the future due to rising mergers-and-acquisition activity and increasing enforcement actions related to the Foreign Corrupt Practices Act (FCPA).

Let’s look at the latter part first: FCPA.

The Walmart bribery scandal in Mexico has brought this once-dormant law into mainstream focus, but it is the Justice Department’s behavior in recent years that highlights the growing risk for companies. In 2010, DOJ imposed $1.7 billion in fines on companies for FCPA violations/settlements. By contrast, that number was just $2.7 million in 2002.

As a multinational company, you can’t look at these numbers and see anything but a federal priority to stamp out illicit corporate behavior overseas. And that means more risk of fines, lawsuits and settlements that could be even more damaging to a reputation as they are to a bottom line. Insurance may protect against some of this, but not all.

“An FCPA investigation can cost a company millions of dollars, and violators have faced enormous fines,” said Evan Rosenberg, senior vice president and global specialty lines manager for Chubb. “D&O policies can cover directors’ and officers’ defense costs for an alleged FCPA violation and fines for non-willful violations of the act.” (For more on that, here is a good breakdown of all the FCPA insurance issues companies should be aware of.)

Regardless, more than two-thirds of survey respondents (78%) are not worried about an investigation due to an FCPA violation, and 13% have decreased the financial and human resources they devote towards mitigating FCPA-related losses.

The mergers and acquisitions risk is also foolish not to consider.

But … and stop me if you’ve heard this one before … most companies are acting foolishly.

A full 64% of the survey respondents have been involved in a merger, acquisition or restructuring over the past two years. Yet, more than one-quarter of companies (26%) do not have documented merger and acquisition protocols and have no plans to develop them in the next 12 months.

“While M&A-related lawsuits may be covered by the company’s directors and officers liability policy, documented protocols may help improve the company’s defense in court or result in a lower settlement amount,” said Rosenberg.

Emerging Risks: There Are More Than Ever, Everybody Knows This but Few Do Anything About Them

Posted on by

CFO just published an excellent article on emerging risks. It starts off talking about the day-to-day work of a CFO, Kevin Gordon, who says risk management is on his mind “every minute of the day.” It goes on to discuss the risk assessment work he did last year about how the European debt crisis could potentially harm his employer.

Most people, however, aren’t like Kevin Gordon.

Most people recognize that emerging risks, like Eurozone default, are out there.

Then they do nothing more.

The article explains.

By their nature, emerging risks are difficult to anticipate.

“An emerging risk is either something we’ve never seen before or something we haven’t seen for a long time,” says Max Rudolph, owner of Rudolph Financial Consulting.

They can do extensive damage. The European debt crisis, the Japanese earthquake and tsunami, the Arab Spring uprisings — these once-emerging risks all had a ripple effect in 2011 on supply chains, commodity costs, and liquidity.

Experts say such risks are growing. “The interconnected nature of the global economy is increasing the speed at which emerging risks arise and cascade, as well as the magnitude of their impact,” says Alex Wittenberg, partner and head of global risk at management consultancy Oliver Wyman Group.

A new report from Oliver Wyman suggests that executives understand the threat. Seventy-eight percent of more than 200 executives surveyed in the report said they want to increase their capabilities when it comes to managing emerging risks. As it stands, the same executives said they devote just 28% of their risk-management efforts, on average, to emerging risks.

I recommend reading the rest of the piece. As for suggestions on how executives can better prepare, the author suggests keeping “close tabs on market trends, global economic developments, and regulatory activities, and be prepared to jump into action quickly.”

Wildfire Risk in the United States Will Rise Throughout the Next Century

Posted on by

Scientists from the University of California at Berkeley, and Texas Tech University expect more wildfires throughout North America and Europe by the end of the century as temperatures continue to rise across the globe. In summing up the results of their new study, which was conducted by using 16 different climate models (something they called “one of the most comprehensive projections to date of how climate change might affect global fire patterns”), one of the researchers was not necessarily surprised by the fact the threat is increasing. But he was surprised by how quickly it is increasing.

“In the long run, we found what most fear: increasing fire activity across large parts of the planet,” said study lead author Max Moritz.

buy periactin online familyvoicesal.org/resources/images/jpg/periactin.html no prescription pharmacy

“But the speed and extent to which some of these changes may happen is surprising.
buy premarin online https://galenapharm.com/pharmacy/premarin.html no prescription

”

This obviously means that regions that cities, states and nations that are already struggling to control the wildfires of today (for example, Fort Collins, Colorado, USA) need to figure out new ways to adapt to an even-riskier future. “We need to learn how to coexist with fire,” said Moritz.

And as with seemingly everything regarding climate change, it seems that the world’s poorest, most-vulnerable region’s will have the hardest time adapting.

buy advair online familyvoicesal.org/resources/images/jpg/advair.html no prescription pharmacy

 “In Southeast Asia alone, there are millions of people that depend on forested ecosystems for their livelihoods,” said study co-author David Ganz.

buy spiriva online familyvoicesal.org/resources/images/jpg/spiriva.html no prescription pharmacy

“Knowing how climate and fire interact are important factors that one needs to consider when managing landscapes to maintain these ecosystem goods and services.”

There is some good news, however. Equatorial regions may actually see fewer wildfires. This is due to projected increases in rainfall in those regions as the climate changes.

Other scientists who contributed to support the study include the Natural Sciences and Engineering Research Council of Canada, the U.S. Forest Service, the National Science Foundation and The Nature Conservancy.