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Improving the Treasurer’s Critical Risk Management Role

Over the years, the role of the treasurer has evolved from a mainly operational function to something more strategic that involves board-level accountability and the responsibility to help manage enterprise-wide risks. At its most basic, the treasurer must safeguard the assets of a company and manage liquidity to support the operations of the company’s principal business. This task is complicated by the minute-to-minute fluctuations in the financial markets and was never more challenging than during the recent financial crisis. In an online exclusive article for Risk Management, Andrew Woods of SunGard suggests that these circumstances demonstrate the need for treasurers to utilize the latest technology and risk management best practices in order to get a better picture of their organization’s risk profile.

Effective use of technology is the only way a treasurer who manages global exposures can consolidate and analyze information quickly and accurately. Automating the exposure management process eliminates errors, creating opportunities for optimal cost savings and risk reduction. By interacting with enterprise resource planning (ERP) and accounting systems and other exposure data sources, treasurers and risk managers are able to accurately identify, quantify and manage exposures based on complete data, with minimal dependence on IT or finance.

To read the full article, be sure to visit RMmagazine.com.

December Issue of Risk Management Now Online

Faithful readers: the December issue of Risk Management magazine is now online here. Following tradition, we devote the December issue to recapping the Year in Risk. From the Haiti earthquake to flooding in Pakistan to the Greek debt crisis to numerous legal settlements, we cover more than 50 risk management-related issues that occurred in 2010 while offering an in-depth look at the Gulf oil spill, the Toyota recall and the Chilean mine disaster.

Our columns explore topics such as the lack of progress in fighting malaria, legal lessons from the Great Fire of 1906 and the increase in accidents since bans on texting while driving. Also included are monthly staples such as our articles highlighting recent industry reports (Findings) and our book reviews (Shelf Life).

If you enjoy what you seen online, you can subscribe to the print edition to enjoy even more content.

Please let us know what you think in the comments below. And stay tuned to the blog for even more coverage in the future. Lastly, you can follow the magazine on Twitter“like” us on Facebook and join our LinkedIn group.

Child Labor: A Reputation Armageddon

For the most part, a company never anticipates its suppliers will be using child labor to provide a product, but for many large corporations with production facilities or suppliers in poorer countries, that is exactly what is, and has been, happening. And the reputation damage inflicted by accusations that a company uses child labor to make a profit, even if unaware, is devastating.

You may remember back in 2007 when Gap came under fire for, apparently unknowingly, using child labor in the production of a line of children’s clothing in India. An investigative reporter videotaped the scene at the factory.

It shows children who appeared to be between the ages of 10 and 13, stitching embroidered shirts in a crowded, dimly lit work-room. The video clearly shows a Gap label on the back of each garment. The reporter, Dan McDougall, said the children were working without pay as virtual slaves in filthy conditions, with a single, backed-up latrine and bowls of rice covered with flies. They slept on the roof, he said.

Though Gap immediately ordered a full evaluation and had a clean record of ethical out-sourcing up until that point, the reputation damage was severe and lingers to this day.

But Gap is not the only company accused of using child labor. In 1998 Nike agreed to root out underage workers and require overseas suppliers to meet strict Unites States health and safety standards after it received heavy pressure from critics.

Nike said it would raise the minimum age for hiring new workers at shoe factories to 18 and the minimum for new workers at other plants to 16, in countries where it is common for 14-year-olds to hold such jobs. It will not require the dismissal of underage workers already in place.

Though the shoe and apparel giant took some steps to ease the concerns of critics, the company suffered boycotts by consumers who refused to support such “sweatshops.” Examples include this boycott petition and this website encouraging the end of support for anything Nike.

More recently, Apple “said it found more than a dozen serious violations of labor laws at its suppliers.” One investigation found that three overseas facilities had hired 11 workers who were 15 years old (the minimum employment age is 16 in those countries). Apple’s reputation damage continued to worsen this year with news of an alarming rate of suicides at its biggest supplier, China’s Foxconn (check out an in-depth article on the topic).

China, India, Bangladesh, Nigeria and Pakistan are among the countries with the most widespread abuses of child workers, according to a report released today by Maplecroft. Below is a map illustrating the ares most prone to use of child labor.

Screen shot 2010-12-01 at 11.24.01 AMAs the report states, there are more than 200 million children working throughout the world, many full-time. Of these, 126 million are exposed to hazardous forms of child labor. As we have seen, many big-name companies have been accused of using child labor, and though they’ve taken many steps to correct their ethical violations, the reputation damage still lingers — and may do so forever.

November Issue of Risk Management Now Online

It’s that time again — a new issue of Risk Management magazine is now online. The cover story in our November issue celebrates the 100th anniversary of the modern U.S. workers compensation system and highlights the fact that even though workers comp is only 100 years old, its principles date back a millennium.

Additional features in the newest issue are a first-hand account by Michael Cawley of 25 lessons learned during his 25 years as a risk manager, the pros and cons of cloud computing and seven steps to building a successful workers comp program.

Our columns explore topics such as the rise in workplace suicides, the largest data breach in history, regulatory uncertainty within the insurance industry, the Red Flags Rule, and human clinical trial insurance in South Korea. Also included are monthly staples such as our articles highlighting recent industry reports (Findings) and our book reviews (Shelf Life).

If you enjoy what you seen online, you can subscribe to the print edition to enjoy even more content.

Please let us know what you think in the comments below. And stay tuned to the blog for even more coverage in the future. Lastly, you can follow the magazine on Twitter“like” us on Facebook and join our LinkedIn group.