Tag Archives: financial risk

Для тех, кто интересуется безопасным доступом к онлайн-играм, наш партнер предлагает зеркало Вавады, которое позволяет обходить любые блокировки и сохранять доступ ко всем функциям казино.

Supply Chain Stability and COVID-19 Vaccine Delivery

Posted on by

As COVID-19 vaccines are rolled out around the world, effective risk management coupled with predictive analytics can help ensure supply chain stability to quickly and safely deliver them. Pharmaceutical companies and stakeholders around the world are scaling their vaccine roll-out, and concerns are emerging around logistical challenges of how to manage quick global distribution. One thing is clear: the entire supply chain’s stability needs to be monitored carefully, as a single fracture can have catastrophic effects on distribution of this time-sensitive vaccine.

Pfizer has designed an innovative logistical method to control vaccine distribution from manufacturing to local cold-storage facility. Much has been written about vaccine producers’ heroic efforts to secure upstream components such as glass vials, stoppers, and crucial vaccine ingredients, as well as the distribution packaging, including dry ice capacity, specially manufactured cold-boxes for vials, airfreight logistics and more. But very little has been reported on the downstream, or on-the-ground distribution of the vaccines around the world. As the vaccine touches down in states across the United States and countries around the world, the real distribution challenges begin.

As in every industry, risk originates in many places along the supply chain. Geopolitical risk, fraud, and third-party financial risk all must be understood if the vaccine is to reach the greatest number of people in the shortest amount of time. While some believe responsibility for distribution lies solely with individual localities, they are forgetting that the entire supply chain and logistics industry has a moral imperative to ensure that the vaccine is properly and fairly distributed.

Even with the best planning, plenty can go wrong, including:

Geopolitical Risk: If history has taught us anything, it is that some in power will manipulate the distribution of life-saving relief to their political advantage. Examples include the United Kingdom’s blockades of food to Ireland and India, Sierra Leone military juntas interfering with United Nations food relief, and Somali intelligence officers kidnapping the World Food Program’s local chief, among others. Closer to home, President Donald Trump tried to manipulate the distribution of PPE away from states that did not support his politics. Once life-saving vaccines arrive in local facilities, it will be a monumental task to distribute them fairly, and in a manner that does not give more power to local officials who seek to use them to further entrench corruption.

Financial Risk: Many organizations can stumble while rolling out distribution programs. Without proper chains of custody, fast financing, and quick due-diligence on third-party logistics suppliers, even the most well-oiled machines could fail to deliver the vaccine in a successful manner. The scale of vaccine demand is massive. Shortages are already present for raw inputs, and for critical infrastructure components. To meet these unique challenges, access to fair financing and payments should be guaranteed to all participants in the supply chain (i.e. no 90-day contracts for truck drivers who are moving the vaccines.)

Geolocation: Risks like natural and manmade disasters, lack of last-mile distribution, and poor infrastructure can all cause a single point of failure. The technology exists to ensure that vaccines are sent to the most geographically ideal local distribution hubs, and predictive forecasting should be employed to ensure the most timely deliveries.

Since risk can originate anywhere along the supply chain, everyone involved in the logistical aspect of vaccine storage and distribution needs to assess the existing systems to calculate and correlate risk. Leveraging technology is the best way to gain visibility. Rather than rely on gut instincts to determine supplier and partner risk, those in charge should use data to make decisions and consider implementing automated intelligence technology to actively predict and correlate how a change in geopolitical risk will affect the financial health of suppliers. Proactive planning is not only crucial for continuing rollout of vaccines for the current pandemic, it is also paramount in being prepared for the next pandemic.

Spending Risks Shift as the Pandemic Continues

Posted on by

When Twitter offered permanent work-from-home status to all of its 4,600 employees in response to the COVID-19 pandemic, it did so with a $1,000 stipend per employee to furnish and set up functional home office spaces.

For many organizations, such a sweeping move would carry higher risk as more employees, especially those not trained in company spending policy, would be expensing items. During COVID-19, enterprises of all sizes contend with the changing financial implications of adjusting business practices.

Data scientists at Oversight—a global leader in spending management technology—saw out-of-pocket spending increase 17% from April to May and expected this number to rise further in June as more employees without a corporate card make COVID-related expenses. These findings are published in the company’s Spend Insights Report, which analyzed information derived from customer interviews, market observations and Oversight data.  

Several Oversight clients reported finding big-screen TVs and soundbars on expense reports for work-from-home setups. Any of these could ultimately be for personal use or resold for personal gain. One client found that one of its employees spent $7,000 in corporate funds to set up a new home office space.

The months since COVID-19 forced employers everywhere to pivot their office strategies and open expensing capabilities to a broader subset of the employee base. As a result, the fundamental assumptions about spending and risk management in finance operations no longer apply.

New patterns of risk are emerging from these new transactions. However, finance operations teams that take the time to analyze these patterns can develop best practices.

Five key lessons enterprises should understand about spending risk in the 2020 business environment are:

1. Good and Bad Spending Have Reversed Roles

When the rapid shutdown of normal business operations forced the global workforce to shelter in place, travel discontinued abruptly. Airline and transportation activity plummeted in both March and April, as did hotel spending. But purchasing activity was higher than expected in the high-risk categories of mail/phone orders and miscellaneous stores (including merchants such as Amazon, Best Buy and Apple), while out-of-pocket expenditures in the name of business continuity increased dramatically. The result was a business scenario in which much of the historically “good” spending, like travel expenses, was suddenly deemed wasteful to the organization. In contrast, much of the traditionally categorized “bad spending” was now necessary.

2. The Pattern of Risk is Shifting, As is Mitigation Collaboration

Because the risk looks significantly different than it did before the pandemic, finance operations teams are applying more scrutiny to employee spending, and collaborating more. Operations teams are engaging more than ever with counterparts in forecasting, tax and audit to navigate the nuances of risk during the crisis, creating a new best practice that makes identifying and mitigating spending risk easier.

3. Rising Miscellaneous and Out-of-Pocket Costs Cause Payment Platform Risk

Third-party payments increased 40% year-over-year in April according to the Spend Insights Report, as the pandemic drove a significant increase in online shopping activity. That shift to online—as reflected in rising miscellaneous and out-of-pocket spending—was often processed using third-party payment platforms like PayPal and Stripe. When employees spend using these platforms, organizations are exposed to greater risk due to limited visibility into transaction and vendor data.

4. New People Spending is New Risk

Regardless of COVID-19’s impact on an organization, one good rule is that risk is a function of people. According to Oversight data, 70% of employees are good stewards of corporate funds. An additional 25% may make errors or act out-of-policy in certain circumstances, but these individuals are not intentionally involved in waste or fraud. The remaining 5% of employees could use opportunities like COVID-19 to spend maliciously or otherwise act outside of corporate compliance guidelines. Every organization’s goal should be to engender visibility into the 5% of bad actors, while simultaneously seeking to better inform the remaining 25% about the steps they can take to adhere to policy. 

5. Align your Teams and Tools to Ensure Visibility into Spending

By quickly understanding as an organization what employees are spending on today, and at what frequency, leaders will be better suited to manage and mitigate risk. While the profile may be different than before the pandemic, the same tools that guided visibility into spending and risk are available to help organizations understand and analyze spend in the new business climate.

The situation at most organizations is fluid. The essential take-away is to develop a framework and process for near-real-time awareness of employee spending and the associated risks. By recalibrating your sense of the necessary expenditures now, organizations can ultimately ensure continuous control over risks as they emerge.

Reputational Crises Put CEOs at Risk

Posted on by

When reputational crises hit, market cap, sales, margins and profits are all on the line. And these situations are becoming more frequent—and more costly—than ever, with a recent study showing an increase in losses from reputational attacks increasing by more than 400% in the past five years.

But it is not only the corporate entity facing challenges, individuals in leadership—particularly CEOs—face personal risk as well. It has become clear that CEOs need tools to protect themselves as well as their companies’ reputations. Since damage from reputational attacks takes place in the court of public opinion, traditional liability solutions, such as directors and officers coverage, are not effective. But new tools are available in the form of a reputation assurance solution that can help deter attacks from even happening and bundled insurances to mitigate the damage when they do occur.

Research by Steel City Re has found that:

  • Financial losses related to reputational attacks have increased by more than 400% in the past five years, a trend that continues.
  • There is an increase in public anger and, as a result, more blame is being cast upon recognizable targets, such as CEOs.
  • Anger by stakeholders is fueled by disappointment—the gap between expectations and reality—which is all too often fueled by the company’s own actions.

Against that backdrop, the turnover rate among CEOs is increasing, with 58 of the S&P 500’s CEOs transitioning out of their jobs in 2016 according to SpencerStuart (although not all as a result of reputational crises). That is the highest number since 2006, a 13% increase over 2015, and a 57% increase over 2012.

If that weren’t enough reason for concern, history shows that when strong companies and their brands come under fire, their reputations eventually recover, despite the initial and medium-term impacts. Individual reputations of those companies’ leadership are not nearly as resilient, however, especially at a time when society; be it the media, social media, politicians or direct stakeholders; seems intent on personifying crises and affixing blame on individuals in positions of authority. And for CEOs, a reputational crises can affect their career and compensation for many years ahead.

In this environment, it is essential that risk managers understand the tools that are available to protect both companies and senior executives personally. Serving as a third-party warranty and available only to highly qualified insureds, reputation insurance attests to the efficacy of the company’s governance and operational practices, as adopted and overseen by the board and implemented by the CEO. Such coverage can deter reputational attacks in much the same way as a security sign on the front lawn deters burglars. It is a sign of quality governance. And when incidents do occur, it provides a built in alternative narrative to counter the attacks that are bound to occur. Finally, it gives the company and key individuals financial indemnification to mitigate any damage that ultimately does take place.

Just as “doing the right thing” did not protect directors and officers from liability in the era before the wide adoption of D&O insurance, it is no guarantee that attacks in the court of public opinion won’t take a significant financial toll. But it is one of the few solutions proven in the court of public opinion. In today’s culture, reputations are in jeopardy as never before and risk managers must utilize all tools available to protect those on the front lines.

Smaller Companies More Vulnerable to Employee Theft

Posted on by

It stands to reason that larger organizations would be more at risk of embezzlement by employees, but the reverse has been shown to be the case.

buy augmentin online pelmeds.com/wp-content/uploads/2023/10/jpg/augmentin.html no prescription pharmacy

Organizations with fewer than 150 employees are particularly at risk, accounting for 82% of all embezzlement cases, HiscoxHiscox2 found in its new report, Embezzlement Study: A report on White Collar Crime in America. Smaller organizations with tight-knit workforces are particularly vulnerable because of the trust and empowerment given to employees.

Incorporating employee theft cases active in the U.S. federal court system in 2015, the study found that 69% represented companies with less than 500 employees. Perpetrators are often “regular people who are smart, well-liked, and those you’d least expect to steal,” according to Hiscox.

buy rogaine online pelmeds.com/wp-content/uploads/2023/10/jpg/rogaine.html no prescription pharmacy

 How does a trusted employee become a criminal?

buy pepcid online pelmeds.com/wp-content/uploads/2023/10/jpg/pepcid.html no prescription pharmacy

Motivations can range from financial pressure to a belief that they are underpaid by the company.

Employees with more tenure, access and control over finances are found to take the largest amounts. While the type of fraud can vary by industry, what is consistent is access to funds. In fact, managers were found more likely to steal than other employees.

Hiscox3

For the second year in a row, the greatest number of cases, 17%, was in the financial services industry and second was nonprofits at 16%. Labor unions ranked third, followed by real estate/construction. The largest scheme was a $7 million loss in Texas; followed by ones in Connecticut at $9 million, Ohio at $8.7 million and Utah at $4 million.

Hiscox4

Schemes include taking cash or bank deposits, forging checks, fraudulent credit card use, fake invoices and false billing of vendors and payroll fraud.

Companies can protect themselves in a number of ways, including putting checks and balances in place, performing background checks on employees who handle money and teaching employees how to detect fraud, according to Hiscox.

Hiscox5

The study findings also include:

Hiscox