Be Proactive To Mitigate Risk

Risk Management Must Always Be Proactive

For Risk Mitigation It’s Time to Plan for Next Year

The end of the year is almost upon us.  That means of course it is time to plan for next year.  What risk management processes should be implemented or updated?   What updates to the compliance program should be made in light of DOJ announcements?  What should be done to better protect the company and mitigate risk?   Though there are numerous items to consider here are some to think about doing if you have not done them especially if you are a manufacturing company or a subsidiary of a manufacturing company.  Remember, risk management must always be proactive if it wants to mitigate risk.

1. Maybe it’s time to establish a task force to think about updating compliance guidelines.  After all if the DOJ or regulatory authorities change positions on antitrust investigations, compliance guidelines should be modified to reflect the changes.  Has anyone checked with outside counsel about this?

2. What about class actions?  If class actions are a concern to management maybe it’s time to:

• Implement loss control procedures
• Start reviewing all advertisements
• Implement a product risk management committee
• Look at your warranties
• Check on claims process of the Service Department

3. Think about product loss control procedures including:

• Establishment of a claims committee
• Require R&D to conduct formal hazard evaluations on all new products
• Establish standards for packaging and shipping procedures
• Establish a claims processing procedure

4. Develop a checklist covering product management considerations including:

• Written procedures for the product design program
• Establishment of a product design review committee
• Establish procedures for testing prototypes
• Establish procedures for the post-sale monitoring of labeling
• Review all published statements about your products
• Address the quality of equipment you use in manufacturing

5. Think about Service

• Has Service Responded to user complaints
• Has Service investigated all service related complaints
• Is there new information about the proper use or risk of using your products
• Are there written processes on dealing with product issues

6. Product Manuals

• Do product manuals contain proper information such as

1. The date of publication
2. Disclaimers of express and implied warranties
3. Proper warnings
4. The consequences that result from following the warnings
5. Proper description of the product

7. Insurance

• Conduct a risk assessment to create a business profile to help maximize your insurance portfolio.  Think about  issues  such as:

1. Stabilizing insurance costs
2. Mitigating extraordinary  financial impact
3. Leveraging risk bearing capital
4. Optimizing tax and accounting issues
5. Conducting an analysis of current coverage amounts, deductibles and excess

The above reflect some ideas on how to approach risk management concerns for 2015.  Obviously, your company may have implemented some or all of them.  If so- have they been reviewed and updated?  There is always room for improvement and room for risk mitigation.  Be proactive!