Risk Management Processes- Managing People Risk

October 4, 2016

Screen Shot 2015-07-03 at 11.08.29 PMMaking wrong decisions in the workplace can damage the company’s reputation/brand and cost the company a lot of money. It is a major part of risk and needs to be dealt with seriously. As many companies face an increasing number of employment related claims, clear employment processes are vital.  People risk issues are very important. In fact, legal exposure is now enormous. In fact, in the U.S. a number of large verdicts have been levied against companies that violated U.S. employment law, including:

$190 million – Toyota (sexual harassment)

$50 million – Abercrombie and Fitch (discriminatory hiring practices)

Court-supervised recruiting for 5 years

$2.2 million – International Brotherhood of Police Officers (retaliation)

In the U.S. and elsewhere, there are primarily 5 areas of Law Affecting a manager’s decisions in the workplace. They are:

  • Discrimination
  • Retaliation
  • Sexual Harassment
  • Employee Leave/Reasonable Accommodation
  • Wage and Hour

In other countries, anti-bribery laws also pose great risks to companies.  In Korea, the Kim Young Ran Act not only implements an anti-bribery law that is quite drastic, but it may now be enforced against teachers, quasi-public officials but also companies whose employees have violated the Act.  The Kim Young Ran Act ( the Act on the Prevention of Improper Solicitation and Receipt of Money and Goods)  recently went into effect , and promises to not only penalize various acts of public corruption but also extends the reach of the anti-bribery laws into certain areas of the private sector.   In strengthening various provisions of Korea’s current anti-bribery and corruption laws and regulations, the Kim Young Ran Act (the Act) focused on 4 areas: ( I) the expansion of the acts that may be punished; (2) the expansion of the definition of  “public official” ; (3) the prohibition of improper solicitation without the payment of money; and (4) the introduction of liability provisions to ensure corporate accountability. Now, domestic companies must be concerned about employees violating the Act as well as the risk of  reputational damage.

Does your risk management processes adequately cover employee risk issues? What about anti-bribery laws, both international and domestic? Are you ready for an investigation? It is advisable to take a good look at your risk management processes when considering labor law and personnel issues.

To find out more about employee risk issues in Korea please attend the KBLA’s seminar on October 19- Managing People Risk.  You may find out more about it at the following link:




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