Marsh Inc.'s William Failor discusses the changing risks businesses face.
..."It (unawareness of potential risks) can be really damaging to a company," says William Failor, executive director of Marsh Inc.'s Columbus office. He
says one of the most damaging situations arises when a company doesn't have enough coverage or is uninsured against certain risks.
Companies conducting business outside the United States must consider the risks of doing business overseas and how to manage them, says Failor
.For example, if your company purchases a factory in France and wants to cut costs by reducing or eliminating employee benefits, you could run into trouble.
"In France, you have to have the agreement of the employees to reduce benefits," says Failor
Risk management consultants such as Marsh
can reduce these risks because they have local offices around the world, and the employees who staff them are versed in the local employment laws and risks.
"If you think you can apply American business philosophies, you could be in error," Failor
There are no limits to who might sue your company, says Failor
.It's not just shareholders who can instigate a lawsuit; in today's post-Enron environment, employees, customers or vendors could get involved in a class action suit against a company's directors and officers if they feel they misrepresented the company's financial picture. Failor
says that although directors and officers insurance premiums have risen substantially in the past five years, it is still a good investment.