Tomorrow's Global Business
By Paul Hastings Professional
Boards are facing new risks with increasing frequency and with swift implications for their companies, shareholders, executives, and themselves, particularly given the prevalence of activist shareholders.
Given this environment, boards are on the hot seat to assure that management has implemented an effective compliance program and detective controls that permit management (and the board) to assess and rank those risks of most threat to the business. It is advisable for companies to take a comprehensive approach to risk identification, assessment, and mitigation. By considering such issues as product lines, geographic coverage, industry sector, and applicable regulatory environment, they are able to flag those risk areas of most concern, which typically range from cybersecurity, fraud, competition, bribery/corruption, money laundering, and export controls/sanctions, to intellectual property, labor/workforce issues, and whistleblowers, to name just a few. By assessing the company’s existing compliance program and function, as well as its existing controls systems, they are able to better leverage those systems and assure that they are operating effectively and efficiently.