Enterprise Risk Management
Enterprise risk management (ERM) is a vital tool in business and is necessary to mitigate legal issues against a company. In reviewing the bank regulation simulation, one can identify and classify legal torts brought on by the plaintiff. Using proper ERM elements to lessen the business risk associated with each tort violation, managers can reduce damage that can occur from legal allegations. Tort violations, such as negligence, were identified by Kelly Bates. She discussed breach of duty against the Alumina Inc. Other tort risks such as invasion of privacy, bad publicity, and violation of freedom of information act were also identified in the simulation. Each of these torts was mitigated, and the results were favorable for the company. The team used the seven-steps processes of ERM to reduce the risk for the business. These steps involve considering management’s commitment, conducting communications, following policies, and procedures, ensuring proper training is in place, fortifying the framework, ensure risk management is in practice, and an ongoing monitoring of processes.
Considering the risk of bad publicity tort, the management came together on a decision to release a news story highlighting the company’s clean record. They communicated effectively in regard to which action to take. Mr.Todd identified that they have the newest technology in place for pollution clean up. Mr. Lloyd recommends doing a site survey, which demonstrates ensuring risk management is in place and proves that the company’s training is efficient. Documentation provides a clear record of no other events have happened over the past five years. The new site information results identify the company is currently in compliance with the EPA standards.
By using these steps the company’s management has reduced the amount of business risk associated with the tort allegation by Ms. Bates. Further torts such as invasion of privacy, loss of wages suit, legal fees for plaintiff can also have the ERM seven-step process applied to reduce the risks against the company. Information from other