It’s important that businesses have implemented risk management strategies, to protect the business’ assets. This could include:
- Awareness of the requirements of the Personal Property Securities Act and the need for various entries to be made on the Personal Property Securities Register, to protect the business’ assets.
- Succession planning is very important in every business, not just relating to a general manager or CEO but for directors, members of the senior management team, other management personnel and individual staff members, who have been trained to take someone’s place, is an important management consideration.
- Preparing and reviewing duties’ lists for every position within the business, ensuring the lists of duties are current so, if the team member is absent, someone else should be able to fill in for him/her.
- There should be regular meetings of each team within the organisation and the leaders of those teams should have management meetings. Meetings should always have an agenda, a chairperson and a minute recorder, with an action list being prepared out of each meeting.
- Insurance covers:
– Are they adequate for the assets that are owned by the business?
– What about particular events such as loss of profit insurance? Has the quantum of cover been reviewed? What about the review of some of the other key components of that policy (eg re-
instatement periods, fixed cost being covered, etc)?
– Key personnel insurance
– Buy-sell agreements based on shareholding agreements
- Understanding the potential exposure from a contract or a proposed contract. Has the management team and the Board of Directors had a good look at the consequences and the risks for the business in not fulfilling a contract?
- Debtors’ exposure – what is the debtors’ days outstanding for the business. Are amounts owed by debtors fully recoverable within a reasonable period of time? Is there risk of business failure by businesses owing money to your organisation that could cause immense problems within your organisation?