Enterprise Risk Management and Compliance Chart

Business Risks - Exposures to Liability – Compliance Needs

Below are risks and compliance needs it is essential for any organization to manage.  Below each need is a number.  Below the chart, you will see a general explanation of the management need or risk. If an "X" appears in the cell of the chart where the column intersects with the Performance Management technique, that particular technique is applicable to that risk.  

Performance Management Techniques 

Below are essential Enterprise Risk Management Techniques. 

Profit- Loss
Mgmt.
 (1)

Corporate
Governance
& Compliance For All Stakeholders

(2)

Professional,
 E&O,
 D&O
Liability
(3)

General
Liability
(4)

Quality System
 Mgmt.

(5)

Product Liability
(6)

Employment Practices
Liability
(7)

Workers
Comp &
 OSHA

(8)

Property
Risks
(9)

Benefit

Plans
(10)

A. Lean driven objective job descriptions

X

X

X

X

X

X

X

X

X

X

B. Objective employee
recruiting procedures

X

X

X

X

X

X

X

X

N/A

X

C. Employment background checks

X

X

X

X

X

X

X

X

X

X

D. Objective and documented employment policies, procedures and handbooks

X

X

N/A

N/A

X

N/A

X

X

N/A

X

E. Lean driven documented operational systems, procedures and processes

X

X

X

X

X

X

x

X

X

X

F. Physical plant and facilities documentation and procedures

X

X

N/A

X

X

X

X

X

X

X

G. Business or strategic plan

X

X

X

X

X

X

X

X

X

X

H. Documented emergency and disaster recovery procedures

X

X

X

N/A

X

N/A

N/A

N/A

X

X

I. Work assignments based on skills and experience

X

X

X

N/A

X

X

X

X

N/A

X

J. Efficient and effective HR information system

X

X

N/A

N/A

X

N/A

X

X

N/A

X

K. Work activities classified by codes  

X

X

N/A

X

N/A

N/A

N/A

X

N/A

N/A

L. Identification of individual training needs and training programs

X

X

X

X

X

X

X

X

X

X

M. Identification of tools and processes requiring special or safety training  

X

X

N/A

X

X

X

N/A

X

N/A

X

N. Effective policies on workplace theft, violence and morale problems  

X

X

X

X

X

X

X

X

X

X

O. Employee grievance and ADR procedures  

X

X

N/A

N/A

X

N/A

X

X

N/A

X

P. Objective performance reviews  

X

X

X

N/A

X

X

X

X

N/A

X

Q. Objective discipline and termination procedures  

X

X

N/A

N/A

X

N/A

X

X

N/A

X

R. Workplace injury reporting and management systems, return to work program

X

X

N/A

N/A

X

N/A

X

X

N/A

X

S. Effective organizational communication  

X

X

X

X

X

X

X

X

X

X

T. Access to competent legal counsel  

X

X

X

X

N/A

N/A

X

X

N/A

X

U. Temporary, contract, and leased workers management  

X

X

X

X

X

X

X

X

X

X

V. Off-site storage of data and knowledge

X

X

X

X

X

X

X

X

X

X

W.  Ability to search information in disparate sites and data bases

X

X

X

X

X

X

X

X

X

X

 

Notes on Exposures to Liability and Compliance Needs:

1.       Profit and Loss Risks … these are the general business risks that can affect the profit or loss of the company.  These risks would encompass the entire spectrum of variables that any business faces.  It has been shown that companies that employ lean thinking and risk management techniques enjoy substantial cost savings.

2.       Corporate Governance and Compliance For All Stakeholders… covers compliance with the wide range of legal and ethical obligations that corporations and companies owe their stockholders or owners, the governmental and regulatory authorities, lenders, communities, customers, vendors and others.  This includes Sarbanes-Oxley Act and SAS-99.  Breaches of duty in this area may fall into any of the other groupings of exposures listed in this chart.

3.       Professional Liability … exposures covered by Professional Liability, Errors & Omissions and Directors & Officers policies as well as ERISA liability.

4.       General Liability …negligence and other sources of liability covered by Commercial General Liability and Excess or Umbrella policies, including industry specific endorsements.

5.       Quality System Risks … exposures of loss of business and customers due to insufficient quality, not meeting customer needs or loss of quality system certification; e.g., ISO 9000, QS 9000, Baldrige National Quality Program, etc.

6.       Product Liability … for dangerous or defective products manufactured or distributed by the insured.

7.       Employment Practices Liability … including: (a) liability under Title VII (including harassment), ADA, ADEA, FMLA and other federal, state and local statutes and ordinances; (b) wrongful termination, including breach of contracts and implied contracts; (c) negligent or intentional infliction of emotional distress, interference with contractual relations, defamation and other tort claims by prospective, current and former employees; and, (d) statutory liability pursuant to Fair Labor Standards Act and state wage and hour statutes, ERISA and similar regulatory acts governing compensation of employees.

8.       Worker’s Compensation … compensation for injured workers, employer’s liability and regulatory exposures under OSHA.

9.       Property Risks … exposures covered by Commercial Property, Inland Marine, Business Interruption and similar coverage.

10.   Benefit Plans … exposures in this category would include experience, administrative costs and compliance with applicable legal requirements.

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