Tort And Regulatory Risks Essay

1431 WordsSep 24, 20106 Pages
Recognizing and Minimizing Tort and Regulatory Risk In current business environment laws and government regulations for organizations are becoming stricter affecting all the aspects of business putting into practice severe penalties such as fines and damages for non-compliance of regulations. Alumina needs to deal with regulatory risks and tort liability on every day basis. Alumina and other organizations need to be aware of present and future regulation changes to comply with the regulations for operating the company effectively in a critical business market. In a situation like this the company must have all the necessary measures to minimize the organization tort liabilities. The major threat to the company is the regulatory risk. The cost of non-compliance of regulations is not confined to legal fees, fines, and compensation but also the reputation of the company is lost in the business market and other tort liabilities. To limit the company’s severances of the possible exposure to risk, companies are spending a large amount of funds, time, and human resources on regulatory risk management methods. Company’s that spends large amount of money and resources for managing the risks will minimize their company’s risk exposure and will reduce the regulatory violations and tort liability costs associated with it. The foremost step is drafting a strategic plan that recognizes and manages tort liabilities and regulatory risks. To effectively execute the plan, the plan must have a detailed description regarding preventive, detective, and corrective measures that will reduce the tort liabilities in an organization on and will guarantee the company is following the best practices to accomplish the company’s goal. Tort and regulatory risk management is a painful and time-consuming process, but when Alumina carries out the plan effectively, the result can bring about many
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