Monday, September 30, 2013

There is a trendy topic in today's business world that is considered one of new and best management practices, and that business owners and executives not always understand very well. It is risk management. Risk management is certainly nothing new, but it's emphasis in the business climate has never been stronger. These days, no corporation or medium sized business can live without it for long. It is the process in which companies identify their risks, assess them, take action to minimize and monitor and control the chances of having an unfortunate event occurring. It may seem simple, but the reality is that it is quite complicated because all the process depends on accurate and quality information. Obtaining the right information is not so easy.

Considering that countries like Russia, China, Malaysia, Ghana, Nigeria and Philippines have been listed as high fraud risk countries, some extra precaution won´t hurt. Professional private investigators do not limit their jobs to following unfaithful spouses. These days, an international investigation company can help business clients obtain the information and evidence they need to make an informed decision, and uncover pertinent information that will point out if there is any unknown risk in your operations, partner or investment that you're considering.

Consider the following situations where investigators can add significant value:

1. Hiring. Recruiting new people is always a risk regardless of the level. Discreet investigations can minimize the risk of a negligent-hiring lawsuit when hiring internationally. A pre-employment screening will help your business minimize the risk of hiring someone that is unqualified, unethical or not who they claim to be. Making sure you have an honest candidate is the first step and one of the most important in risk management.

2. Assessing your value chain. Providers have a great weight when it comes to your business sustainability because they are part of your reputation. Your company is at risk when your providers decide to ignore anti-corruption and trade control laws, or international treaties on fair commerce. In a globalized world, where emerging economies like the Philippines, China and India are providing a great portion of manufactured goods and services to developed countries and clients, verifying your foreign business contacts is essential.

3. Investment opportunities. Reducing risk when investing overseas starts by obtaining reliable, accurate and hard to obtain information. In most cases, getting the facts you need and verifying a reputation of a person or company in a foreign country, or checking to see if a factory or office really exists, requires the support of a private investigator in that country with access to local information, who speaks the language and can verify the facts.

4. Company verifications. A company verification will provide information on stock ownership, legal registration, operations, reputation, verification of the management, court and litigation history, assets, and screening the case for fraud. If you're planning to put your money in South East Asia, Africa, China, Latin America or India, or even Eastern Europe, you had better be sure the company and contact you are dealing with are legitimate.

5. Mergers and acquisitions. These might be the only situations in which companies are really aware of financial risk and really do their homework, but due diligence is often done in house and does not adequately identify risk and verify foreign contacts at the same level that experienced private investigators do. Think of an investigator on the ground where you need him as your eyes and ears, and a wise form of insurance to have. They can obtain independent references, photographs offices and facilities, conduct asset searches, and verify all business and legal filings, and properly screen the case for fraud.

Risk management starts with being able to obtain useful and precise information at the right time. Be safe. When considering a new investment or new partnership, contact a professional.

A. Hathaway
© 2013 A. Hathaway

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