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Riordan Corporate Compliance Plan - Assignment Example

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The author states that Riordan Manufacturers can ensure effective risk management in the company involving all the employees of the organization. Individuals should be allowed to give different suggestions that can be followed to ensure effective risk management in the company. …
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Riordan Corporate Compliance Plan
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? Risk Management Plan Riordan Manufacturing is a company that mainly deals with the manufacture of plastics. The company has grown over the past years and currently projects annual earnings of approximately $46 million. Riordan Manufacturing was started by Dr. Riordan and previously referred to as Riordan Plastics. However, two years later the company’s name was changed to Riordan Manufacturing. Since then, the company has grown in the manufacture of plastic beverage containers. Expansion of the company has also involved opening up of different branches in a variety of countries such as China (eCampus, 2005). The company has grown in operation and thus, its growth comes with many risks and liabilities (eCampus, 2005). This is because with the expansion, it will increase its capital base, resource base, and customer base. Location in different regions around the world such as China also implies that the company will be faced with different international rules and regulations that it will have to comply with. Therefore, with all these risks, the company requires a concrete risk management plan that can be used to ensure that any perils and hazards facing the employees and management of the organization are well handled. Risk management in the organization will require involvement of a number of persons in the organization (Hopkin, 2010). This implies that the internal environment of the organization will have to be keenly assessed in order to identify the major areas that can lead to risks in the company (COSO, 2004). The objects that have been set in the company will also be keenly assed in order to identify ways in which the risks might lead to failure of achieving the set objectives. In addition, both internal and external events that might lead to occurrence of the risks in the company will also have to be identified. Once such events have been identified, the risks will then be assessed and analyzed. Policies and control actions will also be identified in order to find the effective risk responses. Information will also be very important in the risk management plan. This is because; information will be used to learn more about the risks and ways of managing them. On the other hand, information has to be accompanied by communication. Once the relevant information about the risks has been identified, it has to be effectively communicated to the rest of the employees. In addition, Riordan Manufacturing will have to establish clear communication in order to ensure effective risk management (COSO, 2004). For instance, in the case of enterprise liability, the company has to ensure effective relationships with the community, in order to ensure that it minimizes its liability. After effective communication has been identified, the company will then have to monitor different sections of its operation that will require change or modification in order to ensure proper risk management (COSO, 2004). Enterprise Liability Enterprise liability refers to the responsibility that the organization has to its actions towards the public. The enterprise liability of Riordan Company involves many individuals such as the authorities responsible, the society, the employees and the management of the organization. Riordan Manufacturing is liable for a number of issues resulting from its operations (eCampus, 2005). For instance, the company is liable for any kind of pollution that it causes to the public. Since Riordan Manufacturing is a Company dealing with plastics, it might cause pollution to the environment through the gases that it emits. Therefore, this might cause a risk to the company’s operations since; higher authorities dealing with environmental conservation could sue the company. This is a risk that can only be managed by ensuring that the management of the organization communicates to the employees effectively about applying the right production methods. Employees in the company could also be trained on how to recycle waste products produced by the company (Hopkin, 2010). This way, the risks and perils will be minimized since; the organization will be following the given rules and regulations about pollution. On the other hand, if a company is being held liable for an act that is not true, then it can also seek legal counsel from the authorities. Riordan manufacturing is also liable for fair treatment of all the employees. In addition, it is the liability of the organization to compensate its employees according to the services provided. Therefore, risks such as being sued for poor compensation of the employees can be managed by ensuring that the employees are treated according to the rules and regulations that lay out their rights. For instance, employees have a right to safety and good health (Hopkin, 2010). Therefore, if Riordan Company will be subjecting its employees to poor working conditions, it will be fully liable for any harm or injury suffered by the employees. Therefore, the organization has to ensure that it takes caution in the way that it treats its employees. For instance, Riordan Manufacturing has minimized such risks by ensuring that it offers its employees all the benefits required by the law such as social security insurance and workers’ compensation (eCampus, 2005). Therefore, in order to minimize the risks causing such liabilities completely, the organization should ensure that it does not fail in the way that it treats its employees. To manage the risks that might be increasing the enterprise liability, the company must first ensure that it examines its internal environment effectively. In addition, the company must also ensure that it sets clear objectives (COSO, 2004). For instance, it could target on ensuring that all employees receive the required benefits. Internal and external events causing the risks should also be identified. For instance, the employees could be comparing themselves with employees in other similar organizations. This way, the company can then be able to identify the necessary control actions to implement (COSO, 2004). For instance, it could seek employees’ suggestions on such matters. Real and Intellectual Property A Company can have ownership of both real and intellectual properties. Real properties include properties that are tangible and that can be seen. Real properties include assets such as motor vehicles, buildings and other machinery. On the other hand, intellectual properties include rights owned by the Company. For instance, the founder of Riordan Manufacturing, Dr. Riordan, has obtained several patents regarding the unique polymers that he produced using plastic substrates of a high strength (eCampus, 2005). This way, other manufacturing companies producing plastics cannot steal his unique ideas. Therefore, intellectual property enables a company to have the rights to production of unique products using specific ideas that are only known to the inventor. The risk that the Riordan Company is likely to face regarding its intellectual property, is the risk of having an employee or a competitor using the rights illegally. Different individuals normally steal the rights of ownership from a company. However, if another company uses the processes that are owned by Riordan Company, then the management will be able to sue for the ownership of the rights. On the other hand, the risks that can be associated with real properties include destruction or theft of the assets (Hopkin, 2010). Such risks can be managed by ensuring that the internal environment is well examined to ensure that no individual has conflict of interest in the properties of the company. In addition, events that are likely to lead to loss of both real and intellectual properties should be examined. For instance, there could be a competitor company aiming at identifying the types of plastic substrates used by Riordan Company. In this case, the organization should assess the kind of measures it should instill in order to ensure that its intellectual properties are well secured. Other risks that are likely to occur regarding both intellectual and real properties should also be assessed. For instance, the company could assess if the storage mechanisms are safe and secure (Hopkin, 2010). Cabinets where documents certifying ownership of intellectual property are kept should also be well secured with passwords and locks. This is in order to minimize the risk of theft of such documents. On the other hand, buildings where other physical assets such as computers and production machines are kept should be well secured from such perils as fire and theft (Hopkin, 2010). Once the organization has taken care of all these components, it should then monitor other changes that need to be implemented in the operation in order to ensure effective risk management. Governance principles of regulatory compliance requirements The organization should ensure that it complies fully with the rules and regulations that have been laid out by the government (Hopkin, 2010). In addition, the government also sets out certain principles for the performance of all manufacturing companies. Therefore, Riordan Manufacturing has to ensure that it adheres to the requirements that have been provided by the government. For instance, if the government could state that the company has to be socially responsible to the whole community, the company will have to follow such regulations in order to avoid being held legally liable. Other issues that may lead to government intervention include litigation, tax requirements and real estate matters (eCampus, 2005). Such risks can lead to arising of legal matters which will require payments of legal fees. To manage such risks, Riordan Manufacturing has to ensure that it communicates to all its employees about the importance of adhering to government rules and regulations. In addition, the events that may cause such risks to arise also have to be identified. For instance, it could be because of having corrupt and incompetent employees in the organization. Therefore, the organization has to establish policies that will ensure that it follows all regulations (COSO, 2004). On the other hand, communication is also important. The company can manage such risks by informing the employees about the laws and regulations that have been set out by the government. Finally, managers of Riordan Company should continue to monitor other areas of the organization that might lead to non-compliance with government rules. The specific international laws must be adhered to by Riordan manufacturing The employees of Riordan Company should adhere to a number of international rules and regulations. For instance, the both the employees and company should adhere to the tax laws. On the other hand, Riordan manufacturing should ensure that it follows the employment laws that have been laid out internationally (eCampus, 2005). This is because; different countries have different employment laws. Therefore, the company should ensure that it complies with all the employment laws of the countries where it has opened up its branches. Immigration matters should also be adhered to since; none of the employees should migrate from one country to another without following the correct legal procedures. Civil litigation involves all the actions that revolve around civil laws such as religion and marriage issues. The employees also need to be aware of the custom regulations in order to check on their codes of conduct and moral values (eCampus, 2005). Some of the steps that employees can follow in order to ensure that they adhere to these laws include: 1. Employees should first understand the international laws in order to be able to comply with them. This is because; some of the employees break laws because they were not even aware that such laws existed. Therefore, the company could take the responsibility of training all its employees on the laws that they should follow. 2. Employees should also ensure that they act ethically if they are to comply to the international laws too. For instance, if the employees are morally upright, then they will not be tempted to act against the international laws. 3. Employees should also undergo severe training in their work in order to ensure that they grasp the key areas that should be maintained in the company. This is in order to ensure that they do not act differently from the direction prescribed by the international laws. In conclusion, Riordan Manufacturers can ensure effective risk management in the company involving all the employees of the organization. Individuals should be allowed to give different suggestions that can be followed to ensure effective risk management in the company. In addition, the organization should also ensure that it follows the eight components of risk managements thoroughly. This way, inefficiencies that are likely to be incurred in the process will be avoided. References Committee of Sponsoring Organizations of the Treadway Commission (2004, September). Enterprise RiskManagement —Integrated Framework: Executive Summary. Retrieved May 16, 2013, from http://www.coso.org/documents/COSO_ERM_ExecutiveSummary.pdf eCampus (2005). eCampus: Login. Retrieved May 16, 2013, from https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Riordan/Legal/Overview.asp Hopkin, P. (2010). Fundamentals of risk management: Understanding, evaluating, and implementing effective risk management. London: Kogan Page. Read More
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