Risk managers looking to anticipate and contain shareholder lawsuits–attributable to everything from accounting irregularities, to corporate governance breakdowns, to lack of preparation for a natural disaster–are juggling a broader spectrum of exposures than ever before, industry experts warn.
“The job of the risk manager is bigger today than it's ever been,” said Donald L. Schmidt, chief executive officer of Preparedness LLC, in Sharon, Mass. “Because the breadth of threats is much greater, the consequences [to a company's stock price] can also be more significant today. But it means the risk manager has got to be plugged in.”
As well as understanding their firm's day-to-day operational exposures, risk managers need to be “tied in with the big [financial] issues” by working more closely with those responsible for finance, strategic planning, public affairs and communications as well as the general counsel, he said.
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