Something I learned at a meeting this morning was surprising, and brought home how easy it can be for a risk manager to overlook a facet of the organization that could have huge implications.

Take global operations or companies with satellite offices, for example. Patrick Finegan, a principal with Towers Perrin and senior consultant in its ERM practice, pointed out that risk managers tend to be more aware of issues in their home office than what might be going on in the companys outer-lying locations. Here is where the human factor comes in. Its easier to keep track of issues when theyre morereadily observed or when word of an event, such as an injury, gets around.

At outer lying locales, however, safety issues or other risks can fall through the cracks. Whats more, some risks may not show up in assessments the company conducts of these locations. What should a risk manager do? Hop on a plane and do on-site inspections? Assume that managers of these locations are or will be their eyes and ears?

Periodical visits may be necessary in some instances, but this also depends on the industry, Mr. Finegan said. For example, in the pharmaceutical industry, travel to locations isnt as necessary because assessments can be done online.

In other cases, employees can be surveyed to find out if risk factors are higher than they ought to be. In a hospital setting, assessments can be made of unnecessary procedures and compared to the previous year or to competitors. He said that while the goal is to have no unnecessary procedures performed, a 15 percent improvement in a year is a goal that is achievable and results can add up year to year.

This can be a huge issue if overlooked, especially in some industries and also depending on the location and there are effective ways tomitigate these risks.

Is risk management in outlying offices something your company may be vulnerable to? How have you and your company addressed this?

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