| RISK MANAGEMENT
US – FLORIDA
KEY TAKEAWAYS
Aligning with your risk appetite
Proactive risk management: Businesses should adopt a strategic, proactive approach to identify and mitigate risks, ensuring alignment with their risk appetite and strategic goals. This includes policies, procedures, and systems to monitor risks like cybersecurity, compliance, and operational challenges.
“Digital threats to businesses
adopt a formal Information Security Program that requires the business to, among many (many) other things, conduct regular proactive risk assessments and create a written incident response plan that can be followed in the event of a data security event. Q2 In times of economic distress and change, how can professional services firms assist in maximising value while minimising disruptions? Professional services firms can and should play a critical role in helping businesses maximise value and minimise disruptions. While many businesses duly rely upon in-house legal departments to address most of the businesses’ needs, in-house counsel can reap significant benefits from collaborating with outside counsel in a cost-effective manner. For example, a business that collects consumer information and is covered by the Federal Trade Commission’s Financial Privacy Rule is required to provide consumers and customers with a Privacy Notice explaining how the business may use the information. An in-house legal department may be charged with the task of ensuring that the contents of the Privacy Notice accurately reflect how that particular business uses the consumer information. However, an outside professional services firm may take a different approach. Instead of looking only at whether the Privacy Notice complies with the manner in which the business uses the consumer information, the outside firm may also consider how the form may affect the value of the business in a subsequent merger or acquisition. In businesses/industries where potential acquirors may seek to apply a discount to the purchase price of a business where the customer data cannot be used as broadly as it wishes, adjustments to the form could mean a significant increase or decrease in exit value.
and their data are increasingly
Professional services collaboration: Outside professional services firms can
provide valuable insights and cost-effective support to businesses, helping them navigate regulatory requirements and maximise value, especially in areas like mergers, acquisitions, and privacy compliance. Turning risk into opportunity: By proactively managing risks, businesses can gain a competitive edge, reduce long-term costs, and prevent potential disruptions. Proper risk management not only protects against financial losses but also enhances reputation and customer trust.
pervasive, and can be a threat to survival.”
Q1 How can proactive risk management strategies help businesses navigate regulatory and economic uncertainties? It is no secret that a business’s ability to quickly adapt to change can be one of its most important attributes. However, all too often, business leaders become myopically focused on the company’s most immediate needs, thereby forcing the business to take a reactionary approach to addressing any regulatory or economic changes. Michael Semanie Founder Semanie Law
Q3 How can clients approach the risk of uncertainty and turn it into opportunity? In business, risk and reward are inextricably intertwined. In the context of regulatory and economic uncertainties in a globally interconnected business environment, several opportunities exist for businesses to create value. First, by adopting a proactive risk management strategy, businesses necessarily gain a competitive advantage over those who refuse to do so. As we have seen recently, customers tend to reconsider doing business with companies who experience a data security breach. A business who has properly mitigated its risk then positions itself to acquire those new customers from competitors who leave themselves vulnerable to such data security events. Additionally, the old adage “an ounce of prevention is worth a pound of cure” is most apropos in the context of proactive risk management. Implementing a well-suited risk management strategy can reduce long-term costs by minimising the risk of incidents, the potential for disputes and litigation, and significantly lowering the likelihood of regulatory investigations and enforcement actions. Not only do these risks have the potential to result in large monetary penalties and awards, but the damage related to distraction from the business and negative publicity is inestimable.
In light of the globally interconnected (and often, globally interdependent) nature of modern business, many companies would be well-advised to adopt a strategic approach to identifying and mitigating such risks before they occur. Comprehensive risk management programs should align with the company’s risk appetite and strategic objectives, and they should address the various types of risks that the business faces (for example; credit, market, liquidity, and operational). Effective programs include policies, procedures, and systems for identifying, monitoring, and mitigating risks, as well as ensuring compliance with regulatory requirements. Adopting risk management
policies that are specifically tailored to a particular business and industry is critically important in the context of some of the more rapidly evolving areas of both risk and value – cybersecurity and technological risk. Digital threats to businesses and their data are increasingly pervasive, and they can be a threat to a business’s very survival. Moreover, regulations regarding cybersecurity requirements for business are ever evolving, with new legislation and amendments being proposed and adopted on a regular basis. Some of those regulations require businesses to take a proactive approach to risk management. For example, the U.S. Federal Trade Commission’s “Safeguards Rule” requires covered businesses to
Businesses should also lean on their professional service firms for informational leverage. While a business gains significant institutional knowledge about its own operations and experiences, many professional services firms have gained significant knowledge about a wide variety of the risks and pitfalls potentially associated with actions and business decisions that the firm has been called on to help clients in the past.
ABOUT US... semanielaw.com
Michael A. Semanie is the founder and President of Semanie Law, PLLC. In his legal practice at Semanie Law, Michael represents businesses in a broad range of corporate and commercial matters. After studying economics and psychology as an undergraduate in college, Michael went on to earn a Master of Business Administration (MBA) degree, and he regularly utilises that business knowledge to provide legal guidance to his business clients. Michael also has a unique passion for the retail motor vehicle dealer industry. Michael represents auto dealers in corporate governance matters, dealership buy/sell transactions, manufacturer disputes, and various other operational, compliance, and general counsel matters. Michael serves as a member of the board of directors of the National Association of Dealer Counsel and regularly speaks at industry conferences and events. Michael is licensed to practice in the state and federal courts of Florida, New York, New Jersey, and the District of Columbia.
At Semanie Law, we are obsessed with fueling your business. We believe that our success is inextricably tied to the achievement of your business goals. As a result, we don’t sit back and wait to react to legal issues after they have become problems. Instead, we strive to add value to your business by identifying legal trends before they impact you, turning that knowledge into actionable insights, and proactively helping you make practical decisions about your business.
+1 321 341 9565 msemanie@semanielaw.com irglobal.com/advisor/michael-semanie
irglobal | 69
68 | irglobal
Made with FlippingBook - professional solution for displaying marketing and sales documents online