June 25th, 2010
Ask senior executives to assess the risk in a business matter and many will turn first to their lawyers for guidance.
They’ll seek a legal opinion on topics ranging from employment decisions to work practices, to product development, to financial transactions, to manufacturing processes.
In our litigious society, where legal costs and damages can be crippling, this makes sense. Skilled lawyers can quickly identify legal hazards and readily find cases where bad outcomes occurred or were prevented. They will also identify strategies for minimizing risk and lay out defenses that can be constructed to limit exposure.
But my advice to organizational leaders is to rely on their legal experts with caution and in the proper context. It’s dangerous to focus only on legal risk and potential limits on exposure alone, or to give them overarching precedence in looking at business issues.
As I pointed out in my recent post “Values Trump Laws for Risk Management,” business risk is much broader than legal risk.
In today’s world, organizations that limit their risk analysis to legal exposure or, more likely, give it too much weight may put their reputations and viability at greater risk in the process. Legal risk is one of many starting points, not the end point for risk management. This is true for people issues as well as manufacturing and other business practices....
Stephen Paskoff is a former EEOC trial attorney and the president and CEO of Atlanta-based ELI Inc., which provides ethics and compliance training that helps many of the world’s leading organizations build and maintain inclusive, legal, productive and ethical workplaces. Paskoff can be contacted at firstname.lastname@example.org.
Full Blog Post: http://workforce.com/wpmu/ethical/