ERM-BC-COOP: Often overlooked risk

 

Practitioners worth their salt always consider succession planning as part of a true enterprise risk management/business continuity plan - if it is not "enterprise," it's not really a "plan."

But we, this scrivener included, rarely think about is the financial well-being of senior management.

Let's say that we have a family-owned business, and one of the family members is the major stockholder.

As long as the major stockholder is alive and both physically and financially healthy, no problem.

But if the major stockholder "dies" financially, what impact will it have on the business? Will it drag the business down because the major stockholder's personal and business finances are comingled? (It works the other way around, of course, and that is more common; the business fails and the principals are financially injured or ruined.)

If the major stockholder physically "dies," is there a document in place (and where is it) to assure a smooth distribution of the (now-deceased) major stockholder's company assets (stocks) to the surviving stockholders or to new stockholders?

Granted, this falls under the general heading of "succession planning," but for most practitioners, "succession planning" is all about who is going to fill the missing person's job on either an interim or permanent basis.

While the example above typically is a concern of small businesses - Mom-and-Pop organizations - it could, should, also be applied to any organization that has "shared" ownership - that means stocks or other "paper" owned by more than one person.

Consider a major conglomerate, a General Electric-size company. If an executive has been acquiring discounted stock over a number of years and suddenly this stock comes on the market, what will this flood of paper do to the company's stock price? The fact that the executive or executive's estate must sell already makes an impact on the paper's value - if the exec improved the organization's position, the stock may lose value; on the other hand, if the exec was driving the company into the ground, the value may go up.

As with all things "risk management," the practitioner only can make the client aware of the risk and suggest means to avoid or mitigate the risk. In this particular case, this practitioner would advise the client - organization or individual - to seek the advice of both legal and financial planning experts.

 

John Glenn, MBCI
Enterprise Risk Management practitioner
http://JohnGlennMBCI.com
JohnGlennMBCI at Gmail dot com

Hit parade

 

I have a "hit counter" on several of my Web site pages and blogs.

It's not that I'm vain (particularly), but I like to know if what I write is being read, or at least visited.

At one point I was logging hits for my professional site; "See, people DO visit my pages."

But you have to be careful when hits are counted.

Search engines tend to do "shotgun" searches.

For example, someone did a search for "CVG US Air Ticket Counter hours".

I mentioned CVG (Cincinnati/Northern Kentucky International Airport) in several articles, but never in connection with US Air; CVG was my transfer point for Delta Comair flights between ORF (Norfolk VA) and CRW (Charleston WV).

But Google included my URL in the results, and the person initiating the search apparently waded through a number of other returns to get to http://johnglennmbci.blogspot.com/ . The search also should have picked up several articles at http://JohnGlennMBCI.com that included "CVG," "Comair," or "USAir."

I traveled between CRA and ORF twice-a-month for nearly a year, mostly via Comair, which regularly lost, but quickly found and delivered my luggage, but sometimes via USAir (and CLT - Charlotte Douglas International Airport]), which also regularly lost my luggage, delivering it the next day.

Do I record this visit even though I can tell by the search criteria that my wonderful words were not really what the searcher wanted to see? Or maybe the search engine snippet "John Glenn's Thoughts. Thoughts on Enterprise Risk Management, .... On a personal note, I was stranded on the ground at CVG for too many hours while DL ..." simply intrigued the person and he, or she, was enticed to read the blurb.

I'll never know, but it is a hit I will leave off my personal "hit list."

On the other hand, I know I have my followers.

There is someone in Chandler AZ who is a repeat visitor to "John Glenn's Thoughts." I have no idea who this person might be and why my blog seems to be a regular stop. I'm delighted, of course, but also curious. When I start to publish the 2010 "hit list" on the JohnGlennMBCI.com site, I'll mark Chandler AZ as "multiple hits."

In the "For What It's Worth" department, I use the free hit counter from Statcounter (http://www.statcounter.com). I've used it for years and always been pleased, albeit sometimes left wondering why someone came to my pages and, more often, why there are repeated hits within seconds - does the connection break, does the visitor read the first paragraph and decide that's not what was wanted?

Great fun, hit counters, but the results can be deceiving.

 

John Glenn, MBCI
Enterprise Risk Management practitioner
Hollywood/Fort Lauderdale Florida
Searching for a new job in, or from, southeast Florida