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Enterprise risk management (ERM) and legal risks

The Conference Board and Marsh Inc. recently surveyed 271 North American and European senior executives about their companies‘ ERM programs Of five risk categories, the one the most respondents were “not at all” or “slightly” willing to tolerate risk, was “legal.”

Seventy percent (70%) took that position, as compared to 53 percent for “financial” risk, 52 percent fpr “hazard,” 39 percent for “operating,” and 26 percent for “strategic.” (ExecutiveAction, Jan. 2005, No. 132).

Perhaps the threat of personal liability, the specter of jail, or the fearful snares of lawyers make senior executives respect the law more than the other risks. Law departments should rise in their esteem.

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