I have prepared the following Enterprise Risk Management (ERM) plan for your review. This plan was developed for use in Riordan Industries, Inc., Riordan Manufacturing, and all other Riordan ventures, subsidiaries, and partnerships. Unless otherwise noted, the term “Riordan” will refer to any or all of these entities.
I have used the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework as a guide for recommendations regarding internal controls and corporate governance.
The goal of this document is to provide a broad enterprise level framework that unifies the various parts of Riordan, to create an integrated whole. In doing so, the ERM mitigates the legal liability of the officers and directors of Riordan.
Alternative Dispute Resolution
It is reasonable to assume that in the course of business, Riordan will encounter conflict with a customer, a vendor, an employee, or some other person or organization. Riordan Manufacturing currently retains an independent law firm to handle all legal matters. Aside from the practice of keeping an attorney on retainer, Riordan appears to have no particular dispute resolution process in place.
If a conflict escalates to the point that legal action is taken, it is most likely in Riordan’s best interests to settle disputes through the process of mediation.
Mediation is preferable to other methods of dispute resolution for several reasons: Riordan avoids the risk of a potentially hostile venue or jury, and the mediator may help reduce settlement expectations into a reasonable range. (Camarra & Foster, 2007). The process of mediation is less expensive than other methods, particularly that of a trial, and it maintains the confidentiality of the parties. (Peters & Mastin, 2007). No other process offers Riordan as much control over the outcome as this.
Moving forward, Riordan internal legal counsel should work with management and the law firm to identify what level of risk is...