Running head: IDENTIFYING REGULATORY RISKS
Identifying Regulatory Risks
University of Phoenix
LAW 531
Identifying Regulatory Risks
Corporations, such as Alumina, must be vigilant with respect to its conduct, as well to the product it is providing to consumers. One of the main reasons for these concerns is the possibility of tort lawsuits stemming from regulatory risks. These lawsuits can be extremely damaging to a companies’ profit and in extreme cases can cause the company to close its doors due to bankruptcy. Tort lawsuits, although damaging to some companies, are beneficial due to the governance laws they create and implement. These laws help to guide other companies’ actions and processes to ensure repeats of torts are not repeated. Each industry has its own set of torts it must guard against. In the case of Alumina, the torts they are dealing with are mainly related to environmental processes.
Identifying Regulatory Risks
Regulatory risks, such as tort liability, have been changing companies’ governance for years. These governance changes have been more prominent over the past 7 years since the fall of corporate giants Enron and HIH. In order for Alumina to properly identify, prepare for, and manage regulatory risk, there are a number of questions they must answer. If the answer to any of the following questions is “yes,” than actions should be taken to reduce risk:
1. Does Alumina have a legal duty of care to another person?
2. If so, will actions taken by Alumina breach that duty in any way?
3. If the duty of care is breached, will claimants suffer damages?
4. If damages are suffered, will those damages be proximately caused by Alumina’s breach of duty?
Working through this series of questions will help Alumina identify early on in the planning stages whether or not they are at risk for “tort lawsuits” from consumers. These lawsuits can come from Alumina being guilty of negligence, gross negligence, or intentional...