Running Head: RECOGNIZING AND MINIMIZING
Recognizing and Minimizing Tort and Regulatory Risk
Denise Flowers
13 January 2008
University of Phoenix
Liborio Canales
Recognizing and Minimizing Tort and Regulatory Risk
In today’s business market, laws and government regulations affect almost all aspect of business. The laws and regulations for businesses are becoming increasingly stricter and carrying severe penalties in fines and damages. Alumina and other companies must be aware of current and upcoming regulatory changes so that the company can minimize their tort liabilities for non-compliance of regulations. To effectively operate a business in today’s market, it is crucial that you have measures in place that limit the company’s tort liabilities. Regulatory risk is the most significant threat to businesses (The Economist). In response to the severity of the risks, a vast majority of businesses are spending more time, money, and resources on regulatory risk management. The first step is creating a plan that identifies and manages regulatory risks and tort liabilities. In order for the plan to be effective it must have preventive, detective, and corrective measures that will lessen tort liabilities in a company.
Torts and Regulatory Risks
In the Business Regulation simulation, during a routine Environmental Protection Agency (EPA) evaluation, Alumina Inc. was found in violation of environmental discharge five years ago(University of Phoenix, 2008). The company acted quickly in correcting the matter and the subsequent environmental audit was reported as corrected. Once Alumina was back in compliance, they did not implement a plan to prevent this type of regulatory risk or future tort liabilities from happening again. They were content with just being in compliance. Because Alumina did not do enough to deal with the previous tort liability in an effective way, it has now turned into a current tort liability. Kelly Bates is...