Risk management has traditionally been about mitigating or, ideally, eliminating risks inherent in the daily business of corporations. But a new trend looks to make legal risk management part of an enterprise's core competitiveness.
November 2, 2012 (Newswire) - Risk management has traditionally been about mitigating or, ideally, eliminating risks inherent in the daily business of corporations. But a new trend looks to make legal risk management part of an enterprise's core competitiveness.
As part of its ongoing webinar series providing business intelligence and experienced China market expertise, Z. H. TANK speaks at length with Ye Xiaohua, Enterprise Institute President for China Association of Business Law.
Beginning with a review of the core-competitiveness concepts raised by University of Michigan's Prahalad and the London School of Business' Hamel, Ye stresses that corporate competitiveness gains for enterprises through legal risk management should not be made merely with defesnive posturing, it must be proactive.
To properly use legal risk management to improve core competitiveness, enterprises first must understand exactly what the practice entails. Legal risk management is the process of evaluating potential responses to enterprise risk and then choosing which potential strategy best serves the enterprise's interests. More than just legal analysis, the practice requires including the evaluation of the socioeconomic realities of the specific business environment.
To support his arguments Ye's presentation includes a detailed ranking of China's top 100 public companies by legal risk cost index.
As a further step, Ye presents some of the real-world cases, including the trademark battle between herbal tea beverage makers Jiaduobao and Wanglaoji, the location decision by Apple on its OEM factories in China, as well as Mengniu Dairy's establishment of its large scale supply chain. These case studies vividly reflect the ins and outs of legal risk management in China -- involving food safety, value chain optimization, and environmental and labor issues.
Most importantly, in a section outlining practical how-to aspects of refined legal risk managment in China, Ye reiterates that organizations should establish well defined processes for legal risk modeling. Ye's suggestions for improving legal risk management include systematic training for policy makers and management as well as for corporate departments that deal with legal affairs. Organizations should also establish regular channels of communication and define processes, including risk models.
ABOUT YE XIAOHUA:
Mr. Ye Xiaohua is the President for Enterprise Institute of China Association of Business Law. Meanwhile, Ye is leading a task force ("Dratle Law Committee") that aims to pioneer models through which corporations can evaluate legal risks and form strategies to optimize refined legal risk management ROI. It is also the nation's first professional institution focused on the study of enterprise legal risk.
About Z. H. TANK
Z. H. TANK is an online library of webinars for Chinese elite business executives and professionals to sharpen their management know-how. Through customized webinars, homegrown and global industry leaders share with the audience the latest trends, best practices, hot topics, and technologies that impact the world of business. The bilingual library of webinars also aims to enable the seamless integration between global perspective, know-how and local business wisdom. Z. H. TANK is a sibling brand of China business intelligence specialist Z. H. STUDIO.