Today more than ever there is a critical need for a Risk Assessment service that is firstly affordable, secondly, detailed enough to be of value to both non-executive and full time Directors of any medium to large sized company and finally is also independent.
Have you ever wondered which of your current group of outsourced companies may be floundering? Who is giving you this information? What are they actually checking? What is the source of the information? When was this information last updated? Most importantly, what would happen to your company if the information was outdated or wrong? What is your personal liability?
An independent objective report should be obtained to check the health of your current offshore operations, especially if one or more particular company's failure would impact on your ability to run your operation smoothly and efficiently.
Even if you run an off-shore office, where you import most of your goods from, the need to test the transparency of your operations should be foremost on your mind.
We offer a full Risk Assessment of your company's offshore operations. Before looking at your off-shore operations, we need to assess your company. Our staff needs to liaise with your sourcing department as well as with your accounts department to pinpoint which specific companies you should be looking at for risk assessment.
Once we have assigned a ranking of importance, it is up to you to choose which off-shore companies you would like to be assessed.
We have found in the past that most companies have a smaller number of companies that supply most of their product. The usual range is between 5-15 companies which can be targeted at one time.
Assessment costs are based upon the number of companies targeted and their physical location throughout the country they are positioned.
Once you have targeted your companies that need to be assessed, we individually approach each company. We have a metric that we work with including not only the financials of a company, but an "on ground" company-audit listing all information on their logistics, internal and external infrastructure.
We can target as many of your companies as you would like us to, from 1 to 100. However, as a starting point we highly recommend our "TOP 10" company assessment package which analyses the top ten companies (in volume) that you use to obtain the majority of your imported goods.
As a start, our report will help identify any companies that are of concern to your Company's lifeblood, production, which may be impaired or affected adversely by an event outside of your control. You will then have the opportunity to work with your supplier to remedy any identified issue or alternatively you may decide to source additional manufacturing resources that meet your standards.
For good corporate governance, Operational Risk Assessment is a pre-requisite.
Australian Stock Exchange guidelines state clearly that, "Director's and non-executive Directors owe a company a duty to take a reasonable care in the performance of their office. They need to take reasonable steps to place themselves in a position to guide and monitor the management of the company".
The Courts of NSW have said, "anyone who accepted a board seat was making a commitment to understand the 'particular nature' of that duty and to make informed decisions".
Clearly, every Director and Non-Executive Director must know and understand the risks involved in a company's reliance on offshore manufacturers, especially as they may impede the running of the operations locally and conversely have a dramatic effect on overall gross margins, profitability and even survival.