A civil lawsuit or investigation by a government agency can derail a company’s goals while diverting precious time and resources from business operations. Business leaders who want to limit their exposure to such problems can help themselves by following a few commonsense risk mitigation guidelines.
Take internal complaints seriously
From discrimination claims to the emergence of a whistleblower, many legal pitfalls can arise from within a business. Steps you can take to mitigate such risks include:
- Implementing education programs on topics such as safety, diversity and anti-discrimination
- Immediately addressing complaints when employees bring them up
- Investigating complaints through a fair and impartial system
When employees trust a company to take their complaints seriously, they will be more likely to try to resolve them internally. If a lawsuit does arise, the presence of a robust and impartial in-house investigation can only shed a favorable light on your company.
Communicate through accepted channels
Novel technologies such as texts and instant messages have changed the way we communicate, but in the corporate world, using the latest app to communicate in-house or with clients can lead to trouble. Last year, JP Morgan was fined $200 million for allowing employees to exchange sensitive information through a popular messaging app, thus avoiding regulatory oversight. Your industry may not be as tightly regulated as JP Morgan’s, but missing records will not help your prospects in the event of an investigation.
Implement strong document retention policies
The above-mentioned case illustrates how costly lapses in document retention can be. Fulfilling your record-keeping obligations requires knowledge of:
- How long to store certain types of records
- Protocols for the storage of digital and hard-copy records
- Your company’s digital storage capabilities
- Accepted document destruction protocols
At the earliest sign of a lawsuit or investigation, the law may require you to suspend normal document destruction policies. Failure to fulfill your legal obligations in such a situation can result in fines and even criminal charges, even if the underlying claim lacks merit. Proceed carefully and take the right legal steps to navigate these urgent situations and you can increase your chances of avoiding a negative outcome.