Tort & Regulatory Risk

1109 Words5 Pages
Alumina Inc. is an international, United States based, aluminum maker worth four billion dollars. The company focuses on automotive components and the manufacturing of packaging materials, bauxite mining, alumina refining, and aluminum smelting (University of Phoenix). After the challenge that Kelly Bates posed, Roger Lloyd, the chairman of the organization (University of Phoenix), realized that the company needed to come up with a plan to manage torts and regulatory risks. Common business torts include intentional torts, unintentional torts (negligence) and strict liability. Intentional torts refer to actions that are taken with the intent to cause injury to the plaintiff. Unintentional torts, or negligence, refer to actions that are…show more content…
78-79). Although this is not a tort against Alumina Inc. it is a risk they still encountered. A preventative measure to minimize this tort risk is to make sure Alumina Inc. is consistently following regulatory guidelines. If there a regulatory compliance team was created to monitor this, the violation from five years ago most likely could have been avoided. A team needs to be created to do periodic checks to ensure regulations are indeed being followed and to correct procedures that are not meeting regulations. The team can be formed internally or Alumina Inc. can hire consultants to regularly monitor the organizations activities. It would be more beneficial to have outside consultants as they will have a more objective view and will be less biased in maintaining records and checking compliance. “Risk debate” is another way to minimize tort risk and is partly corrective and partly detective. It involves discussing all possible risks and developing a plan to deal with them (Lahnstein, 2004, p. 514). This might not prevent or minimize the risks themselves, but plans will help minimize the damage done to the company if something were to happen. Plans for each tort or regulatory risk would include defining the risk, coming up with all possible outcomes and corrective measures. In conjunction with coming up with corrective measures the organization needs to assess what impact
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