First Step in Fighting Lawsuit Abuse – Risk Management
Nov. 20, 2011 (corrects amount of compensatory damages in lawsuit)
Published reports on two southern California media Web sites illustrate the polarizing effects of laws affecting business.
The first article in Signon San Diego, Businesses fight ‘abusive’ lawsuits, explains the fears and concerns of many small businesses. Written by Tanya Mannes, it describes how a legal-reform organization is leading the fight against what it terms as lawsuit abuse in California.
A group calling itself California Citizens Against Lawsuit Abuse (CALA) has issued a report showing what it believes are large number of disingenuous lawsuits, and is lobbying the California Legislature for legal reforms.
Ms. Mannes quoted a CALA regional director, Maryann Maloney Marino:
“Anybody can be subject to a lawsuit in California…More than 1.4 million lawsuits were filed last year alone, but that does not take into account the hundreds or thousands of demand letters businesses get.”
As part of its marketing, the group launched a Facebook page.
Yes, as a biz coach, I’m empathetic for business having to cope with the litigious environment in California and across the nation.
On first glance, a second article would seem to support the group’s cause. The CBS headline reads: Jury Awards Woman $65M In Punitive Damages.
However, the article – one of many on the case – explains how and why jurors reacted to a healthcare company that employed a male nursing assistant who sexually abused a patient. Encino-Tarzana Regional Medical Center and its former owner Tenet Healthcare Corp. were ordered to pay the victim $2.36 million in compensatory damages.
The article also relates how the jurors in their deliberations were so deeply moved they arrived at the $65-million figure in punitive damages.
Little wonder. The article indicated the jurors weren’t convinced the company was doing its best as a healthcare organization – were they thinking this was an example of the term, oxymoron?
To exacerbate the situation, the employee-predator, a fugitive, was cited on Fox television’s “America’s Most Wanted” two years in a row.
Moreover, the case raises salient questions – for starters: What about the hospital’s recruitment policies, background checks, and management procedures?
And why was a male nursing assistant even allowed intimate access to a female patient? Other professions, like police agencies and physicians, have noteworthy safeguards in gender protections.
The lesson? To prevent being hit by a lawsuit, do your due diligence in risk management.
Conduct a SWOT analysis of your strengths, weaknesses, opportunities and threats. Then, take the necessary proactive steps for good stewardship. Document everything for a paper trail.
You’ll sleep better. More importantly, it’s the right thing to do.
From the Coach’s Corner, here are other employer tips:
21 Quick Tips to Avoid the Dark Side of Management
How to avoid EEOC Discrimination Suits
Lessons for Education via Penn State, the Need to Hire a Real Coach
Why Companies are Falling into the Management Lawsuit Trap
BP Crisis Management – How to Avoid PR Misfires
“The first step in the risk management process is to acknowledge the reality of risk. Denial is a common tactic that substitutes deliberate ignorance for thoughtful planning.”
-Charles Tremper
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Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
Aside from Privacy, Security Issues — Facebook is a Threat 2 Ways
Facebook is well-known for its privacy and security issues. I’ve written multiple columns about social media and how it can harm businesses, especially when employees are not trained about using it on your company’s computers.
For example: 3 Studies – New Concerns about Internet Security and 5 Safety Measures to Thwart Mounting Social-Network Attacks.
But my sense after reading two articles in AdvertisingAge Magazine – a must-read for the advertising profession – is that Facebook raises the specter of two other ramifications for business: Facebook is becoming more of a threat in marketing.
Consider two headlines: What Happens When Facebook Trumps Your Brand Site?” and “The Top Five Brands on Facebook.”
First, so what happens when Facebook becomes more relevant than your Web site? “…the social network has quietly become something else: the biggest relationship-marketing provider for many brands,” writes Jack Neff.
He points out 37 Facebook pages have a million or more fans even though most Web sites have difficulty attracting 100,000 visitors. That means, of course, Facebook is outperforming their sites.
For example, Mr. Neff cites Coca-Cola with 10.7 million Facebook fans, but its Web site’s unique visitors dwindled to 242,000 unique visitors in July, 2010.
The danger is that all these people are identified with social media, which is owned by Facebook. Brands will have to pay to advertise on their own Facebook pages, and Facebook collects all the revenue.
Starbucks may be one of the rare companies to have a strong Facebook and Web site presence.
Mr. Neff provides other interesting insights – for the full story, see the article here.
Also, at AdvertisingAge, Matt Carmichael writes about the top five brands Facebook. But it appears their top ranking is for dubious reasons.
“According to new research from ExactTarget and CoTweet, it’s pretty simple: coupons and free stuff,” he explains.
He reports the top five: Oreo, Walmart, Victoria’s Secret, iTunes and Dove.
See his article here.
So, it’s imperative protect your brand by not cannibalizing it to the extent that it has less power than Facebook. Use the necessary due diligence in strategies to use Facebook to drive traffic to your Web site. Or, you’ll pay the price.
From the Coach’s Corner, here are related columns on promoting your Web site:
Facebook Users Favor Online News Sites.
Web Publishers: Are You Optimized for Bing?
Startup Toolkit – How to Make a Hit on the Internet
5 Tips If Your Web Site’s Traffic Slows in Summer Months
Forex Trading: Prevent Tragedy with Due Diligence
Forex trading is a daily marketplace in the trillions of dollars. But recent publicized scandals serve as a reminder about due diligence.
In Canada, the B.C. Securities Commission accused Horizon FX Investments of illegally soliciting $34 million from 1,000 investors, according to The Vancouver Sun on Nov. 10, 2009.
Ten days later, The Wall Street Journal reported a new managing director was appointed to lead Chinese conglomerate Citi Pacific Ltd. to replace a predecessor in the wake of huge losses in a Forex scandal.
That’s not all. Enter the key words, “investor scandal,” on any search engine and you will find up to 16 million references.
So, I decided to focus on due diligence after receiving and answering the following question:
“Q: Hey Coach, I’m a business owner and fairly new to investing in the stock market. I keep hearing about Forex trading, but I don’t understand what the buzz is about. Can you help?”
My response:
Especially since the Digital Age began to really take root, we’ve been seeing a whole of innovations, changes and advances – all thanks to globalization and technology. My earliest recollection is when I was a journalist in the 1970s long before the Internet.
Many have been great developments. Ask George Soros, a remarkable story, who has made mega bucks as a speculator.
But the scandals show the downside from not practicing due diligence.
Forex trading is exciting and fast-growing, and it can really get your juices flowing. I think it’s a rather sexy subject because Forex success necessitates staying abreast on a broad range of current topics including economic trends and political developments.
One of my business-professor buddies has taught it as a college-level class, which means it is a complex subject and I’ll only attempt giving you a basic primer.
Not to oversimplify, Forex trading mainly refers to the foreign exchange market for international trade and investment in currencies and cash via what’s called the interbank market. Forex trading is highly specialized and it isn’t available at every bank and financial center. It’s important to only deal with reputable people and use competent Forex software.
Traders include speculators, central banks, private-sector banks, and companies. Investment strategies can include algorithmic trading using software for price, quantity or timing.
For you as a business owner, this means you have the opportunity to make money throughout the world while simply sitting in your home or office. Of course, that includes Forex trading of any currency.
If, for example, you want to start trading with a country in the European Union, a foreign exchange deal will help you buy or sell Euros.
Perhaps a bit complex for you as a novice, essentially, it’s all about convenience and flexibility to make money across the globe in trading currencies.
That includes the variety of factors influencing exchange rates, market liquidity, 24-hour trading during the week, trading volumes, geography across all borders, and the use of debt or leverage to supplement investments.
Due Diligence
Before you get excited, please note: Don’t make any rookie mistakes.
Forex trading is transacted on margins, which means high-profit potential but nonetheless it is risky. Funds in an account are less than the amounts that are controlled. It’s worth noting that currency exchange rates on an average day are not large but can be small. However, trading on margin is risky.
So do your due diligence by studying in Forex exchange courses or reading blogs. Know your broker and check authoritative sources like Forbes regarding people like Bambi – broker Bambi Holzer (http://bit.ly/8RICrN).
A great source of Forex tutorials and information are blogs, which are easily updated with current information, which you can arrange for RSS feeds to your computer.
More on due diligence later.
OK, I feel better. Now that I’ve cautioned you, Forex trading is fun because there are continuous opportunities because of the high liquidity and other factors.
Countless enthusiasts invest in managed Forex accounts. Because of the Forex-market dynamics, a managed Forex account is usually ideal for someone who doesn’t have the expertise and time to stay current.
Investors choose among such spot transactions (the spot market is the largest) or forwards, which are basically deals to buy or sell in the future for an agreed-upon price now.
Most nations allow Forex derivative trading although it is not acceptable in third-world countries. There are tier-levels of participation, which depends on the amount of money being traded. It is unlike when you trade in the stock market.
In recent years, institutional investors from pension funds to insurance companies have been a pivotal part of the growth in this decade.
Forex is highly speculative and focuses on what is anticipated in terms of movement of currency. So again, I advise caution.
Incidentally, we’ve seen hedge funds as being the well-capitalized major players.
You’ve probably heard the acronym, ETF. That stands for exchange-traded funds. Many will follow or track the trends of currencies vis-a-vis the dollar.
For example, when comparing the dollar to the Euro, an ETF can increase its value when the dollar drops vs. the Euro.
For pricing, in essence, individual investors rely on Internet market makers.
To get credit with banks in the interbank market, such Forex brokers use their own money in participating in foreign exchanges. They land the most competitive pricing – if they have good credit relationships with banks because they are then-better capitalized than their competitors.
Again, there have been many unsettling events. Scandals have resulted when predators have taken advantage of unsuspecting souls.
As in all business issues, relationships are important. This is especially true during challenging economic periods. In other words, if the marketplace is volatile, respected brokers continue to get the best deals. So, deal with a respected Forex broker.
In conclusion, that’s your Biz Coach primer. Have fun. But did I mention due diligence?
From the Coach’s Corner, for more advanced Forex reading, here’s a source that lists authoritative books: http://bit.ly/7iioPE.
But again, before buying a book or implementing strategies proposed by any authors, do your due-diligence.
