Managing risk with online solutions.
 
Alison Bourey,  ABM Management Company , atbourey@earthlink.net  

Presentation at the SCIP St. Louis chapter meeting by Eric Lutsch, Lexis-Nexis.  


In our volatile economy, the stakes are high for choosing wisely when venturing into agreements with vendors, customers, and potential partners.  How does a company effectively conduct due diligence on an alliance to ensure that the financials are good, that the leadership is sound, or that high-stakes lawsuits are not lurking in the background?  Risk management is the use of information to proactively or retroactively reduce the loss of a company, entity or an individual.  At the  St. Louis Chapter meeting, Eric presented five steps to minimize risk:
 
Proactive:

• Stay informed and in compliance.
• Optimize your customer base. 
• Know your customers, vendors, employees and partners.

Retroactive:

• Retroactive:
• Enhance efficiency and effectiveness of investigations.
• Increase the effectiveness of loss recovery.

 
Public sources  

Both free and proprietary sources are available to uncover the information that helps mange risk.  Some of the information is public (e.g. professionals licenses, criminal records, and census information). More information is publicly available, usually at additional cost (credit header information such as FLASPD – First name, Last Name, Address, Social Security, Phone, Date of Birth).  Proprietary sources amass and make the public information more accessible than if one had to assemble it all on one’s own.

The SEC filings have a wealth of information on publicly traded companies and can be accessed for free through Edgar (www.sec.gov). Real Estate Public Records (www.real-estate-public-records.com) will provide information on property your competition is acquiring or selling. For tracking product launches, try the Patent and Trademark Office (www.pto.gov) for the patent and trademark information that may need to be filed in advance of the news hitting the press. Remember to look at what is being said about your own company.   Take a look at MarkMonitor (www.markmonitor.com).

Don’t overlook the Better Business Bureau as a source of information.  The Directory of Corporate Affiliations can help you track the “family tree” of corporations at www.corporateaffiliations.com. Check news, too, for information about products, newly appointed executives, etc.
 
 
State public sources  

Good public sources for privately held companies are available through a state’s Secretary of State or Department of Incorporation.  Here you can verify that the company exists, check liens, incorporations, etc.  This information is available both on web sites and through 800 numbers. 
 
Secretary of State Offices can help track essential information, including Individual/Business Validation & Verification and  bankruptcy filings.  Before investing significantly in a working relationship it may be worth the investment to use fee sources where one pays for the expertise such as National Fraud Center or Pinkerton. You receive not only the information but also its interpretation by experts.
 
There are difficulties.  Nothing gets around the fact that each state has differences that vary greatly in Freedom of Information Act standards.  Employee background checks are made difficult by the lack of a national criminal reporting system, and even state systems often have many non-reporting counties.
 
Want more help?  Try your local librarian, local college librarian or information vendor.  You may need to pay your vendor but they can customize to just your need.
 

Background:  

Alison Bourey is director of ABM Management Company. She has  developed Market Intelligence  for large public Fortune 500 companies such as Express Scripts and Solutia.  Previously, Alison led market intelligence and market research at Saint Louis University Health Science Center.  She is the Chapter Coordinator for the St. Louis Chapter of the SCIP and has served on the faculties of Drake University, Washington University, University of Wisconsin – Lacrosse and Coastal Carolina College.  Her Sociology degrees include B.A. from Mt. Holyoke College, M.A. from Teachers College, Columbia University and Ph.D. from The Florida State University.
 
Eric Lutsch of Lexis-Nexis presented this program.   Eric has a BA from The Ohio State University, and a JD from Capital University Law School in Columbus, Ohio.  He has been with Lexis-Nexis for almost six years, and has worked as a Risk Management Consultant for the last three years.