GB541 Unit 10 Executive Risk Briefing Example

Three Decisions and One Accepted Exposure: A Unit 10 Executive Risk Briefing for a 58-Hospital Group

[Student Name]

Purdue University Global

GB541: Strategic HR Law and Risk Management

Unit 10 Executive Risk Briefing

[Instructor Name]

[Date]

The veterinary group, its board committee and every score and cost are composite and illustrative; the laws referred to are real and described as of the course term, and the briefing is educational, not legal advice.

To: Board Risk Committee, Quillmere Veterinary Group

From: Vice President of People Operations

Subject: Employment risk, year-one treatment and three decisions

Decisions Requested

Decision 1. Approve $156,673, about $157,000, for year-one treatment of the five employment exposures that scored twelve or higher on the register.

Decision 2. End recovery of negative production balances from veterinarians' guaranteed salary, effective with the next payroll, and accept the loss of about $140,000 a year in recoveries.

Decision 3. Retire the non-compete for every role and replace it, for associate veterinarians only and where state law allows, with a client non-solicitation term.

The chief executive is also asked to sign a written acceptance of the residual risk from the applicant screening tool, described below.

The Picture in One Chart

Figure 1 places the ten exposures on a grid of likelihood against impact, each on a five-point scale. Five sit at or above the committee's threshold of twelve and are labeled: Illinois fingerprint timeclocks at 16, then negative production balances, the screening tool, non-competes and inherited I-9 forms at 12 each. The other five, from pregnancy accommodation at 9 down to pay discussion rules, pay history and drug loss handling at 6, sit below the line and are being fixed through ordinary management work. The scoring follows the likelihood-and-consequence approach of the international risk standard (International Organization for Standardization, 2018).

All five exposures above the line came with acquisitions or with software; none was a choice anyone in this room made, which is why each needs a decision now.

The Five Leading Exposures

Fingerprint timeclocks. Nine Illinois hospitals collect fingerprints from about 310 employees without the written consent Illinois law requires, and employees can sue directly. We will switch to badge clocks, collect consent in the meantime and destroy stored fingerprints, for $39,200. Claims for past collection remain possible, so the score falls from 16 to 8 rather than lower.

Negative production balances. When a veterinarian's production falls short, the shortfall has been deducted from later salary. That practice puts the overtime exemption of every veterinarian at risk. We will stop salary deductions, carry any shortfall only against future production pay and review three years of payroll, for $22,000, giving up about $140,000 a year in recoveries. The score falls from 12 to 3.

Non-competes. Every employee, including technicians and receptionists, signed a non-compete, and several of our seven states now void or limit them. We will retire them and keep client non-solicitation for associate veterinarians, for $26,600. The score falls from 12 to 2.

Inherited I-9 forms. Forms at 21 acquired hospitals have never been reviewed. A full review there and a sample elsewhere, with written correction rules, costs $25,073 and lowers the score from 12 to 4.

Screening tool. For every ten white applicants our vendor's tool moved forward, it moved forward about seven Black applicants in proportion, short of the four-fifths line regulators watch. We are removing the feature most likely driving the gap, commissioning an independent audit and reviewing results every quarter, for $43,800.

The Exposure We Are Asking You to Accept

The screening tool's residual score is 8, and it is the one exposure we are choosing to keep rather than eliminate. Turning the tool off would return screening to 58 managers who keep no records of who advanced, which would hide any disparity instead of removing it. Kaplan and Mikes (2012) argue that some risks are worth taking deliberately if they are measured and bounded; this is one. The bound is a clear trigger: if the ratio is still under 0.80 in back-to-back quarters once the changes are in place, the tool is suspended until it is validated. The chief executive's written acceptance records that the company kept this exposure knowingly and with that limit.

What This Briefing Leaves Out

The Columbus contact center closure is not on the list because notice under the federal plant closing law was given in time and the residual is low. The pregnancy accommodation failure at a Texas hospital has been resolved for the employee, and manager training is under way. The pay discussion clause and the pay history question are being removed through a handbook revision. The controlled-substance loss protocol has been issued. Each of these is tracked on the register, and none needs a board decision. Under the enterprise risk framework the committee has adopted, the board's role is oversight of the most significant risks and the appetite for them, not management of every item (Committee of Sponsoring Organizations of the Treadway Commission, 2017).

Quarterly Metrics

Timeclocks: number of Illinois hospitals still collecting biometric data, target zero by the end of the second quarter.

Production pay: number of salary deductions tied to production, target zero each month.

Non-competes: share of current employees released from covenants, target every employee released before the third-quarter meeting.

I-9 forms: error rate in the quarterly sample by region, target below five percent.

Screening tool: impact ratio by role and region each quarter, with any ratio below 0.80 reported at once.

Appendix: Slides

Slide 1. The three decisions and the written acceptance requested.

Slide 2. The risk grid with the five exposures above the threshold labeled.

Slide 3. Timeclocks and production pay: risk, treatment, cost and residual.

Slide 4. Non-competes and I-9 forms: risk, treatment, cost and residual.

Slide 5. The screening tool, the accepted residual and the suspension trigger.

Slide 6. Quarterly metrics and the date of the next report.

References

Committee of Sponsoring Organizations of the Treadway Commission. (2017). Enterprise risk management: Integrating with strategy and performance. COSO.

International Organization for Standardization. (2018). Risk management: Guidelines (ISO Standard No. 31000:2018).

Kaplan, R. S., & Mikes, A. (2012). Managing risks: A new framework. Harvard Business Review, 90(6), 48-60.