Risk management is challenging enough for any business, but for companies with global operations and interests, it’s even more arduous.
The global risk landscape is always evolving, and organizations must be able to respond effectively — often at a moment’s notice — to everything from unexpected disruptions to business operations to new market opportunities.
To stay nimble, companies rely on the specialized expertise and strategic advice of global risk consultants. Here are just seven reasons why businesses hire these professionals:
1. International accounting and taxation
Global risk consultants help companies navigate the often complex maze of accounting rules and tax laws that vary by country or region.
International Financial Reporting Standards (IFRS) is one area of expertise many companies seek. For example, global risk consultants with IFRS knowledge can help U.S. businesses ensure they are meeting foreign reporting requirements.
2. Regulatory compliance
According to Executive Perspectives on Top Risks Survey for 2015, from Protiviti and North Carolina State University’s ERM Initiative, regulatory change is the top business risk executives are concerned about. (The survey included organizations based outside of the United States.)
Global risk consultants provide management with insight on how regulatory compliance changes at home and abroad may impact operations and costs, and influence business decision-making in areas ranging from hiring to investment.
3. Global supply chain
Weather and natural disasters, major equipment failures, labor strikes, acts of terrorism — these are only a few examples of risks that can significantly disrupt a global supply chain. Companies that rely on or manage global supply chains must also stay on top of legal, security, cultural and other issues that could interfere with supply chain efficiency and create liabilities for the business.
These factors, and more, drive demand for global risk consultants who understand supply chain risks and can help businesses to avoid or mitigate them.
4. International mergers and acquisitions (M&A)
Global risk consultants can be critical to the success of cross-border M&A deals. They can assist with strategy development, partner selection, due diligence and deal closure. They can also keep management apprised of regulatory and tax obligations, foreign currency dynamics, and political complexities that may impact the company’s ability to complete a transaction — or realize value from it.
Organizations that pursue M&A deals also need to factor in the human side of these transactions. In addition to meshing corporate cultures, they must consider potential turnover issues and barriers to productivity. Global risk consultants can play a vital role in guiding this type of change management, including post-merger.
5. Business intelligence
Global risk consultants with expertise in business intelligence can provide a variety of services to monitor, manage and analyze business conducted internationally. Fraud detection and customer analytics are just two examples of these types of services.
Global risk consultants with country- or region-specific knowledge can help companies entering that particular market to obtain and analyze accurate information on current conditions and the likelihood of changes. This includes information on the domestic industry and local competitors, consumers, and government regulations.
Companies have a lot to worry about from a digital perspective when they do business on the global stage. Varying, and often conflicting, data security requirements by different countries, and increased risk of data theft and fraud are just some concerns.
Cybersecurity-related services that global risk consultants can provide include strategic consulting to create an effective security plan; technical consulting to develop and maintain the technology; managed security services; and business continuity and disaster recovery.
7. Political concerns
Businesses often look to global risk consultants to help them assess the political situation of a country or region and the associated risk of doing business in the market. This expertise can be especially useful to companies ramping up operations in a new international market or conducting business in parts of the world where there is significant political instability.
As general demand for risk management consulting services increases, and business becomes only more global, the need for global risk consultants will grow, too. Skilled professionals who follow this career path will find no shortage of interesting projects.
Have you built a career in global risk consulting? Share your strategies for success in the comments below.