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☛ Understanding and learning about Risk Management 8-1-18

UNDERSTANDING AND LEARNING ABOUT RISK MANAGEMENT

 

By Richard E. “Rick” Dennis
Certified Protection Professional
Aug. 1, 2018

 

You’re on the board of a horse association, or the owner of a large horse facility, and a major problem erupts when a situation has risen that could compromise the financial stability of your organization or horse facility and maybe even you personally. Your first instinct? “Call a lawyer!”

 

However, there is another answer called “Risk Management.” Managing your “risk” is what you can do before that major problem erupts. A Risk Management program can save you a lot of money in legal fees so perhaps you should consider counseling with a Risk professional first.

 

Also, a Risk Management program may also have kept you out of the dispute in the first place, by implementing “common-sense and  risk-avoidance practices in your business or personal dealings to heighten your awareness of “Risks in the horse business.”

 

DEFINING RISK MANAGEMENT:

Risk management is the identification, evaluation and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives), followed by coordinated and economical application of resources to minimize, monitor and control the probability or impact of unfortunate events or to maximize the realization of opportunities.

 

Risks can come from various sources including uncertainty in financial markets; threats from project failures (at any phase in design, development, production or sustainment life-cycles); legal liabilities; credit risk; accidents; natural causes and disasters; deliberate attack from an adversary (personal protection) or events of uncertain or unpredictable root-cause. There are two types of events i.e. negative events can be classified as risks while positive events are classified as opportunities.

 

Several risk management standards have been developed, including the Project Management Institute, the National Institute of Standards and Technology, actuarial societies, and ISO standards [2][3] methods, definitions and goals which vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments or public health and safety.

 

Strategies to manage threats (uncertainties with negative consequences) typically include identifying the threat, avoiding the threat, reducing the negative effect or probability of the threat and implementing counter-measures which are maintained on a regular basis to prevent future occurrences.

 

OVERVIEW OF RISK MANAGEMENT:

Risk Management is the continuing process to identify, analyze, evaluate and treat loss exposures and monitor risk control and financial resources to mitigate the adverse effects of loss.

 

 

WHO USES RISK MANAGEMENT SERVICES?

There’s a litany of businesses and government agencies that use Risk Management  and Risk Analyst services on a daily basis:

 

  1. Insurance companies: to minimize accidents, loss payouts and maximize loss prevention.

2. Financial institutions: including banks, investment firms, Wall Street and the U.S. Government.

3. The Federal Government: the United States Department of Defense (DOD), including all military applications, as well as: DEA, IRS, FBI, CIA, etc.

4. Law enforcement agencies: to combat crime and dismantle criminal enterprises.

5. The petro-chemical industry: including oil and gas Drilling, production, and refining.

6. The telecommunications industry: including computing.

7. The U.S. mining industries.

8. The U.S. agriculture industry.

9. The U.S. aviation industry.

10. The U.S. marine industry: maritime shipping.

 

 

WHO DOES NOT USE RISK MANAGEMENT SERVICES, EXCEPT ON A VERY LIMITED BASIS?

 

One industry not yet fully indoctrinated and inclined to use Risk Management services is the U.S. equine (horse) industry. Conventionally, when conflicts arise between individuals in the horse industry, the first thing that comes to mind is the injured party utilizes a law firm and a lawyer to settle disputes and provide a legal remedy.

 

In the end, after a very expensive litigation process, the parties usually end up in an “out-of-court” settlement, which may or may not be exactly what the Plaintiff desired. However, there’s another “over-looked option” to the injured party that’s usually never considered and that is: law enforcement processes or criminal arrest and prosecution.

 

During my tenure in the horse industry, I’ve been involved in a litany of legal disputes from a Risk Management and Analyst perspective, where my Risk Analysis expertise has been utilized to offer clients a list of alternative options, i.e. civil, criminal or both, providing referrals, after reviewing the client-provided documents. Instead of a client being limited to just one legal option, e.g., the civil litigation option, I also provide the client with the criminal review option when it’s warranted and applicable. However, only a law enforcement agency or an attorney at law can approve and apply my suggested areas for professional review.

 

However, and for the record, most civil lawyers, adamantly detest hearing the word “law enforcement” used in the same context as “civil litigation,” simply due to the fact that a criminal court can usually perform the function as a criminal prosecutor to convict and imprison the violator, as well as the court acting as a civil lawyer for a recovery of assets for the victim. This one-stop shopping is “free” to the victim and reduces or eliminates the vast amounts of wealth that a civil attorney can accumulate during a lengthy litigation process.

 

Notwithstanding, various criminal applications can be used in the civil litigation process. One of my favorites is the Racketeer Influenced and Corrupt Organizations Act called (RICO). The risks and dangers of the RICO act to the criminal violator is that it carries criminal fines and penalties, civil fines and penalties, as well as asset recover for the victim. However, not all criminal cases are eligible for the RICO Act application. Actually, when I was in Drug Enforcement, this single law is where I honed my skills as a Risk Analyst and learned the most while writing RICO conspiracies for the U.S. Attorney’s Office in New Orleans, Louisiana.

 

Under the guidance of the United States Department of Justice, the Federal Bureau of Investigation and the Internal Revenue Service – Enforcement Division, I learned a myriad of ways to combat crime, protect and recover assets and criminally charge and prosecute criminal violators. Vice-Versa, I’ve transposed those much-needed and learned lessons from my prosecutorial refinements, into the private security sector in performing Risk Management and Risk Analysis services – and at a high success ratio, I might add.

 

 

THE REINCARNATION OF THE WILD WEST:

 

Today, the American Horse Industry seems to be nothing more than a reincarnation of the old “Wild West”, which is directly due to the fact it’s a virtually unregulated industry. Essentially, the only protection members and participants have against roving pilfers and con artists infiltrating the industry is by relying on law enforcement. However, this false security is usually and unfortunately realized as a reactionary approach, meaning after a crime is committed rather than a pro-action approach to prevent crime before it happens. If your reliance is on the 501 (C) (3) nonprofits, then your assurances are certainly misguided – unless the violator is a horse abuser.

 

It’s been observed through time and memory, that nonprofits seem to have no interest in preventing criminals and those with immoral character from entering the industry, even after it’s been proven in court of his or her criminal activity while in the industry. Notwithstanding, the violator usually continues their criminal activity on another victim after being relinquished from a previous violation by an out-of-court settlement. However, there are ways the American Horse enthusiasts can protect themselves and their family members from the “pitfalls” associated with the American horse industry, i.e.:

 

  1. In my book, “THE AMERICAN HORSE INDUSTRY, Avoiding the Pitfalls” I offer real-life solutions to these inherent risks and problems associated with the American Horse Industry. In fact, this book was written entirely from my expertise as a Risk Manager, analyst and former law enforcement professional, as well as my personal knowledge of the con artists I’ve observed at work, who have caused a litany of problems for their unsuspecting victims in the horse industry. One of my favorite cliches that I use in my book is, Trust But Verify.”

 

  1. Whenever you engage in a training, boarding or showing agreement with a boarding facility or horse trainer, have an attorney at law draw up the document in order to cover all the bases ahead of time. If the individual or facility won’t sign a contract agreement, find someone else.

 

  1. In the event you become involved in any circumstance where a law enforcement agency can be used to prosecute an individual for an applicable law violation, i.e. padded billing, mail fraud, wire fraud, conversion, (converting your personal property to his or her use unlawfully, etc.), one should use law enforcement instead of civil litigation as a “first-line-defense” for a remedy. When a person is arrested, prosecuted for a crime and possibly imprisoned and they’re looking at you from behind a set of prison bars, it makes them think twice about pulling another stunt like that on another unsuspecting victim.

 

Until the industry takes a proactive stance of prosecuting frauds, con artists and other criminal violators in the industry and punishing them for their crime, I’m afraid we’ll just see the “same ole’, same ole’.”

 

“Until Next Time, Keep ‘Em Between The Bridle!”

 

WIND RIVER COMPANY LLC
Richard E. “Rick” Dennis (CPP)
Managing Member
Professional Reined Cow Horse Trainer
Quarter Horse Breeder and Enthusiast
Office/Mobile: (985) 630-3500
Email: windrivecompany.rd@gmail.com
Web Site: http://www.richardedennis.net

 

Wind River Security, Personal Protection, Risk Management (Analysis)
Wind River Employee Drug and Alcohol Testing Consortium Services
Wind River Stock Horses – Breeding, Training, Exhibition, and Sales

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6 Comments

  1. I work for an insurance company and we do have a Risk Department. At this day and age I would think everyone uses Risk Management services. Your article is very accurate.

    Jim

  2. Rick,
    I see you are giving another lesson in Risk Management’s ability to prevent problems before they happen. Exxon sure used your excellent services, opinions and concepts for over 20 years. I can attest to that. It was pleasure working with you. Glad to see you’re doing very well.
    Charlie

  3. I really enjoyed your article Thanks for sharing your knowledge.
    I still can’t believe the NCHA allowed the Dufurrena’s to switch the names on the horses so they could show Talk about fraud, with a capital F.
    Marilyn

  4. This article should be required reading for all 501 (c) 3 nonprofits. The fiasco going on down at the NCHA with the Dufurrena’s is all the justification they need. I wonder what idiot approved the transfer of those horses to Shona. Decisions like this are why the NCHA is collapsing and has such a horrible reputation for corruption. Do as we say, not as we do!
    Celeste

  5. I just read your article on Risk Analysis. Good one!! Maybe Glory should send it to the NCHA before they go to jail with Dufurrena. LOL Best Wishes!
    Becky

  6. the next time you’re involved in a business dispute and you’d like to save yourself a lot of money in legal fees, perhaps you should consider counseling with a Risk professional first!

    A Risk Management program may also have kept you out of the dispute in the first place by implementing common sense Risk Avoidance practices in your business or personal dealings to heighten your awareness of Risks in the horse business.
    Rick

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