Risky Business: Strategic Meetings Management Programs Can Mitigate Risks

The turbulent regulatory environment facing many industries today, coupled with the economic downturn, should be catalysts for vigilant oversight and greater control over the risks and liabilities associated with meetings and events. Complacency with respect to risk management is a disaster waiting to happen, and any organization that does not take it seriously, or prioritize it appropriately, will suffer the consequences--sooner or later.

Strategic meetings management is an important tool to limit an organization's exposure to risk. Such initiatives serve to control four prominent areas of risk, including legal/regulatory, financial, operational and intangible. By definition, SMM concentrates on meeting and event-related processes, spend, volumes, standards and suppliers to achieve quantitative cost-savings, superior service and effective risk mitigation.

[PULL_1]By default, the framework and process of such programs should help companies avoid the inherent risks highlighted in the following examples, based on actual meetings:

• A nonprofessional planner signed a hotel event contract that did not include an indemnification clause to protect the organization in the event of a lawsuit. During the event, an attendee fell and broke his leg. The man sued the hotel and, in turn, the hotel sued the company as a result of the missing indemnification clause.
• An executive selected his client, a prominent hotel, for his company's quarterly leadership retreats and agreed to an appropriate exchange of consideration. Without initiating a request for proposals from multiple suppliers and a fair method to evaluate the responses, the transaction was deemed controlled, manipulated and concealed, according to procurement practices. This type of transaction may not be viewed as "at arm's length" and "in the normal course of business" and could be viewed as inappropriate by those who interpret Sarbanes-Oxley.
• A celebratory boating excursion was planned by a nonprofessional planner, and the required insurance rider was never obtained for the event. During the excursion, a company attendee slipped, lost consciousness and fell into the murky water and drowned. The attendee's family sued the company for significant damages, as the company insurance policy did not include boating excursions.
• A nonprofessional planner signed a contract, without the required competitor's clause, for a prominent pharmaceutical company's confidential meeting about their new, first-to-market drug. When the pharmaceutical executives arrived at the hotel meeting room, they were shocked to see their primary competitor in the adjoining room, separated only by air walls. The pharmaceutical company had to immediately postpone their meeting, causing financial and productivity disruption.
• A leader asked her executive assistant to plan an offsite team meeting. The executive assistant signed the contract without the appropriate cancellation rebooking clause. Unfortunately, the leader had to cancel the meeting. As stipulated in the contract, the company was forced to pay 100 percent of the meeting charges and had no ability to apply the payment toward the cost of future meetings at that hotel or another property in the hotel chain.

Meeting spend is increasing, risks are heightening, regulatory controls are tightening and management is expecting more from meeting leaders. The time is now to govern spend and manage risks. Be the change agent and rein in unmanaged meetings and events.