In modern business life, companies experience a variety of risks of whatever nature. Besides the classical objective to reach economic prosperity and profitability, risks have be treated in a way that the firm’s existence is endangered at no point in time.
Headline-grabbing business crises of US-American, but also of German businesses lead to an increase of legally required due diligence of management and supervisory board.
In 1998, the German legislator passed the Corporate Sector Supervision and Transparency Act (KonTraG), which dictates the installation of a system to detect risks that endanger a corporation’s existence. The legislator’s central idea was to improve the awareness of risks within firms. Additionally, the intention of the KonTraG was to be a signal to other types of company. Section 91 Article 2 of the stock corporation act explains that a firm ‚has to take appropriate measures, especially to install a monitoring system, to detect developments, which endanger the corporation’s existence, duly’. The compliance of the management’s duty is to be monitored by the governing body and to be examined on by the annual auditor.
Morison Köln deals with this sort of systems. We would also enjoy to assist you with the installation of an individual risks detecting system of whatever structure and size your business is.