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By Shimon Avish Consulting LLC / A Strategic Meetings Management Consultancy

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How Does Strategic Meetings Risk Management Impact Your Meetings Policy?

July 24, 2013 by Shimon Avish

Compliance sections in meetings policies have expanded beyond the use of certain suppliers or approval processes, to include language that mitigates strategic risk.

 

In order to mitigate the risks associated with meetings & events, a meetings policy must address compliance to policy, suppliers, and processes, as well as compliance to strategic meeting & event risks, as shown below, and as discussed in more detail in one of my recent articles:

  • Duty of Care Lapses – which put employees at safety risk, expose the organization’s brand, and put it at financial and legal risk.
  • Regulatory Violations – which expose an organization to government penalties and oversight.
  • Signature Authority Breaches – which put an organization at risk when employees contractually commit to venues above their signing authority limit.
  • Fiduciary Breaches – which lead to missed savings opportunities and potential improper usage of funds.
  • Cancellation and Attrition Penalties – which lead to considerable financial risk, since 10-25% of all meetings are cancelled.
  • Inaccurate Data Entry – which leads to improper reporting to senior executives, compliance monitors, and downstream security systems.

 

For our purposes, strategic risks are at the SMM program level, while tactical risks, such as fires, terrorist attacks, medical emergencies, etc., are at the event level. An excellent resource on event level risks is Debi Scholar’s recent book, Crisis Management Handbook: A Quick Reference Guide for Meeting Planners, 2013. The rest of this article is concerned with strategic risks in meetings & events, and will provide samples of policy language to address these strategic risks.

 

Below I offer basic policy language across the various risk categories. The suggestions I offer are just a starting point, and you should include/exclude items and modify the language to match your corporate culture.

 

Duty of Care Lapses – Safety/Security and Brand Protection

Late Night Arrivals

  • Any meeting attendees arriving back at their home airport after 11pm must arrange for a taxi or car service to transport them home. This implies that an employee should arrange for taxi or car service in both directions if they arrive at their home airport after 11pm. In no case shall an employee drive themselves home after 11pm.

 

Alcohol Consumption at Meetings and Events

  • Employees should be discouraged from drinking to excess at corporate events, and should be encouraged to act responsibly and to control their own behavior.
  • Employees should be discouraged from consuming alcohol if they are on medication.
  • Meeting owners should not allow alcohol to be served during water, snow, or transportation activities.

See also, Alcohol Risk Management.

 

Limitations on Event Activities

  • Meeting owners should be discouraged from contracting for dangerous activities that require employees to sign liability waivers, such as, fire walking, paragliding, parachuting, and arrow breaking.
  • Meeting owners should also avoid activities that imply luxury, such as pheasant hunts, yachting, etc.

 

Meeting Optics

  • Meeting owners should avoid booking meetings and events in resorts or luxury locations, or in properties with resort or casino in their names.

 

Data and Intellectual Property Protection

  • Meeting owners should have their planners check whether direct competitors will be meeting in the same venue at the same time, and should not book their meeting in that venue if yes.
  • Additionally, language should be added to the hotel contract addendum indicating the property’s acknowledgement of the sensitive nature of the company’s program, and representing and warranting that it has not booked any function, meeting, or program at the hotel, nor rented meeting space to any company identified by the company as a competitor.
  • Door monitors should check the identification badges of attendees at each corporate event held in a public location.
  • Sensitive documents containing intellectual property should never be left unattended, and after the event should be transported home or destroyed onsite in a confetti shredder.
  • Meeting owners should have their planners confirm that all guest rooms have in-room safes, and hotels without in-room safes should not be booked.
  • Meeting attendees should be warned to lock their computers and sensitive documents in their room safes when leaving their rooms.
  • Meeting attendee’s computers should not be left unattended in meeting rooms, unless they are locked to a stationary object with a steel cable and password protection is activated.
  • Meeting owners should have their planners confirm that all guest rooms have hard-wired smoke detectors, carbon monoxide detectors, and sprinklers in each guest and meeting room. Hotels without these fire safety measures should not be booked.

 

Fiduciary Breaches – Negotiated Savings and Misappropriation of Funds

  • Every meeting over [10 attendees or $10,000] must be registered in the corporate meetings technology tool, which can be found here [add hyperlink], so that our [internal or external] sourcing specialist can negotiate the contract on your behalf.
  • Hotel reward points and offers of merchandise (trips, TVs, etc.,) cannot be accepted by meeting owners or internal/external meeting planners. The meeting planner should make all efforts to monetize the proffered points or merchandise and use them to reduce the cost of the event.

 

Signature Authority Breaches

  • Meeting owners must follow corporate guidelines, and are only authorized to sign up to their approved signature authority amounts. If your signature authority amount is insufficient to book an event, you must have someone with appropriate signature authority execute the contract.

 

Cancellation & Attrition Penalties

For a more detailed discussion, see my article on 37 Ways to Mitigate Risk in Your Corporate Meetings & Events Program.

 

  • Our corporate [internal or external] sourcing specialist must negotiate the contract on your behalf.
  • The following hotel addendum cancellation language must be used as a starting point in all negotiations with hotels:
Sleeping Rooms – Duration Prior to Operation Cancellation Penalty
271 + Days No Cancellation Fee Imposed
270-180 Days 25% of Anticipated Net Profit Less Any Sleeping Rooms Resold
179-90 Days 50% of Anticipated Net Profit Less Any Sleeping Rooms Resold
89-31 Days 70% of Anticipated Net Profit Less Any Sleeping Rooms Resold
30 Days or Less 80% of Anticipated Net Profit Less Any Sleeping Rooms Resold

“Net Profit” is defined as up to 70% of estimated total sleeping room revenue (excluding tax)

Food and Beverage – Duration Prior to Operation Cancellation Penalty
60-20 Days Prior to Event 80% Can be Cancelled at No Cost
20 Days or Less 20% Can be Cancelled at No Cost

“Net Profit” is defined as up to 30% of estimated total food & beverage revenue (excluding tax, gratuity, and service fees)

 

  • The following hotel addendum attrition language must be used as a starting point in all negotiations with hotels:
Sleeping Rooms and Food & Beverage – Duration Prior to Operation Attrition Guidelines
Date of signature of addendum up to Departure Date 20% of the contracted sleeping room block and 20% of estimated total Food and Beverage charges maybe cancelled without penalty
  • For any sleeping room nights over and above these allowances, the client will pay one (1) night’s net profit for each sleeping room, to be paid after the program has completed.
  • The hotel agrees that no attrition will be charged, when on any night within the contracted dates all of the hotel’s available sleeping rooms, exclusive of the committed room block, are sold.

 

 

Regulatory Beaches – Foreign Corrupt Practices Act and UK Bribery Act

For general observations on compliance to regulations, see The Five Essential Elements of a Corporate Compliance Program.

 

 

  • Meeting owners and planners may not offer payment, promise to pay, or provide authorization of the payment of any money, or offer, gift, promise to give, or provide authorization of the giving of anything of value to any foreign official.
  • Legitimate and reasonable travel & entertainment expenses may be offered to foreign officials as long as they are valid expenditures made in connection with “the promotion, demonstration, or explanation” of an organization’s products or services.
  • Cash payments to foreign officials are not acceptable, regardless of local customs.
  • Gifts are allowed, however, they must be (1) allowed under local law (2) given in a transparent manner (3) given to reflect esteem or gratitude, and (4) tracked in our [name] system [add hyperlink to system].

 

Please feel free to cut and paste the draft language provided here into your corporate meetings policy, and to distribute this article by email, LinkedIn or Twitter to your friends and colleagues.

 

Join me in the comments area and share your thoughts on this important topic, especially if you want to propose additional policy language.

 

Also, submit the registration form in the right hand column at the top to receive future articles by email.

 

Thanks for joining me!

 

 

See the other posts in this series:

 

Does Your Company Conduct Meetings? If Yes, Then Your Employees, Brand, and Finances are at Risk

Strategic Meetings Data Management…Boring!

37 Ways to Mitigate Risk in Your Corporate Meetings & Events Program

26 More Ways to Mitigate Risk in Your Corporate Meetings & Events Program

 

The information in this article should not be construed as legal advice or legal opinion on specific facts. This article is not intended as a definitive statement on the subject addressed. Rather, it is intended to serve as a tool providing practical advice and references for readers.

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Filed Under: Corporate Blog Tagged With: Bribery Act, Cancellation and Attrition, compliance regulations, corporate compliance program, Corporate Meetings, Duty of Care, Employee Safety, Financial Industry Regulatory Authority, Foreign Corrupt Practices Act, Meeting Management, Meetings And Events, Meetings Risk, Mitigate Risk, regulatory compliance management, SMM, strategic meetings management

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