Defensive Structuring to Protect Against Risk

Any business involves some element of risk. As such, business proprietors must seek to apply effective defensive structuring solutions. In short, defensive structuring is about structuring your personal and business affairs to safeguard against the inherent risks associated with your business. Clearly, structuring your business defensively is not a sign of pessimism, but is in fact, a sound business practice. Individuals have often lost everything, including their family home, due to having inappropriate or ineffective defensive structuring. At Clout Advisory, we are leading specialists in restructuring, turnaround and insolvency. So, given our extensive exposure to these types of situations, we understand the risks and the appropriate structures needed to mitigate all significant risk areas. We do this by developing a defensive structuring plan explicitly tailored to your personal and business circumstances.

As a guide, together with appropriate risk management, the defensive structuring plan may incorporate any of the following:

  • Incorporate the business under a company structure
  • Ensuring that the director is not the person who owns the family assets. We can apply other structures to protect personal assets which are legitimate and have been tested in the courts
  • Placing vital operating assets in a separate company or trust
  • Where superannuation laws allow, we may utilise self-managed superannuation funds
  • Contracted borrowings between the company and the taking of security from the company.

Risk Management

Risk management is an ongoing process of identifying, evaluating, and mitigating risk areas that threaten your organisation and its people, assets, and earnings. Generally, these threats stem from the following key risk categories:

  • Business continuity, e.g. profitability or cash flow crisis
  • Financial, e.g. market or industry volatility
  • Regulatory, e.g. adverse audit findings or key legislation changes
  • Technology, e.g. loss or theft of equipment or data
  • Human resources, e.g. loss of key personnel
  • Stakeholder, e.g. change in consumer trends and environmental considerations
  • Governance, e.g. fraud, conflicts of interest, and breaches of statutory obligations

Our risk management professionals can assist you in ensuring that your organisation is adequately managing its risk using numerous strategies. Firstly, we identify the underlying enterprise and operational risks. Secondly, we evaluate the effectiveness of any current risk control processes. This enables us to develop and implement a tailored risk management framework and effective risk control policies and procedures. Next, we develop risk monitoring and compliance tools. These assist management in the ongoing control of the identified enterprise and operational risks. Lastly, we provide management with guidance and advice throughout the process and beyond.

 

Process and Internal Control Reviews

A process and internal control review is designed to expose vulnerabilities in a company’s internal control environment and identifies procedures that can be strengthened. Rest assured, strong internal controls guard a company against financial loss and help the organisation maintain reliable financial reporting. This process will ultimately result in a more efficient and secure operation. Basically, it makes sense to have your systems reviewed for procedural weaknesses and blind spots. We have the expertise and the training to review your procedures. In fact, we can review your entire business and design a procedural manual to suit your business model.

 

Corporate Governance

Corporate Governance is a vital system that provides appropriate policies, processes and rules that move and control a business’s behaviour. Part of this is defining and managing the relationship between the shareholders, management and all key stakeholders. Essentially, even a one-man company requires it, as do more prominent organisations, including registered clubs and not-for-profits.  Much of what is required is contained and prescribed in the Corporations Act.

At Clout Advisory, we promote and encourage sound corporate governance. Our professionals have the expertise to guide and advise our clients through the complexity of the compliance environment.

 

Assignments in this area include:

 

  • Reviewing and evaluating the effectiveness of the organisation’s governance and risk frameworks
  • Reviewing the composition of the Board of Directors to ensure that their respective skills and experience is consistent with the requirements of the organisation
  • Develop a corporate governance and risk framework to protect the organisation’s integrity
  • Advise the Board on best practice in governance, risk and compliance procedures along with appropriate protocols.

Ready to Minimise Your Risk? Call our Expert Team today on (02) 6650 5888 to discuss our complete range of Governance, Risk & Compliance Services. Alternatively, click here to enquire online.

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