2010 Top Ten Risks

CFO magazine recently published its top ten list of risks for financial executives and businesses in 2010.   At the top of the list is strategic change management.   Firms who understand how to take full advantage of the opportunities presented by the recent financial crisis will prosper.  Those who cannot readily translate their vision into reality will suffer greatly.  Also on the list is a renewed emphasis on shared services.  With major change on the horizon, companies must create a resilient financial infrastructure that can accommodate new businesses quickly.  Here are the top ten risks for 2010.

1. Strategic change management. The upheaval of the past year and the desire to seize opportunities during the recovery will make for a lot of changes, including mergers, acquisitions, and divestitures. These shifts leave a lot of room for controls to fall through the cracks and can create new liabilities.

2. Capacity. Faced with uncertain demand, companies risk both over- and understaffing. Timing capital expenditures, such as new facilities or equipment, will also pose a challenge.

3. Incentive plans. Compensation is under extreme scrutiny in the wake of the recession and could pose a risk for public companies.

4. Human resources. Layoffs have left many companies with skill gaps and possible holes in their compliance structures.

5. Fraud. Widely thought to pick up (or be revealed) in down times, fraud can be easier to commit at companies that are short-staffed and under pressure, which would describe most businesses today.

6. Innovation/R&D. Companies that have cut back in this area during the downturn risk falling behind their competitors.

7. Third-party relationships. The collapse of Lehman Brothers opened CFOs' eyes to just how careful and far-reaching they need to be in evaluating third parties.

8. Shared services. Under pressure to cut costs, finance executives are exploring new locations for their back-office functions. These changes can affect companies' control structures and processes.

9. Inflation/Deflation. Currency risk remains an open question for 2010.

10. Tax management. Recession-scarred states are looking to raise funds through new taxes and stricter enforcement of existing tax laws.

Wheelhouse Advisors can assist your company with leading solutions to these risks.  For more information, visit www.WheelhouseAdvisors.com.