Most entities have hundreds of different principal-agent relationships, all with varying levels of interdependence. Internal relationships include a supervisor (principal) and their employee (agent). External relationships include agents such as suppliers and insurance agencies and principals such as stockholders, banks, and communities.
Functioning entities and societies are built upon rules of law, ethics, and trust in these principal-agent interdependent relationships. As technology plays a more significant role in society, influencers through vehicles such as social media are disrupting the traditional asymmetric order.
At RISK TRANSPARENCY, we specialize in leveraging enterprise risk management approaches to help clients build value from improved awareness and management of key strategic and operational information.
PRINCIPAL-AGENT RELATIONSHIP SERVICES
We support clients in a variety of principal-agent relationships including:
-
Risk Governance - Improved transparency and mapping of the critical interdependent relationships between the entity mission, strategies, and key operational objectives with the Board of Directors, C-Suite, functional area leadership, customers, suppliers, and other key stakeholders.
-
Insurance Renewals - Improved awareness and sharing of information related to proactive risk management efforts for asset protection, quality, health and safety, environmental, cyber security, and directors and officers liability (D&O) can result in lower insurance premiums.
-
Shareholder Risk Factor Disclosures - Improved disclosures of material risk management priorities, actions, and measures can strengthen various principals (e.g., investors, Board of Directors, and regulators) confidence and trust in entity leadership and their ability to achieve stated strategies, forecasts, and plans. Refer to SEC Proposal to Modernize Disclosures of Business, Legal Proceedings, and Risk Factors Under Regulation S-K - August 8, 2019.
-
Ratings Agencies, Banks, and Financial Institutions - Enterprise wide risk management program progress and maturity levels can be shared during rating agency reviews and bank negotiations to secure financing and reduce interest expense costs.
Click our Enterprise Risk Management Offerings to learn more about templates, tools, and variable resources to create and support cross-functional teams and key data analysis.
