Contract Risk Playbook: Risks Hiding in Plain View

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Contract Risk Playbook: Risks Hiding in Plain View

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When Lehman Bros. declared bankruptcy in 2008, the
firm held more than 1 million outstanding contracts
in a vast multiplex web of global interactions. It had
become so diverse and sprawling that the board and
senior executives were unable to quickly produce reliable
information about its exposures.
“The challenge is that risk is a real time problem. Yet
many companies don’t have real time access to relevant
contracts — and it’s a matter of how fast they
can move to deal with these issues as they come up,”
says Bill Hewitt, CEO of Exari.
“If you look at the financial crisis, Lehman Bros.
was eventually proven to be solvent. It just took six
months to find out and by then it was too late.”
Boards and senior executives need the necessary
information to connect the dots before a major event.

The purpose of this playbook is to examine how contractual
agreements, a vital and often overlooked
corner of operations, can provide management with
the business intelligence to help reduce risks, uncover
waste, and improve performance.

 

 

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