Checklist for Managing Risk in International Operations

‍Explore governance practices for international operations and implement risk mitigation using technology.

Governance, compliance, and operational risks are unavoidable for any business organization and tend to multiply as companies expand across borders. While avoiding risks entirely is rarely possible, keeping them under control is essential for scaling business operations, ensuring continuity, and maintaining good standing with regulators and stakeholders.

For more insights into building effective compliance frameworks, check out The 4 Pillars of an Effective ComplianceProgram.

Among risk management practices, governance has long been the backbone of risk mitigation, aligning the organization with its strategic objectives. Below, we examine key risks for global companies, best governance practices, and how technology can be instrumental in managing risk in international operations.

Key Risks in International Operations

Building a risk management strategy starts with a comprehensive risk assessment, identifying all risk areas across the sectors and jurisdictions where the company operates.

To navigate these challenges effectively, consider strategies outlined in Overcoming the 3 Most Feared CompliancePitfalls in Global Operations.

Global businesses typically encounter the following key pitfalls and risk areas:

1. Compromised Decision-Making Due to Poor Data Quality
   Weak data governance leads to inaccurate analysis, potentially resulting in subpar decision-making that affects critical outcomes.
2. Ineffective Governance
   Insufficient governance structures fail to translate risk management strategies into actionable processes, creating gaps and inefficiencies.
3. Failure to Adhere to Legislation
   Non-compliance with multi-jurisdictional requirements poses one of the greatest risks for global organizations.
4. Regulatory Divergence
   Complex and conflicting international, federal, and state regulations make compliance management a significant challenge.
5. Data Privacy and Security Breaches
   Data breaches and non-compliance with global privacy laws expose companies to fines, reputational harm, and financial loss.
6. Transfer Pricing Complexity
   Poorly managed intercompany agreements can result in double taxation and regulatory penalties.

‍

Governance Best Practices for Global Companies

Effective risk mitigation requires implementing strong governance practices for international operations. Key steps include:

1. Setting Clear Policies and Procedures
   Governance and compliance strategies must be translated into actionable policies. These policies should integrate risk management into everyday operations, going beyond a simple compliance checklist.
   Learn how technology can support these efforts by reading The Role of Technology in Enhancing CorporateCompliance.
2. Defining Roles and Responsibilities
   Clearly defined roles ensure accountability for implementing governance frameworks. Training, monitoring, and incentivizing teams are essential to align risk management practices with daily operations.
3. Creating a Single Source of Truth for Governance and Compliance
   Effective governance relies on centralized, discoverable data. A Single Source of Truth allows teams to access and understand internal controls and global compliance requirements.
4. Internal Audits and Automated Checks
   Regular audits help identify gaps, misalignments, and inefficiencies. Automating these processes with AI-powered tools allows companies to detect risky patterns and streamline operations.

Technology for International Risk Management

Technology plays a transformative role in implementing governance and compliance strategies for multinational companies. A robust tech stack should include:

1. Centralized Platforms for Governance and Compliance
   Consolidate governance and compliance data into a single, accessible platform.
2. Collaboration Tools
   Ensure seamless interaction across teams and jurisdictions to drive compliance and mitigate risks.
3. Automated Processes
   Leverage automation to handle the complexity of data points required for global compliance.
4. Compliance Task Management
   Organize processes into manageable modules for jurisdiction-specific filing and entity maintenance.
5. AI Capabilities for Efficiency
   Use AI to process large volumes of data, summarize regulations, and automate compliance work.

For more detailed guidance on managing compliance in the year ahead, explore A GC's Essential Guide for 2025.

Manage Risk in International Operations with Athennian

Expanding internationally brings new risks, but these challenges can be turned into opportunities with a proactive governance strategy. Using technology like Athennian’s entity management platform, businesses can create a Single Source of Truth for governance, streamline compliance processes, and maintain best practices for risk management.

For more information on how Athennian can support your global operations, open to see it in a demo.