by Shimon Avish | November 01, 2013
Like with many other things in life, there is a degree of risk associated with meetings. What follows are the six main areas of risk and their consequences, and how you can decide if your organization faces these threats.

1. Duty of care lapses put employees at safety risk, expose the organization's brand, and put it at financial and legal risk. This is an area with many components, including the safety and security of meeting attendees, exposure of the brand to negative attention (think AIG and partridge hunting), financial exposure through misappropriation of funds, legal exposure resulting from employees caught in the act of bribing foreign government officials, and the lawsuits of survivors suing because, for example, their loved ones died in a fire in a hotel without sprinklers.

2. Regulatory violations ex­pose the organization to government penalties and oversight. For example, between the years 2009 and 2012, pharmaceutical companies paid penalties of close to $9 billion for improper promotion of their products. While the bulk of these fines were imposed because of off-label promotion and misbranding, illegal marketing and promotional activities (which take place at meetings) were often a component of the prosecutions. For more, see "The Rules," left.

3. Breaches in signature authority put an organization at risk when employees take it upon themselves to contractually commit to venues above their signing authority limit.

4. Fiduciary responsibility leads to missed savings oppor­tunities and the potential im­proper use of funds. This essentially is a two-pronged problem. On one hand, many organizations are missing out on significant cost savings of from 15 percent to as much as 25 percent by not having dedicated sourcing specialists aggressively negotiating their hotel contracts; on the other hand, many organizations are exposed to improper usage of funds due to inadequate processes, in-house controls and audits.

Some of the examples raised by internal audit departments over the years include the redirection of funds by meeting owners to family members, the fraudulent use of corporate and/or meeting credit cards, the acceptance of hotel rewards (e.g., flat-screen televisions) by meeting planners and ad-hoc on-site upgrades by meeting attendees.

5. Cancellation and attrition penalties incur considerable financial risk, since about 25 percent of all meetings are canceled. While working on a global account, I witnessed a number of instances where events were canceled, and it was only through the application of protective cancellation clauses in the hotel addendum that the company managed to avoid penalties of hundreds of thousands of dollars each time.

6. Inaccurate data entry inevitably leads to improper reporting to senior executives, compliance monitors and downstream security systems. I discussed this topic in more detail in a piece on strategic meeting data management in M&C's Guest Stars blog at and on my website at, but suffice to say that hundreds of data errors can be entered into your data collection system without proper oversight.

Shimon Avish is the president of Shimon Avish Consulting LLC (, specializing in strategic meetings management.