BUS203 Business Law Risk Management Report :
BUS203 Business Law: Risk Management Report (Part 1) and Student FAQ (Part 2)
Traditional Artworks Australia Pty Ltd (TAA) operates two related businesses in Queensland – advising and buying art on behalf of clients, as well as importing and selling traditional artworks, specialising in South American artwork. Madge and Bruce are the two directors of TAA. They are experienced in both businesses, but no longer take part in the day-to-day management of them. There are two revenue streams – advisory fees from acting as the client’s agent for art purchases and the sale of art in their showroom to clients. Madge, Bruce and two outside investors (Karan and Jin- Soo) are equal shareholders in TAA.
TAA has six permanent employees engaged under written employment contracts; three employees work as professional art advisers, and the other three employees work in the importing business. One employee from each of the businesses is a manager and they report to the directors. The employment contracts provide:
- For a wage of $80,000 per year (including super) for non-managers and
$90,000 per year (including super) for managers; and
- Employees are to work 38 ordinary hours plus reasonable additional hours.
During the pandemic, the price of art made by the indigenous peoples of Peco skyrocketed and remains in great demand by Australian customers. The price of the art varies between $5,000 and $85,000 + GST. For clients wishing to obtain professional advice on art, TAA also charges a commission calculated as a % of the art price. Art packaging and the certificates of authenticity attached to the art states that the art is a ‘Product of Peco’; TAA’s advisers also provide this advice and assurance to their clients, as otherwise there is no market value in the art. TAA’s business has survived the pandemic, but they have had issues sourcing qualified staff. Consequently, the existing employees are working between 55 and 65 hours per week, with employees taking significant periods of paid sick leave, thereby exacerbating staffing issues as the remaining employees’ hours of work increase to “take up the slack”.
Meanwhile, there is civil unrest in Peco, with the government instituting road-blocks throughout the country and controlling the movement of goods and services. At the direction of the government, the police and army are using violence to stamp out protests in the region. Hundreds of Peconians, including artists, have died in the last six months. TAA has had continuing issues with sourcing Peconian art and artists to complete the artworks.
Bruce has implemented a solution that ensures that TAA can remain profitable, pay its staff, help the Peconian people in their time of need and provide a promised dividend to shareholders. He enters an oral agreement on behalf of TAA with the government of Peco in which TAA will pay a 10% “business facilitation fee” to enable the transportation of the raw materials to make the artworks from Peco to Mexico. The local Peco business issues an invoice to TAA for the raw materials and adds a 10% “business facilitation fee”. The Peco business then pays the 10% fee to the Peco government, which is used to fund its operations. This means that the raw materials used for the art remain sourced from Peco, but the manual labour and any manufacturing processes required to complete the art (e.g., painting, weaving, and spinning) takes place in Mexico. The finished product is then imported from Mexico into Australia. This arrangement has enabled TAA to remain profitable.
This assessment is designed to cover the following modules. However, if you do find different areas of law to the Modules below that you believe you can use to identify and analyse legal risks, then please feel free to use that law.
- Module 6 (Australian Consumer Law)
- Modules 7 and 8 (Civil Liability 1 and 2)
- Module 9 (Employment Law)
- Module 10 (Ethics and Privacy)
Have a copy of the facts of this task in front of you as we go through the modules. You can get a start on the assessment now, and then progressively work on the assessment as we move through Modules 6 through to 10. Hopefully as you watch the videos and read the materials for each module, you will connect the relevant law and ethical principles to the facts of the task. This is you identifying the legal and ethical risks for this assessment.
The purpose of this section is to give you a basic understanding of risk management so you can see how risk management “fits” into our study of Business Law, particularly how the ILAC method can assist with risk management. No need to go and read about risk management theory!
Risk management is generally described as a four-step process. This assessment only covers Steps 1 (Identification) and 3 (Action).
Step 1: Identify the risk
This step involves identifying the risk and explaining why it is a risk. A risk may be considered as any issue, event, or circumstance (collectively described as ‘issue’ here) that may impact the business. A business may face various types of risks including:
- Issues that may affect the daily operations of the business (operational risk)
- Issues that may impact the financial position of the business (financial risk)
- Issues that may affect the public standing, brand, or image of the business (reputation risk)
- Issues that may affect the achievement of the business’ mission, strategy, or objectives (strategic risk)
- Issues that may represent non-compliance by the business with rules and regulations, and/or may make the business liable to a party (legal risk)
- Issues that may be contrary to ethical practice (ethical risk)
Note your job in this assessment is to cover only the legal and ethical risks that may impact the business.
Step 2: Assess the risk
Once identified, this step involves assessing the probability and consequences of the risk eventuating. This step is not covered in this assessment.
Step 3: Actions to manage the risk1
Actions then need to be taken to manage the risk. The action may be targeted at preventing the risk from occurring (risk prevention) and/or treating the risk if it does occur (risk treatment). You can think of four categories of risk management actions. You do not need to categorise your risk management actions in the assessment, but the categories may provide you with inspiration about actions for managing risk.
- Risk control (or minimisation): Reduce the probability or consequences of the risk. Some examples of risk control include staff education programs, policies and procedures, site inspections and reporting of incidents.
- Risk transfer: Shift some or all the responsibility for the risk to another party. Some examples of risk transfer include insurance (to the insurer) and clauses in contracts such as indemnities and exclusion clauses (to the other contracting party).
- Risk acceptance: Accept that there is a risk attached to the business activity that cannot be completely avoided, controlled, or transferred.
- Risk avoidance: Do not engage in the business activity that creates the risk due to the high probability and/or consequences of the risk (see step 2).
Note. You can use more than one action to manage the risk. For example, a business may accept a risk, because of the potential benefits to the business, and then take steps to transfer and/or reduce the risk.
Step 4: Evaluate the risk and risk management practices
This step evaluates Steps 1, 2, and 3 and is NOT covered in this assessment.
Risk management is a key component of business, and the responsibility (to varying degrees) of all persons involved in business. Your ability in this task to identify legal and ethical issues (or risks), analyse the risk and then devise solutions to manage the risk will be invaluable in business. Risk management is a skill that you can include on your CV – it is a hot topic, particularly in a world where we are experiencing war, supply chain issues, pandemics, sophisticated money laundering schemes, and major cyber- attacks.
As I said earlier in the teaching period, ILAC is a problem-solving tool that can be applied in a variety of business contexts. The Risk Management Report relates to Business Law because the problem-solving techniques you have developed with ILAC can be applied to risk management, in particular Risk Identification (Step 1 of the risk management process).
FIRST make a cover page with the following:
‘Risk Management Report – [insert name of business entity]’ centre justified
Then your name and word count (excluding cover page and reference list) in the bottom right-hand corner of the cover page.
For each legal or ethical risk, your risk management report should be structured as follows.
Risk: state in one sentence what the legal or ethical risk is. In an ILAC context, the risk is the Issue, except with the risk management report you state the risk and not convert it into a question with a question mark at the end of it.
Risk analysis: You then apply law or ethical principles (Law and Application in an ILAC context) to explain why there is a risk.
Risk management: This is where you describe any actions that can effectively manage the risk. See the section “what is risk management?” if you are not sure what this means. This is the one part of the report different to ILAC. Actions may be anything and can draw on research, case law and your own business experience. Critical and creative thinking can be used – you may wish to consult materials such as literature, reports, business websites, and even businesspersons for actions.
Risk: Creative Shops is engaging in unconscionable conduct
Risk analysis: Section 21 of the Australian Consumer Law (ACL) provides that a person must not, in trade or commerce, in the supply of services engage in unconscionable conduct. The conduct by Creative Shops relating to the terms of the lease agreement and signing Paul to the lease was in trade or commerce and unconscionable because:
- Creative Shops was in a superior bargaining position (s22(1)(a)). Applying Commercial Bank of Australia v Amadio, Paul was at a special disadvantage because Paul could not read or speak English which Creative Shops knew about.
- The requirement to sign the lease agreement renewal within 24 hours was not necessary (s22(1)(b)) – there was no reason for the limited time frame, and Paul may also have had trouble understanding the lease renewal because of his lack of literacy (s22(1)(c)).
- The requirement to sign within 24 hours without reason was an unfair tactic used by Creative Shops against Paul (s22(1)(d) and ACCC v Lux Distributors).
Risk management: Creative Shops may treat the risk by allowing Paul to terminate the lease without penalty or vary the lease renewal to an amount charged for similar spaces in the centre. In future, Creative Shops can manage this risk by setting up or amending company policies and procedures that can regulate employee conduct (insert reference). The policy could include lease renewals; dealing with tenants, including tenants that are at special disadvantage; and disciplinary action for unconscionable conduct. The policies and procedures should be supported by an education and training program for employees (insert reference).
- APA or Harvard for in-text citations and reference list
- Use Times New Roman 12 font and 1.5 spacing
- Follow the structure for each risk discussed in the last question (Risk, Risk analysis, Risk management).
- DO NOT include:
- An executive summary or any summary of the facts – you are just wasting word count and the assessment criteria does not award marks for you doing this
- Abbreviations (use ‘has not’ instead of ‘hasn’t’)
- Slang and informal language (‘Therefore…’ instead of ‘So…’ or ‘Well…’)
- Emotive language (do not use ‘I believe..’, ‘I feel..’ or even ‘I think..’)
- Large chunks of text in law and ethics. Your job is to identify the legal or ethical risk, analyse the risk by applying the law/ethical principles to the relevant facts of the task (which involves summarising and not copying and pasting the law) and then describing actions to manage the risk.
- Check spelling and grammar; use the spell and grammar checks available on computer.
- Be specific with your section numbers of legislation. Not just the Australian Consumer Law, but Section XX(b) of the Australian Consumer Law.
- You can use abbreviations of legislation after you have referred to the full name of the legislation. You need to let the reader know of the abbreviation when using the full name. For example, s124 of the Corporations Act 2001 (Cth) (‘CA’) and then you can use CA to refer to the legislation after that.
- Full sentences are to be used unless you are using bullet points to outline a series of arguments to support the statement before the bullet points (see an example under the question, “what is an example structure?” above).
- When beginning a sentence with a reference to a section of legislation use ‘Section…”
- When referring to a section of legislation mid-sentence use ‘s..’.
- For cases, you do not need to provide the full citation in the body of the risk management report, but you do need to provide the full citation in the Reference List. For example:
- In-text citation in risk management report: Smith v Jones
- Reference List: Smith v Jones (1986) 5 CLR 98
- Appropriate margins should be provided on each page.
- A copy of your paper should be retained for your reference.
The assessment criteria are covered in a ‘rubric’ which is in your assessment task page on Canvas. The rubric is used to mark your Risk Management Report, with five performance standards (Fail, Pass, Credit, Distinction, High Distinction) and a mark aligned with those performance standards (0-49%, 50-64%; 65-74%; 75-84%; 85%+).
The criteria are:
Identification and critical analysis of pertinent issues in a business context (45%): This criterion assesses your identification and analysis of the legal risks for this task. See “what is the structure of the risk management report?” for further details. Identification of the risk is like “Issue” in ILAC and the risk analysis is like the “Law and Application” in ILAC.
Demonstrate critical thinking to develop and evaluate appropriate solutions to business problems (20%): This is the criterion which assesses your management of the legal and ethical risks. See “what is the structure of the risk management report?” for further details.
Knowledge of relevant legislation and principles associated with social responsibility, ethical conduct and sustainable practice in a business context (15%): This criterion assesses your identification and analysis of the ethical risks for this task. See “what is the structure of the risk management report?” for further details. Identification of the risk is like “Issue” in ILAC and the risk analysis is like the “Law and Application” in ILAC, except you may be using ethical principles and/or legal principles to analyse the ethical risk.
Accuracy and presentation of written work including English expression, discipline-based vocabulary, grammar, spelling, and punctuation (10%): See the question “what are the style rules for the risk management report?” for further information. This criterion should be self-explanatory.
Referencing of sources of information used within the body of the document and in a reference list using Harvard or APA referencing style (10%): This criterion assesses the breadth and relevance of the materials you use in the risk management report, as well as the accuracy of your referencing of those materials.
I have a question that is not covered by the Assessment Task Instructions or the FAQ – what do I do?
Check out the Assessment Task 2 Q+A discussion forum in Canvas and post your question. I will get back to you within 24 hours, unless I am facing exceptional circumstances that prevent me from accessing the internet (in-flight transit, climbing Everest etc.)
Microsoft Word document please (.docx).
1,200 words plus 10% (1,320 words total). The word count EXCLUDES the Reference List and the Cover Page but includes everything else (including Headings, words in tables, figures etc.). The marker stops reading your assessment after 1,320 words. You must include the word count (excluding Reference List and Cover Page) on the Cover Page.
Be guided by the % awarded for each of the assessment criteria. This will give you a rough idea and does not mean that you must hit the exact word count suggested here!
Note that 80% of the assessment criteria relates to the word count – the content you include in the body of your report. The remaining 20% is for presentation, referencing and use of resources. The calculations below are based on 1200 words; remember you have flexibility to go to 1,320 words.
Identification and critical analysis of pertinent legal issues in a business context (45%):
This is the risk and risk analysis for the legal risks. 45/80 = 675 words.
Demonstrate critical thinking to develop and evaluate appropriate legal solutions to business problems (20%): This is the risk management sections for the legal and ethical risks. 20/80 = 300 words.
Knowledge of relevant legislation and principles associated with social responsibility, ethical conduct and sustainable practice in a business context (15%): This is the risk and risk analysis for the ethical risks. 15/80 = 225 words
Yes, you can share ideas and seek inspiration and support from your colleagues, but your final output should be your own as this is an individual assessment.
APA 7th edition or Harvard is fine to use, provided you select one of these styles and use consistently.
- Use the words’ Risk Management Report – [insert name of business entity]’ centre justified
- Your name and word count (excluding cover page and reference list) in the bottom right-hand corner of the cover page.
To apply for the renegotiation of due dates or exemption from penalties for late submission of assessment tasks, refer to section 7 of UniSC’s Assessment Procedures. For more information see Student Central.
Please contact your Course Coordinator to apply for an extension. You should include compelling evidence to support your application in your email.
This depends on the assessment criteria you are responding to. The material may be case law, legislation, as well as secondary materials such as government reports, reputable websites, government agency guidelines for business (e.g. ACCC), textbooks, journal articles, trade articles, and even businesspersons (you can reference conversations or interviews according to APA/Harvard). If the material supports you in preparing your risk management report, then please use it.
Absolutely if it supports your arguments in the risk management report and responds to the assessment criteria.
Here are some options:
- In Module 2.5 I did a video “How do I answer a legal question?”
- We have also completed many workshop exercises using ILAC;
- I have also included summary answers and full answers to workshop questions using ILAC for each module (See Summary Answers tab in each module); and
- You can ask questions about ILAC in the Assessment Task 2 discussion forum