Yang Wenbin Legal risk is a kind of business risk that may cause economic losses. It is not an isolated enterprise risk. It is integrated into various enterprise risks. Any risk of the company will eventually bring legal consequences. risk. Because legal risk affects business operations, managing legal risk becomes the responsibility of top management. At General Electric Company, Jack Welch included legal risk management in the performance appraisal of managers. This approach is generally accepted by most foreign companies and is considered a best management practice. Legal risks come from many sources; they may be caused by the company's business decisions and improper legal management, or they may be caused by the company's financial management, investment management, human resources management and other management matters. Therefore, controlling a company's legal risks is not just the responsibility of legal personnel. Managers, especially senior managers, must take the lead in managing these risks. 1. Improve the company's legal risk management system. The improvement of the company's legal risk management system requires the establishment of a specialized management organization, the design and implementation of specialized management processes, and the deployment of specialized management personnel. In the design of corporate management processes, companies should have institutionalized legal control links, including: legal risk assessment of company business decisions, legality and risk prevention assessment of company systems, review and control of company contracts, and non-litigation of legal disputes. and litigation handling, loss reduction or recovery. Scientifically and effectively design and reorganize corporate management processes, and make legal control an indispensable part of internal control. In addition to establishing a legal affairs management department, a special management organization should also establish a general counsel system. The establishment of the company's general legal advisor system is the need to improve modern company management. It focuses on prevention beforehand, control during the incident and remediation after the incident. It prevents the company's decision-makers from acting arbitrarily, effectively protects the legitimate rights and interests of investors and invested enterprises, and controls and reduces decision-making to the maximum extent. Risk, realize the true sense of the enterprise's "three chief advisors" and legal advisors to participate in the company's major decisions, democratic decision-making, scientific decision-making, further improve the company's decision-making mechanism, establish and improve the company's investment and financing, major guarantees, and risk control of major project investments system. 2. Improve the legal risk prevention awareness of middle and senior managers People are the heart of a company. Company employees at all levels will encounter various types of legal risks and have the responsibility to prevent them from happening. The company's decision-makers and management, as the core components of the company's employees, need to improve their awareness of legal risk prevention and control, strengthen their learning of basic economic and legal knowledge and corresponding professional legal knowledge, and pay attention to the professional support of legal personnel. A defect in a certain management system or a loophole in a certain contract may cause property losses of millions or tens of millions to the company. Therefore, it is necessary to strengthen the awareness of legal risk prevention and control related to the job behavior of employees at all levels. The prevention of a company's legal risks not only requires clear legal control links, but also requires the guarantee of the legal risk awareness of the company's middle and senior managers; especially when the company does not have a clear legal control link, it relies even more on the company's middle and senior managers at all levels. Senior management's awareness of legal risks. In practice, some managers will make a first judgment on a certain company contract. If they think there is no legal risk, they will not go through the judgment of legal personnel; if they think there is legal risk, they will seek the judgment of legal personnel. As a result, it is the judgments that some managers themselves think have no legal risks that lead to legal risks, because the depth of event analysis is different between non-professional judgments and professional judgments. The legal risk awareness of the company's middle and senior managers not only refers to their degree of legal understanding, but more importantly, their conscious management awareness to seek support from various professional departments, especially the legal department). Therefore, companies must pay attention to the cultivation and improvement of legal risk awareness among middle and senior managers, and actively guide and cultivate the legal awareness and management awareness of employees at all levels through management process control and comprehensive employee training plans. 3. Improve the legal risk management system. Legal risk prevention and control should improve management systems such as prior prevention, in-process control, and post-event remediation. 1. For prior prevention, we should first conduct a legal risk assessment of major business decisions, and establish a risk prevention system for professional legal personnel or legal directors to participate in the company's major decisions; establish and improve the company's contract management methods, and the signing of major contracts should start from contract negotiation, credit rating, etc. The investigation, contract drafting and review should all involve the participation and review of professional legal personnel.

2. In-process control is also an important part of legal risk prevention and control. Legal affairs should be involved and checked in major business activities, commercial negotiations, and contract performance, and a complete legal monitoring system for major business activities should be established and improved. 3. Establishing and improving litigation and arbitration case management methods is the last step to prevent legal risks and control and remediate afterwards. If handled well, losses caused by legal risks can be avoided, reduced or recovered. 4. Legal risk prevention and control should also establish a company intellectual property management system. Intellectual property management includes the management of trademarks, patents, non-patented technologies, copyrights, and business technology secrets. In the era of knowledge economy, an intellectual property with core competitiveness is closely related to the life and death of an enterprise. Therefore, preventing and controlling legal risks must not ignore the management of intellectual property. 5. Most of the company's legal risks are caused by the negligence, intentionality or quality problems of management personnel, and some legal risks may also be avoided because of professional and dedicated employees. Therefore, companies must pay attention to establishing and improving legal risk management of the company's human resources from the perspective of legal risk prevention, training, standardizing and inspecting the company's middle and senior managers, and evaluating the legal consequences of their management actions. 4. Strengthen forward-looking research on the impact of legislative adjustments on companies. Legislative adjustments will have a significant impact on the economic environment that companies rely on for survival, and may even determine the company's fate. The prerequisite for a company's economic behavior to be able to obtain normal profits is that the economic behavior is legal. Therefore, it is economic laws (including laws and regulations) that give companies room for business and determine whether a company can enter a certain investment field and to what extent. If we can do some tracking and research on legislative trends, it will provide a good reference for company investment and operations. For example, the country's stricter real estate management regulations and macro-control of the real estate market mean that only good brands and large companies will have better development opportunities, but they also have higher requirements for company operation and management. If management is not standardized, , or operate and manage according to the original model, there will be greater legal risks. 5. Legal disputes should be handled in a timely, optimized and comprehensive manner. Any business behavior of the company will be reflected in corresponding legal actions. The company's employee hiring, external investment, product sales, material procurement, etc. will all bring legal consequences. As an economic organization, companies, like natural persons, live in a society woven by law. The company's business behavior is essentially a profit-seeking behavior, and in form it is realized through legal behavior. When a company is operating, it is inevitable that various legal disputes will occur. Some are due to one's own reasons, some are due to others, and some are due to force majeure factors. For potential legal disputes, the legal department should evaluate the possibility of them becoming explicit and their impact on the company, and prepare plans to resolve legal risks in advance. For legal disputes that have arisen, the company should evaluate its legal risks and decide whether to resolve them through non-litigation methods or litigation methods, and whether to resolve them with concessions or without concessions. The evaluation of legal dispute resolution methods should be determined based on factors such as the cause of the dispute, one's own fault, the other party's fault, risk level, initiative, social impact and other factors. The resolution of legal disputes must be supported by legal professionals, who must formulate detailed plans and steps and prepare relevant legal documents. Failure to resolve legal disputes in a timely manner or using the wrong method will cause unnecessary losses to the company. Therefore, the understanding of legal disputes must be comprehensive, the plan must be optimized, and the handling must be timely. Legal risk is not terrible; it is an indispensable dance partner for a company's survival. As long as we master the basic rules, we can dance with legal risks, prevent and control losses caused by risks, and enable legal risks to be evaluated, prevented, and controlled. The promotion of understanding legal risks is not to tie the hands of employees and companies, but to encourage employees and companies to operate within controllable risk limits and enhance the company's profitability and risk resistance.