Risk Insider: Quin Rodriguez

Do Vendors Help or Hurt Your Corporate Social Responsibility Mission?

By: | May 31, 2018 • 2 min read
Quin is Vice President, Strategy, for Riskonnect. He is responsible for leading Riskonnect's vision to drive growth and engagement in the Integrated Risk Management market. Quin has 18+ years of Executive Sales Management and Leadership experience.

Corporate social responsibility (CSR) is becoming an influencer of consumers’ purchasing decisions.

Advertisement




Whether it’s the environment, human rights, supply-chain sustainability or corporate governance, companies now have to take a clear stance on social issues, and it better be one that consumers can get on board with. If it doesn’t make sense or “feel good” to customers, they’re less likely to support the business.

Critical to maintaining a positive CSR image is understanding how your vendors influence this image. Your vendors are an extension of your brand, so they should reflect your commitment to maintaining a socially responsible reputation. With that in mind, it’s important to steer clear of vendors that can cause consumers to question your stance on social issues.

Whether it’s the environment, human rights, supply-chain sustainability or corporate governance, companies now have to take a clear stance on social issues, and it better be one that consumers can get on board with.

For example, let’s examine the backlash that arose in 2010 when the Susan G. Komen Foundation partnered with KFC to raise money for cancer research and breast health awareness. For every “pink bucket” sold, KFC donated 50 cents to the foundation. Though the gesture promoted social responsibility for KFC, questions arose for Susan G. Komen as a huge part of battling cancer, or any other serious disease, is a healthy diet. As a result, the partnership became a huge brand contradiction, resulting in negative press for both companies.

More recently, in 2016, Nestle and two other major food companies were under fire for knowingly sourcing cocoa from the Ivory Coast, an area known for using child labor. These companies were accused of providing farmers with financial and technical assistance in exchange for cheap product and labor, thereby supporting child labor and poor work conditions. Though it is not clear how these incidents have affected consumers’ brand perceptions, fighting the resulting lawsuit has to be taxing on the company’s resources.

Avoiding the pitfalls faced by Nestle and the Susan G. Komen Foundation requires a more extensive look at your vendor network and how they are viewed from a CSR perspective.

  1. Research vendors before entering a contract:
    Before signing the dotted line, be sure to research any CSR stories on your potential vendors and where and why they were written.

    Advertisement




    Conducting business with a vendor means you agree with their business standards, thus this research ensures full transparency into their business practices.Also use potential vendors’ websites as a resource. Most company websites include pages dedicated to values, missions and even board members and stakeholder information. All these details can provide useful insight into company priorities.

  2. Be proactive. Monitor vendors:
    Once you’ve entered a contract with a vendor, it’s important to take proactive measures to ensure your vendor is maintaining compliance as well as social responsibility. Visit your vendors so you can see their operations first hand, use quality compliance solutions to hold vendors accountable and even consider including vendors in your own CSR programs.

As consumers become more aware of corporate social responsibility, companies become more vulnerable to scrutiny. And the room for error is minimal as the internet increases accessibility and social media demands a fast response and resolution. Taking the time to understand your vendors and their approach to CSR can help avoid reputation risk nightmares.

More from Risk & Insurance

More from Risk & Insurance

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.

Advertisement




But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.

Advertisement




Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &

____________________

Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]