2222222222

Column: Risk Management

Hoodies and Brandy

By: | September 14, 2016 • 5 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

I recently returned from California where I had fabulous meetings with some fabulous companies. One meeting in particular stood out.

I was providing risk management advice to a rapidly growing technology company. When I arrived for the meeting, I was greeted by the CEO and chairman of the board. I confess I did a double-take: In front of me was a very young man, sporting a “man-bun,” wearing a grey hoodie and flips flops.

Maybe it was my East Coast corporate conservatism? Maybe I was not cool enough to fully appreciate the West Coast carefree attitude? Maybe I’ve been too conditioned to how a board chairman should appear?

Most of us have been groomed to think that once we served our time in a C-suite and near retirement that it is only then we get the time-honored privilege to join a board and coast through retirement imparting our vast knowledge and experience with a cigar and brandy in hand.

So when my new friend complained how old he felt to be the board chair at age 28, I couldn’t help but chuckle. Being years his senior it pained me to hear that.

But after hearing his company’s numbers, soon to be a $100 million in revenue company in only a few years, I felt less pain but much pride, proving that age and freshness can in fact be a great asset.

Advertisement




It has been long argued that a lack of diversity on boards, long tenure and inadequate board composition create a risk that boards will lose independence from management.

The idea of diversity and inclusivity is very much part of our national discourse today. But what my encounter helped me frame was that we tend to think of diversity as a proper blend of gender, race and abilities.

We seem to speak less about having a mix of age groups representing us.

The fundamental purpose of a board is to guard investors’ and consumers’ interests. The board should reflect those who fuel and support your company — the customers and the society it serves.

Having too many like-minded people, the same age, who come from the same background, can lead to a blind groupthink that can fail to hold management accountable and ask tough, pertinent questions.

It was no surprise when I recently read a “Financial Times” analysis of data by the shareholder advisory group ISS Analytics that showed U.S. boards are “maler, staler and frailer” than their European counterparts.

The analysis said these directors, on average, are less independent-minded. It is no coincidence that shareholders of Chipotle Mexican Grill, recently plagued with a series of food safety problems, blamed a stale, insular board of directors for failing to move fast enough to address problems.

If I learned one thing from my recent meeting, it’s that 20 is the new 40. Push aside some of the brandy and cigars. Make room for the hoodies and flip flops.&

More from Risk & Insurance

More from Risk & Insurance

Risk Management

The Profession

The risk manager for Boyd Gaming Corp. says curiosity keeps him engaged, and continual education will be the key to managing emerging risks.
By: | May 1, 2018 • 4 min read

R&I: What was your first job?

I was trained as an accountant, worked in public accounting and became a CPA. Being comfortable with numbers is helpful in my current role, and obviously, the language of business is financial statements, so it helps.

R&I: How did you come to work in risk management?

Working in finance in the corporate environment included the review of budgets and the analysis of business expenses. I quickly found the area of benefits and insurance — and how “accepting risk” impacted those expenses — to be fascinating. I asked a lot of questions. Be careful what you ask for — I soon found myself responsible for those insurance areas and haven’t looked back!

R&I: What is the risk management community doing right?

Advertisement




I have found the risk management community to be a close-knit group, whether that’s industry professionals, risk managers with other companies or support organizations like RIMS and other regional groups. The expertise of the carriers and specialty vendors to develop new products and programs, along with the appropriate education, will continue to be of key importance to companies going forward.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

As I’m sure many in the insurance field would agree, Hurricanes Katrina and Rita in 2005 changed our world and our industry. It was a particularly intense time and certainly a baptism by fire for people like me who were relatively new to the industry. This event clearly accelerated the switch to the acceptance of more risk, which impacted mitigation strategies and programs.

Bob Berglund, vice president, benefits and insurance, Boyd Gaming Corp.

R&I: What emerging commercial risk most concerns you?

The fast-paced threat that cyber security represents today. Our company, like so many companies, is reliant upon computers, software and IT expertise in our everyday existence. This new risk has forged an even stronger relationship between risk management and our IT department as we work together to address this growing threat.

Additionally, the shooting event in Las Vegas in 2017 will have an enduring impact on firms that host large gatherings and arena-style events all over the world, and our company is no exception.

R&I: What insurance carrier do you have the highest opinion of?

Advertisement




With the various types of insurance programs we employ, I have been fortunate to work with most of the large national and international carriers — all of whom employ talented people with a vast array of resources.

R&I:  How much business do you do direct versus going through a broker?

We use brokers for many of our professional coverages, such as property, casualty, D&O and cyber. We are self-insured under our health plans, with close to 25,000 members. We tend to manage those programs internally and utilize direct relationships with carriers and specialty vendors to tailor a plan that works best for team members.

R&I: Who is your mentor and why?

I have been fortunate to have worked alongside some smart and insightful people during my career. A key piece of advice, said in many different ways, has served me well. Simply stated: “Seek to understand before being understood.”

What this has meant to me is try everything you can to learn about something, new or old. After you have gained this knowledge, you can begin to access and maybe suggest changes or adjustments. Being curious has always been a personal enjoyment for me in business, and I have found people are more than willing to lend a hand, offer information and advice — you just need to ask. Building those alliances and foundations of knowledge on a subject matter makes tackling the future more exciting and fruitful.

R&I: What have you accomplished that you are proudest of?

Our benefit health plan is much more than handing out an insurance card at the beginning of the year. We encourage our team members and their families to learn about their personal health, get engaged in a variety of health and wellness programs and try to live life in the healthiest possible way. The result of that is literally hundreds of testimonials from our members every year on how they have lost weight, changed their lifestyle and gotten off medications. It is extremely rewarding and is a testament to [our] close-knit corporate culture.

R&I: What’s the best restaurant you’ve ever eaten at?

Advertisement




Some will remember the volcano eruption in Iceland in spring of 2010. I was just finishing a week of meetings in London with Lloyd’s syndicates related to our property insurance placement when the airspace in England and most of northern Europe was shut down — no airplanes in or out! Flights were ultimately canceled for the following five days. Therefore, with a few other stranded visitors like myself, we experimented and tried out new restaurants every day until we could leave. It was a very interesting time!

R&I: What is the riskiest activity you ever engaged in?

I am originally from Canada, and I played ice hockey from the time I was four years old up until quite recently. Too many surgeries sadly forced my recent retirement.

R&I: What do your friends and family think you do?

That’s a funny one … I am a CPA working in the casino industry, doing insurance and risk management, so neighbors and acquaintances think I either do tax returns or they think I’m a blackjack dealer at the casino!




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]