Column: Risk Management

Questions of Moral Fiber

By: | September 12, 2017 • 2 min read
Joanna Makomaski is a specialist in innovative enterprise risk management methods and implementation techniques. She can be reached at [email protected]

I will never forget a vibrant debate that occurred at an international risk management conference years ago. It stuck with me all these years. The subject was that of morality. We debated how morality affects our risk management practices globally, whether moral beliefs are inherent to human nature and whether they are negotiable depending on your country.

We discussed acts such as murder — a universally immoral act. But the discussion got murkier on “corporate morality.” One act stood out: Was the issuance or acceptance of kickbacks or bribes to gain a business advantage considered moral?

Such acts were argued as being ‘normal’ practice depending upon the country. Risk managers felt beholden to the shady tactics and had to surrender to them.

The question remained: if something of questionable ethics becomes mainstream, does it stop being immoral?

One risk manager whose firm clearly struggled with corrupt acts spoke up: “What is considered normal for the company, does not make it moral with all of us. Shareholders, employees and the community feel this. We will suffer the consequences ultimately. Morality must prevail.”

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I think part of a CEO’s objective is to define an organization’s purpose and assure that purpose trends toward good. The CEO must foster a culture that is loyal to that purpose, assures it can stand the test of time and is in the best interests of all its stakeholders.

In the end, a company is merely a collection of people who come to work everyday motivated by their own moral codes – codes expressed by the nagging voices that torment them when they do wrong. Threading those morals into a unified culture gives an organization a corporate soul. Management actions deeply affect this culture and the ability to grow loyalty, profits and innovation.

What is considered normal for the company, does not make it moral with all of us. Shareholders, employees and the community feel this. We will suffer the consequences ultimately. Morality must prevail.

Does morality matter in business and in modern capitalism? Should dog-eat-dog? Do good guys end up last? Maybe in the short-term dogs will win, but not in the long.

These ideas are best expressed in the book which I treat as the risk management bible for corporate sustainability: Corporate Survival: The Critical Importance of Sustainability Risk Management, by Dan Anderson.

The book examines “the rising sustainability risks that affect thriving businesses, the environment, various societies, people in foreign lands, and our children.” It says for a company to survive and thrive, it must respectfully balance profits, planetary footprint, and the people affected by its purpose: People, Planet and Profit in harmony.

If one P is neglected, survival is at risk. Good management requires the perpetual reconciliation of competing obligations of all the Ps.

A crystal clear moral code is needed to keep decisions in line. There can be no moral ambiguity. When an organization suffers eclipses of integrity or moral meltdowns, this only leads to organizational meltdown. &

More from Risk & Insurance

More from Risk & Insurance

2017 Teddy Awards

The Era of Engagement

The very best workers’ compensation programs are the ones where workers aren’t just the subject of the program, they’re a part of it.
By: | November 1, 2017 • 5 min read

Employee engagement, employee advocacy, employee participation — these are common threads running through the programs we honor this year in the 2017 Theodore Roosevelt Workers’ Compensation and Disability Management Awards, sponsored by PMA Companies.

A panel of judges — including workers’ comp executives who actively engage their own employees — selected this year’s winners on the basis of performance, sustainability, innovation and teamwork. The winners hail from different industries and regions, but all make people part of the solution to unique challenges.

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Valley Health System is all-too keenly aware of the risk of violence in health care settings, running the gamut from disruptive patients to grieving, overwrought family members to mentally unstable active shooters.

Valley Health employs a proactive and comprehensive plan to respond to violent scenarios, involving its Code Atlas Team — 50 members of the clinical staff and security departments who undergo specialized training. Valley Health drills regularly, including intense annual active shooter drills that involve participation from local law enforcement.

The drills are unnerving for many, but the program is making a difference — the health system cut its workplace violence injuries in half in the course of just one year.

“We’re looking at patient safety and employee safety like never before,” said Barbara Schultz, director of employee health and wellness.

At Rochester Regional Health’s five hospitals and six long-term care facilities, a key loss driver was slips and falls. The system’s mandatory safety shoe program saw only moderate take-up, but the reason wasn’t clear.

Rather than force managers to write up non-compliant employees, senior manager of workers’ compensation and employee safety Monica Manske got proactive, using a survey as well as one-on-one communication to suss out the obstacles. After making changes based on the feedback, shoe compliance shot up from 35 percent to 85 percent, contributing to a 42 percent reduction in lost-time claims and a 46 percent reduction in injuries.

For the shoe program, as well as every RRH safety initiative, Manske’s team takes the same approach: engaging employees to teach and encourage safe behaviors rather than punishing them for lapses.

For some of this year’s Teddy winners, success was born of the company’s willingness to make dramatic program changes.

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Delta Air Lines made two ambitious program changes since 2013. First it adopted an employee advocacy model for its disability and leave of absence programs. After tasting success, the company transitioned all lines including workers’ compensation to an integrated absence management program bundled under a single TPA.

While skeptics assume “employee advocacy” means more claims and higher costs, Delta answers with a reality that’s quite the opposite. A year after the transition, Delta reduced open claims from 3,479 to 1,367, with its total incurred amount decreased by $50.1 million — head and shoulders above its projected goals.

For the Massachusetts Port Authority, change meant ending the era of having a self-administered program and partnering with a TPA. It also meant switching from a guaranteed cost program to a self-insured program for a significant segment of its workforce.

Massport’s results make a great argument for embracing change: The organization saved $21 million over the past six years. Freeing up resources allowed Massport to increase focus on safety as well as medical management and chopped its medical costs per claim in half — even while allowing employees to choose their own health care providers.

Risk & Insurance® congratulates the 2017 Teddy Award winners and holds them in high esteem for their tireless commitment to a safe workforce that’s fully engaged in its own care. &

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More coverage of the 2017 Teddy Award Winners and Honorable Mentions:

Advocacy Takes Off: At Delta Air Lines, putting employees first is the right thing to do, for employees and employer alike.

 

Proactive Approach to Employee SafetyThe Valley Health System shifted its philosophy on workers’ compensation, putting employee and patient safety at the forefront.

 

Getting It Right: Better coordination of workers’ compensation risk management spelled success for the Massachusetts Port Authority.

 

Carrots: Not SticksAt Rochester Regional Health, the workers’ comp and safety team champion employee engagement and positive reinforcement.

 

Fit for Duty: Recognizing parallels between athletes and public safety officials, the city of Denver made tailored fitness training part of its safety plan.

 

Triage, Transparency and TeamworkWhen the City of Surprise, Ariz. got proactive about reining in its claims, it also took steps to get employees engaged in making things better for everyone.

A Lesson in Leadership: Shared responsibility, data analysis and a commitment to employees are the hallmarks of Benco Dental’s workers’ comp program.

 

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]