5 Pitfalls that Could Decimate Your Corporate Social Responsibility Efforts

'Doing good' takes more than a few volunteer hours, which is why more businesses are investing time and resources into corporate social responsibility programs.
By: | February 7, 2020

Most of us are no strangers to the world of philanthropy and the concept of “doing good.”

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We’ve been asked to lend our time and financial support to various charitable causes. We are often solicited by groups to help combat various diseases, construct new buildings or save the rain forest. And for many causes, commercial insurance professionals are the cornerstone of these efforts — participating in philanthropic initiatives and charitable endeavors.

Business volunteerism, often referred to as corporate social responsibility (CSR), can take many forms and can be a quadruple win.

Everyone involved — the commercial insurance company that provides the employee volunteers, those where employee volunteers help out, the wider community and the employees themselves — has something to gain. Such efforts offer a low-cost, low-risk, high-impact way of making the knowledge, skills and experiences of the business sector accessible to the nonprofit sector while building understanding, employee skill and community goodwill.

Bill Ross, CEO, Insurance Industry Charitable Foundation (IICF), points out that while we are seeing CSR programs evolve to meet employee interests and community needs, the insurance industry has been putting these words into action for years.

“The industry is getting more creative about how it engages employees and contributes to the community, with an increased emphasis on giving back through volunteerism and trending away from monetary contributions only,” Ross said. “This is related to a greater number of millennials in the workforce, many of whom prefer to contribute through volunteering.”

The industry also now has better tools for measuring the reach and impact of charitable giving. For example, IICF recently released a survey and report with McKinsey & Co. on charitable giving within the insurance industry.

“In the survey, we found 41% of the industry respondents were using key performance indicators in 2019 to measure the benefit of charitable giving and volunteerism, up from 26% reported in 2015,” Ross said.

“Further, respondents were more receptive to industry collaboration on initiatives supporting a single cause than they have been in the past. Finally, we learned companies value an even balance of business needs and stakeholder interests with what is needed in their communities.”

That said, because the execution of CSR activities often faces challenges and failures aplenty, it pays to learn about the common pitfalls and how to turn those failures into successes.

Failures to Avoid

According to Suzanne Scatliffe, director of CSR at AXA XL, CSR has been an essential part of many organizations, continuously evolving from traditional philanthropy to building a purposeful role in society.

“Today, leaders in CSR and sustainability — across our industry and more widely — are looking at how CSR can provide business value as well as social and environmental impact,” Scatliffe said.

“CSR programs are being designed to support new market penetration, business innovation and strengthen corporate reputation. Relationships with nonprofits are moving from the role of ‘corporate donor’ to ‘strategic partner.’ And the next generation of talent is seeking an employer that takes CSR as seriously as its bottom line.”

Here are a few things to keep in mind when deciding on CSR ventures.

1) Not a good match.

Employers must ask themselves, “Is this a relevant and appropriate initiative for my company?”

As Scatliffe explained, unfortunately, there have been many well-known brands in multiple industries that haven’t stopped to think whether a nonprofit, or a cause, fits with the nature of their business.

Suzanne Scatliffe, director of CSR, AXA XL

“When companies misalign their CSR efforts, they can appear hypocritical by not taking their social responsibilities seriously or open themselves up to accusations of ‘green washing,’ ” Scatliffe said. And so, well-intentioned CSR efforts quickly become counterproductive and even harmful for the reputation of a company.

“The fact is it’s very easy to get it wrong,” Scatliffe said. “So it’s important to consider where a company can best leverage its expertise and fundamental purpose as a business to make a positive impact.”

2) Not understanding your key stakeholders.

When Scatliffe and her team are looking to turn a project idea into a plan, the first thing they do at AXA XL is map who the company’s stakeholders are — internally and externally — by influence and interest.

“We’ll then consider what their priorities are,” Scatliffe said. “This helps us develop a program that inspires colleagues, addresses any potential roadblocks or concerns, and is in line with wider external expectations.”

According to Robert Bikel, director of the socially, environmentally and ethically responsible (SEER) program at Pepperdine Graziadio Business School, said the Global Reporting Initiative has outlined several principles for companies wishing to report on CSR activities. Chief among which is materiality.

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“This is the principle that companies should address issues that are both significant to stakeholders and to company strategy,” Bikel said.

“Giving money to charities is a beneficent act, but oftentimes has little to do with the impacts a company can have through its value chain activities on salient stakeholders. The Global Reporting Initiative is an independent standards organization that helps businesses, governments and other organizations understand and communicate their impacts on issues.”

3) Diving in without defining success.

One of the main reasons that any project fails, CSR-related or otherwise, is because not enough time has been spent defining what success will look like, from the outset of the project.

For example, at AXA XL, the team will spend a significant amount of time developing a set of objectives in close collaboration with the company’s nonprofit partner so both organizations feel the mission they have defined is manageable and the project is of equal value to both entities.

“Those leading CSR efforts should talk to employees, community representatives and local nonprofit leaders as they create the CSR program,” Ross said. “This ensures the program meets the needs of area nonprofits and reflects the ideals of the employees and community.”

4) Thinking about the end of the project, at the end of the project.

It’s critical to measure the impact of any project; but this has to happen at the start, not the end.

“It’s easy to measure outputs at the end of a project — such as how many volunteering hours were donated — but the associated impacts of those hours, essentially what was achieved, may take some advance planning in order to capture this effectively,” Scatliffe said. “And the impacts are the most meaningful data from your entire project.”

There also needs to be some thought given early on as to what happens once the project is done.

What’s Phase II? How is the company going to help the nonprofit partner carry forward the work you have done together?

“It’s a truism among CSR advocates that short-term thinking is the enemy of social responsibility,” Bikel said. “By only focusing on short-term wins, companies can exclude opportunities to develop meaningful long-term strategies that generate significant value for stakeholders.”

5) Not having the space to “fail.”

CSR programs should be the place to test business ideas that may not be immediately viable in the short term but could have social, environmental and economic value in the long term. As Scatliffe explained, this may mean that ambitious programs miss targets, but they’ll still enable progress.

“And we need to appreciate that effective CSR is a marathon, not a sprint,” Scatliffe said.

“Sometimes a company will make a step in the right direction and immediately be criticized by the media or the public for not doing enough,” she continued.

“Occasionally this criticism is fair; often its not. We need to applaud genuine efforts to tackle pieces of complex social and environmental puzzles and recognize that taking a small step is always better than standing still.”

On the Horizon

So are CSR programs here to stay?

Indeed, they are, say the experts.

“Businesses are increasingly recognizing that company performance, and the prosperity of wider society, are mutually dependent,” Scatliffe said. “There are many studies that cite that sustainability policies reduce risk — particularly relevant to our industry — and promote faster growth.”

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Social and environmental risks tend to manifest themselves over a longer term and are typically outside a business’s control, which means that all companies need to build capacity and adaptive strategies now to be future-fit.

“Ultimately, CSR is about building a truly sustainable business,” Scatliffe said. “And so, CSR as we know it now won’t exist, because it will be intrinsic to every function of the company and a key part of the core business strategy.”

And Ross points out that new talent coming into the insurance industry wants to make a difference through both work and community service. And he believes that trend will continue.

“Again, in the future, the CSR program will, over time, become a company value and long-term commitment,” Ross said.

“We are already seeing CSR take a seat alongside shareholder value. Simply being a profitable company is no longer enough. How a company runs its business and how employees are engaged in the values of the company is the new measurement of success.” &

Based in Minneapolis, Minnesota, Maura Keller is a writer, editor and published book author with more than 20 years of experience. She has written about business, design, marketing, health care, and a wealth of other topics for dozens of regional and national publications. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Scenario

The Betrayal of Elizabeth

In this Risk Scenario, Risk & Insurance explores what might happen in the event a telemedicine or similar home health visit violates a patient's privacy. What consequences await when a young girl's tele visit goes viral?
By: | October 12, 2020
Risk Scenarios are created by Risk & Insurance editors along with leading industry partners. The hypothetical, yet realistic stories, showcase emerging risks that can result in significant losses if not properly addressed.

Disclaimer: The events depicted in this scenario are fictitious. Any similarity to any corporation or person, living or dead, is merely coincidental.

PART ONE: CRACKS IN THE FOUNDATION

Elizabeth Cunningham seemingly had it all. The daughter of two well-established professionals — her father was a personal injury attorney, her mother, also an attorney, had her own estate planning practice — she grew up in a house in Maryland horse country with lots of love and the financial security that can iron out at least some of life’s problems.

Tall, good-looking and talented, Elizabeth was moving through her junior year at the University of Pennsylvania in seemingly good order; check that, very good order, by all appearances.

Her pre-med grades were outstanding. Despite the heavy load of her course work, she’d even managed to place in the Penn Relays in the mile, in the spring of her sophomore season, in May of 2019.

But the winter of 2019/2020 brought challenges, challenges that festered below the surface, known only to her and a couple of close friends.

First came betrayal at the hands of her boyfriend, Tom, right around Thanksgiving. She saw a message pop up on his phone from Rebecca, a young woman she thought was their friend. As it turned out, Rebecca and Tom had been intimate together, and both seemed game to do it again.

Reeling, her holiday mood shattered and her relationship with Tom fractured, Elizabeth was beset by deep feelings of anxiety. As the winter gray became more dense and forbidding, the anxiety grew.

Fed up, she broke up with Tom just after Christmas. What looked like a promising start to 2020 now didn’t feel as joyous.

Right around the end of the year, she plucked a copy of her father’s New York Times from the table in his study. A budding physician, her eyes were drawn to a piece about an outbreak of a highly contagious virus in Wuhan, China.

“Sounds dreadful,” she said to herself.

Within three months, anxiety gnawed at Elizabeth daily as she sat cloistered in her family’s house in Bel Air, Maryland.

It didn’t help matters that her brother, Billy, a high school senior and a constant thorn in her side, was cloistered with her.

She felt like she was suffocating.

One night in early May, feeling shutdown and unable to bring herself to tell her parents about her true condition, Elizabeth reached out to her family physician for help.

Dr. Johnson had been Elizabeth’s doctor for a number of years and, being from a small town, Elizabeth had grown up and gone to school with Dr. Johnson’s son Evan. In fact, back in high school, Evan had asked Elizabeth out once. Not interested, Elizabeth had declined Evan’s advances and did not give this a second thought.

Dr. Johnson’s practice had recently been acquired by a Virginia-based hospital system, Medwell, so when Elizabeth called the office, she was first patched through to Medwell’s receptionist/scheduling service. Within 30 minutes, an online Telehealth consult had been arranged for her to speak directly with Dr. Johnson.

Due to the pandemic, Dr. Johnson called from the office in her home. The doctor was kind. She was practiced.

“So can you tell me what’s going on?” she said.

Elizabeth took a deep breath. She tried to fight what was happening. But she could not. Tears started streaming down her face.

“It’s just… It’s just…” she managed to stammer.

The doctor waited patiently. “It’s okay,” she said. “Just take your time.”

Elizabeth took a deep breath. “It’s like I can’t manage my own mind anymore. It’s nonstop. It won’t turn off…”

More tears streamed down her face.

Patiently, with compassion, the doctor walked Elizabeth through what she might be experiencing. The doctor recommended a follow-up with Medwell’s psychology department.

“Okay,” Elizabeth said, some semblance of relief passing through her.

Unbeknownst to Dr. Johnson, her office door had not been completely closed. During the telehealth call, Evan stopped by his mother’s office to ask her a question. Before knocking he overheard Elizabeth talking and decided to listen in.

PART TWO: BETRAYAL

As Elizabeth was finding the courage to open up to Dr. Johnson about her psychological condition, Evan was recording her with his smartphone through a crack in the doorway.

Spurred by who knows what — his attraction to her, his irritation at being rejected, the idleness of the COVID quarantine — it really didn’t matter. Evan posted his recording of Elizabeth to his Instagram feed.

#CantManageMyMind, #CrazyGirl, #HelpMeDoctorImBeautiful is just some of what followed.

Elizabeth and Evan were both well-liked and very well connected on social media. The posts, shares and reactions that followed Evan’s digital betrayal numbered in the hundreds. Each one of them a knife into the already troubled soul of Elizabeth Cunningham.

By noon of the following day, her well-connected father unleashed the dogs of war.

Rand Davis, the risk manager for the Medwell Health System, a 15-hospital health care company based in Alexandria, Virginia was just finishing lunch when he got a call from the company’s general counsel, Emily Vittorio.

“Yes?” Rand said. He and Emily were accustomed to being quick and blunt with each other. They didn’t have time for much else.

“I just picked up a notice of intent to sue from a personal injury attorney in Bel Air, Maryland. It seems his daughter was in a teleconference with one of our docs. She was experiencing anxiety, the daughter that is. The doctor’s son recorded the call and posted it to social media.”

“Great. Thanks, kid,” Rand said.

“His attorneys want to initiate a discovery dialogue on Monday,” Emily said.

It was Thursday. Rand’s dreams of slipping onto his fishing boat over the weekend evaporated, just like that. He closed his eyes and tilted his face up to the heavens.

Wasn’t it enough that he and the other members of the C-suite fought tooth and nail to keep thousands of people safe and treat them during the COVID-crisis?

He’d watched the explosion in the use of telemedicine with a mixture of awe and alarm. On the one hand, they were saving lives. On the other hand, they were opening themselves to exposures under the Health Insurance Portability and Accountability Act. He just knew it.

He and his colleagues tried to do the right thing. But what they were doing, overwhelmed as they were, was simply not enough.

PART THREE: FALLING DOMINOES

Within the space of two weeks, the torture suffered by Elizabeth Cunningham grew into a class action against Medwell.

In addition to the violation of her privacy, the investigation by Mr. Cunningham’s attorneys revealed the following:

Medwell’s telemedicine component, as needed and well-intended as it was, lacked a viable informed consent protocol.

The consultation with Elizabeth, and as it turned out, hundreds of additional patients in Maryland, Pennsylvania and West Virginia, violated telemedicine regulations in all three states.

Numerous practitioners in the system took part in teleconferences with patients in states in which they were not credentialed to provide that service.

Even if Evan hadn’t cracked open Dr. Johnson’s door and surreptitiously recorded her conversation with Elizabeth, the Medwell telehealth system was found to be insecure — yet another violation of HIPAA.

The amount sought in the class action was $100 million. In an era of social inflation, with jury awards that were once unthinkable becoming commonplace, Medwell was standing squarely in the crosshairs of a liability jury decision that was going to devour entire towers of its insurance program.

Adding another layer of certain pain to the equation was that the case would be heard in Baltimore, a jurisdiction where plaintiffs’ attorneys tended to dance out of courtrooms with millions in their pockets.

That fall, Rand sat with his broker on a call with a specialty insurer, talking about renewals of the group’s general liability, cyber and professional liability programs.

“Yeah, we were kind of hoping to keep the increases on all three at less than 25%,” the broker said breezily.

There was a long silence from the underwriters at the other end of the phone.

“To be honest, we’re borderline about being able to offer you any cover at all,” one of the lead underwriters said.

Rand just sat silently and waited for another shoe to drop.

“Well, what can you do?” the broker said, with hope draining from his voice.

The conversation that followed would propel Rand and his broker on the difficult, next to impossible path of trying to find coverage, with general liability underwriters in full retreat, professional liability underwriters looking for double digit increases and cyber underwriters asking very pointed questions about the health system’s risk management.

Elizabeth, a strong young woman with a good support network, would eventually recover from the damage done to her.

Medwell’s relationships with the insurance markets looked like it almost never would. &

Bar-Lessons-Learned---Partner's-Content-V1b

Risk & Insurance® partnered with Allied World to produce this scenario. Below are Allied World’s recommendations on how to prevent the losses presented in the scenario. This perspective is not an editorial opinion of Risk & Insurance.®.

The use of telehealth has exponentially accelerated with the advent of COVID-19. Few health care providers were prepared for this shift. Health care organizations should confirm that Telehealth coverage is included in their Medical Professional, General Liability and Cyber policies, and to what extent. Concerns around Telehealth focus on HIPAA compliance and the internal policies in place to meet the federal and state standards and best practices for privacy and quality care. As states open businesses and the crisis abates, will pre-COVID-19 telehealth policies and regulations once again be enforced?

Risk Management Considerations:

The same ethical and standard of care issues around caring for patients face-to-face in an office apply in telehealth settings:

  • maintain a strong patient-physician relationship;
  • protect patient privacy; and
  • seek the best possible outcome.

Telehealth can create challenges around “informed consent.” It is critical to inform patients of the potential benefits and risks of telehealth (including privacy and security), ensure the use of HIPAA compliant platforms and make sure there is a good level of understanding of the scope of telehealth. Providers must be aware of the regulatory and licensure requirements in the state where the patient is located, as well as those of the state in which they are licensed.

A professional and private environment should be maintained for patient privacy and confidentiality. Best practices must be in place and followed. Medical professionals who engage in telehealth should be fully trained in operating the technology. Patients must also be instructed in its use and provided instructions on what to do if there are technical difficulties.

This case study is for illustrative purposes only and is not intended to be a summary of, and does not in any way vary, the actual coverage available to a policyholder under any insurance policy. Actual coverage for specific claims will be determined by the actual policy language and will be based on the specific facts and circumstances of the claim. Consult your insurance advisors or legal counsel for guidance on your organization’s policies and coverage matters and other issues specific to your organization.

This information is provided as a general overview for agents and brokers. Coverage will be underwritten by an insurance subsidiary of Allied World Assurance Company Holdings, Ltd, a Fairfax company (“Allied World”). Such subsidiaries currently carry an A.M. Best rating of “A” (Excellent), a Moody’s rating of “A3” (Good) and a Standard & Poor’s rating of “A-” (Strong), as applicable. Coverage is offered only through licensed agents and brokers. Actual coverage may vary and is subject to policy language as issued. Coverage may not be available in all jurisdictions. Risk management services are provided or arranged through AWAC Services Company, a member company of Allied World. © 2020 Allied World Assurance Company Holdings, Ltd. All rights reserved.




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