Perspective | Corporate Conduct Risk Exposure: Are You Woke?

By: | February 21, 2020

Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

This may come as a shock: The corporate world is full of ill-mannered maniacs. Not you, obviously, nor me (usually), but just about everyone else. People appear to abandon all restraint the moment they arrive at work.

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Today’s subject is conduct risk, although misconduct risk might be nearer the mark.

Conduct risk is the danger of inappropriate speech or misconduct, acts or omissions by a company, or individuals within the company. It’s a hot issue out here on the new frontier.

Not a big deal, you say? Consider some recent reports.

A company called Away Luggage’s corporate culture reportedly includes: manipulative policies encouraging workdays of 16 hours or more; prohibiting time off; employee surveillance; bullying, and even firing, of employees of color; and extreme public Slack-shamings. I’m so unwoke that I have no idea what a ‘Slack-shaming’ is, but you get the drift.

Another company, THINX, was apparently plagued by bullying, sexual harassment and even reported nudity by its female founder and ex-CEO. I’m sufficiently woke not to make a joke of any sort about that.

WeWork is an American commercial real estate company offering shared workspaces for other companies. Its founder is said to have behaved like a loose cannon, frequently firing people, spending wildly and “crushing employee expectations” — although I’ve rarely worked for a company that didn’t do that.

There is no universally accepted definition of how to behave, but how not to behave is increasingly easy to spot. The pursuit of a company’s mission becomes obsessive and toxic. Feedback turns into bullying. Hard work morphs into overwork.

Knowing wrong from right is not enough. The simple solution is for people to conduct themselves with decorum, but that’s not likely to happen. Only jail sentences might reduce the burden of bad behavior.

Insurance is not exempt from the caveman lifestyle, with Lloyd’s earning notoriety as a cesspit of improper behavior for some time. I recall an insurance exec who got stung for tens of thousands of dollars in a clip joint, but, hey, who hasn’t been? At work, he was one of the nicest (and brokest) guys I ever met.

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Something seems to happen when men — and it’s mostly men — get together at work. Things they wouldn’t dream of doing at home somehow seem to be OK on the 17th floor. I could run you through the inappropriate things I’ve seen and suffered, but this magazine isn’t 900 pages long. Most of that was in the days when you could get away with almost anything, which merely encouraged people to try out even worse stuff.

As insurers, you have to help make the rules here. For your company to sell policies covering conduct risk, you’ll need a fairly clear understanding of what constitutes it, yet the definition changes all the time — and rarely as fast or as frequently as it has of late. Changing human nature may make the headlines, but some actions were surely never acceptable, even if they weren’t so publicly discussed. Ask Harvey Weinstein.

Knowing wrong from right is not enough. The simple solution is for people to conduct themselves with decorum, but that’s not likely to happen. Only jail sentences might reduce the burden of bad behavior.

After World War II, we were advised to forgive, but not to forget. Forgiveness is an alien concept today. We’ve come a long way backwards, baby. &

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The R&I Editorial Team can be reached at [email protected]