Risk Insider: Paula Vene Smith

Risks That Hide Behind Reputation and Compliance

By: | November 3, 2014 • 2 min read

Paula Vene Smith directs the Purposeful Risk Engagement Project (PREP) and is a professor at Grinnell College. Paula consults on risk in higher education, and has written Engaging Risk: A Guide for College Leaders. She can be reached at [email protected]

After agreeing that an emerging risk calls for action, the next step in risk management is to select the best way to treat the risk. Fears about compliance or reputation loom large, and these risks may be given priority in a climate of rapid disclosure fueled by social media and round-the-clock news.

But beware of overlooking the basic question: “What’s at risk?” Have you clarified what vital process, asset, or outcome is threatened?  Sometimes a group of leaders may not all arrive at the same answer.

Take the recently reported case of academic fraud at the University of North Carolina, where students apparently were advised to sign up for phony “paper courses” that involved no real academic work, yet provided them with grades and credit to preserve their eligibility for athletic participation.

But framing the problem in terms of reputation can neglect more direct issues, like the safety of minor children, or corruption of data relied upon for key decisions.

As this story broke, early news accounts framed the risk in terms of NCAA compliance.  But not long afterward, opinion pieces and articles began pointing out that such fraud can strike at the institution’s academic integrity.

The worth of a diploma is potentially undermined by many years of granting degree credit in the absence of genuine learning effort or academic achievement.

Similarly, when an employee is found to have engaged in unethical or abusive behavior, campus administrators may think first of institutional reputation. Discussion will focus on avoiding litigation, or how to communicate the news in a way that will not cast the school in a negative light.

But framing the problem in terms of reputation can neglect more direct issues, like the safety of minor children, or corruption of data relied upon for key decisions.

In extreme cases, excessive concern for reputation can compound risk by tempting executive leaders to dismiss warning signs, decide not to investigate or report the wrongdoing, or even to engage in cover-up when the situation threatens to become public.

While compliance and reputation are key considerations in choosing how to manage an emerging risk, these issues can mask an underlying risk that is more basic.

Are academic institutions pursuing Title IX compliance primarily to satisfy government officials and look good to prospective students and their families?  Or is the goal an ideal learning environment unclouded by the physical and emotional pain of sexual assault, discrimination, and harassment?

The answer to this question is not just rhetorical.

As recently reported in The Washington Post, a number of well-meaning colleges have found that when they step up efforts to encourage reports under Title IX, the relevant statistics can be expected to rise.

While the increase in reporting allows for appropriate follow-up by the institution, it also creates the need to explain to a startled public that a higher number of assault and harassment reports does not necessarily indicate a more dangerous campus.

If the lower statistics from earlier years were due to under-reporting, what benefited was the institution’s reputation rather than the safety of its students.

What risks hide behind the protection of reputation and compliance?  Let’s be clear on what we most want to achieve when we choose how to mitigate a risk.

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.


That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.


Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

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