It has been my honor to interact with thousands of insurance professionals in discussing Ethics as it applies to our industry. For more than 20 years I have taught continuing education classes as required by the California Department of Insurance, for professionals to maintain their licenses. From this interaction I have been able to make some observations.
Impacting the Bottom Line
Many professionals do not make a connection between the success of a business and the perception of a firms Ethical Standards. Studies by the Josephson Institute and the Ethics Resource Center reveal that eighty percent of people interviewed say that they decide to buy a product or service partly based on their perception of a firms ethical standing. Seventy-four percent of those that buy and sell stocks say that the decision to buy a company’s stock is connected to the perception of the honesty of the firm. It has been proven over and over that talented employees will seek employment with businesses that have a reputation for high ethical standards. Unethical behavior worsens productivity, efficiency, communication and the recruiting and retention of talented employees.
The most significant factor affecting a company’s ethical perceptions is leadership. Leaders who demonstrate they are ethical people with strong character have a much greater impact on worker behavior than deliberate and visible efforts to promote ethics. Workers judge leaders on three factors. First, the overall character of their leaders as experienced through personal interactions. The second factor is how managers handle crisis situations. The third factor is the policies and procedures adopted by senior leaders to manage the company. Employees want to know, for example, whether leaders treat lower level employees with dignity and respect, share credit for the good things that happen, and uphold standards even if it reduces revenues and profits. If you want highly skilled ethical employees, you will have to lead them by example. Take a moment and analyze your company using some of the ideas written here.
Photo by Stuart Miles at freedigitalphotos.net
About the Author
Richard Masters, CPCU, ARM, AAI, AIS is a seasoned professional with over 45 years of experience serving the needs of complicated clients, including non-profit and governmental entities. In addition to the addressing the risk management needs of specific clients, Richard has also been a teacher and instructor in the insurance industry over the last 35 years through the Insurance Education Association, The College of Insurance, the CPCU Society and other professional organizations. He is certified by the Department of Insurance to conduct many different seminars and classes that provide continuing education to the insurance community.