Spurred by greater recognition of the numerous risks facing their organizations, many executives are turning to enterprise risk management (ERM). By identifying and assessing risks and then determining methods to control these risks, a company can gain a competitive advantage over its rivals, says Terry Campbell, managing director of the Global Risk Management Practice for Arthur J. Gallagher & Co.
“Companies that implement an effective enterprise risk management program will have a lower cost of risk than their peers, which will provide them an advantage in the cost of their products or services that leads to greater growth and profitability for these organizations,” says Campbell.
Smart Business spoke with Campbell about enterprise risk management, the benefits it can provide and how to go about implementing a program.
What is enterprise risk management?
While ERM has gained traction over the last several years, there is still significant confusion as to what ERM really is, how do you implement it within an organization and what the benefits are. These are questions faced every day by risk managers and brokers alike when asked if they should implement an enterprise risk management program. While ERM has become a buzzword within risk management and the activity level in this arena has increased, the question still remains among many risk management professionals: What is ERM? In the absence of a defined and consistent definition, ERM is a process that allows an organization to:
- Effectively identify its significant risks
- Assess each of these risks
- Determine methods for managing and controlling these risks
- Implement selected risk control techniques to manage the risks
- Monitor ongoing controls and make necessary modifications as needed
How can a company benefit from having an enterprise risk management program in place?
An ERM program provides awareness to stakeholders within a company and provides a view of risk across the entire enterprise. It also allows a company to develop common language for evaluating risk as well as identify interdependencies within the organization. Finally, an ERM program enables you to aggregate the amount of risk within the enterprise and formalize the risk levels you are willing to assume. While ERM is not mandatory, competitive forces will drive organizations in this direction.
What are the hurdles associated with starting an enterprise risk management program?
The first hurdle is determining what the concept of an ERM program really means within your organization. When embarking on an ERM study, cross-functional cooperation is imperative. Fears arise in the form of peers evaluating the performance of your business unit without understanding the intricacies of your operation. This can also lead to the concern of ‘turf grabbing’ by individuals. The time required to go through the ERM process is significant and requires a commitment of time by key members of your organization. Sometimes, this investment is difficult to secure when the value to the enterprise at inception is undetermined and unquantified.
What does the ERM process consist of?
- Understanding the risk appetite of your organization and its enterprise values
- Evaluating the goals of the process and making sure they align with the mission of the enterprise
- Identifying internal and external events that could impact your objectives
- Conducting analyses on the events that have the greatest likelihood of impacting the enterprise
- Determining the proper technique(s) for responding to risk whether that is avoidance, acceptance, reduction and/or sharing. Whatever action is undertaken it must align with the organizations tolerance to risk
- Establishing and implementing policies and procedures to ensure that risk responses are effectively carried out
- Effective communication should flow throughout (down/across/up) the enterprise.
TERRY CAMPBELL is the managing director of the Global Risk Management Practice for Arthur J. Gallagher & Co. Reach him at (818) 539-1383 or firstname.lastname@example.org.
Performance intervention is more than a fancy name for coaching, mentoring or formal performance appraisals, says Don St. Clair, vice president for enrollment management and marketing and adjunct faculty member of organizational leadership at Woodbury University. “Performance intervention suggests that when you see a possible performance problem, you’re going to immediately take action on it in a positive manner.”
Smart Business spoke with St. Clair about performance intervention, how it can best be utilized and what pitfalls to avoid.
What is performance intervention?
Performance intervention is the concept of identifying gaps or areas in employees’ performance that can be strengthened or improved. When employees have an area that they’re underperforming in, rather than taking punitive action, which can even include firing someone, you want to intervene. You want to take employees aside and tell them what areas they need to improve in and how you will help them meet these expectations.
How can a company best utilize performance intervention to improve employee productivity?
The first thing that should be done is to position performance intervention as a good thing, not a bad thing. The inclination in many organizations is that people not meeting expectations should be replaced. The fact is that employee turnover costs a lot of money. There is the cost of finding and recruiting employees, the cost of training employees, the lost productivity when a position is open and the lost productivity associated with somebody getting up to speed. It is important to recognize that dismissal should be the course of last resort.
Performance intervention can be utilized to identify the areas of employee productivity that aren’t where you’d like them to be. By identifying the areas of employee performance that could be improved and then by taking a proactive approach to help the employee become better, you’re going to increase productivity, reduce turnover and improve morale.
How should a company get started with performance intervention?
It starts with being able to identify exactly what it is that you expect from employees. I like to break it into two different categories: the characteristics that you would like an employee to have and the specific job outcomes that you would like the employee to achieve. The characteristics might be personal. For instance, maybe you have an employee who does a great job and is very competent, but doesn’t always dress well. This can be an issue with younger employees who have limited business experience and don’t understand that you don’t dress for work the same way you dress for a 9 a.m. physics class. Public speaking could be another personal characteristic. Maybe you have someone who is capable but doesn’t speak well publicly. Performance intervention would address these issues by coaching the employees on how to dress or how to appropriately speak in public.
On the other hand, you might want to address outcomes. For instance, there might be an employee who is not meeting sales targets. In this case, you would want to have a very specific outcome-oriented intervention to establish how he or she is doing the job, and how you can help him or her do better.
What are some pitfalls to avoid?
The number one thing is that employee interventions need to be positioned as a positive thing. The performance evaluation should be going on all the time, not just once a year. A number of years ago, Ken Blanchard wrote a book called the “The One Minute Manager.” This book is about catching people doing things right and doing things wrong and identifying them on the spot. If an employee is doing something really well, you should take a second out of your day to tell him or her what he or she did was really great. On the other hand, if you find someone doing something wrong, rather than making a note in a file and talking to him or her about it at their end-of-the-year performance evaluation, you should stop them right there and tell how he or she can approach the situation better.
Once in place, how should a system be evaluated?
If you’re doing good appraisals and intervening in performance problems timely and positively then you should have less turnover than you did before. The idea is that you don’t want to replace people. You want to get people into the organization, get them performing at a high level and keep them performing at a high level.
DON ST. CLAIR is vice president for enrollment management and marketing and adjunct faculty member of organizational leadership at Woodbury University. Reach him at email@example.com.
The blending of new technologies with an old-fashioned personalized touch is the hallmark of quality commercial banks in these modern times. A bank that doesn’t pay attention to your company’s individual needs no matter how many bells and whistles it offers probably isn’t worthy of receiving your deposits.
Of course, communication is a two-way street. To fully take advantage of a bank’s products and services, you will need to openly communicate your needs.
Forming a productive relationship with your commercial banker can pay huge dividends, says Joe Yurosek, senior vice president and regional group manager at Comerica Bank. “Establishing strong relationships with our clients helps us provide advisory-type services,” says Yurosek. “Once we’ve moved into a professional advisory role, we can anticipate our clients’ needs. Coming to our clients with new ideas provides them with more data to assess what they can and can’t do in the marketplace.”
Smart Business spoke with Yurosek about choosing a commercial bank, the importance of personal relationships and how a quality bank can help their client grow.
How should a company go about finding a good commercial bank?
The best way is to utilize existing, known relationships through referrals and references. This includes CPAs, attorneys and other business owners. Not only should you ask your contacts who they know, but you should ask specific questions. For example, How responsive is the bank to credit requests? How accessible are senior managers or decision-makers at the bank?
It is a combination of getting references from people you trust and asking the right questions that relate to your company.
What types of products should a quality bank bring to the table?
These days, pretty much all of the top-tier corporate banks provide full-service products. Some of the important ones include full corporate credit capabilities, cash management services, strong international capabilities and Internet-based cash management systems. Quality banks have invested heavily in developing state-of-theart software systems. Also, clients are looking for one point of contact, so they can use the relationship they develop for their private banking needs.
How important are personal relationships between a company and its bank?
They are very important. You want to build trust in any professional relationship. Speaking from the bank’s perspective, the more we know about the ultimate needs of our clients, the better we can provide an advisory role to our clients. This enables us to separate ourselves from other banks by becoming more proactive and less reactive.
What role does communication play in developing a positive working relationship?
You need good communication so that there are never any surprises for either the bank or for the client. Customers often want their bank to provide them with direction in their business investment decisions. The only way that both of us can know which direction we’re headed is open and frequent communication. This applies both when times are good and when they’re not so good.
How can a bank help a company develop and expand its presence internationally?
In terms of the global market, banks can help provide additional contacts overseas. We have banking contacts and a representative office in China, for example. Something as simple as providing a customer with contacts that are on the ground in a foreign country would help them assess whether they should be outsourcing production. Banks often have clients that they can introduce to other clients that have already produced products in a foreign country.
When it comes to helping customers expand, we are a wealth of information because we have significant contacts with customers and clients who have already done business overseas. Also, banks that have invested in people on the ground in foreign countries can provide customers with knowledge of the foreign local capabilities.
JOE YUROSEK is senior vice president and regional group manager at Comerica Bank. Reach him at (562) 590-2561 or firstname.lastname@example.org.
The agency recently released its top 10 list of most frequently cited standards in fiscal year 2006 (October 2005 through September 2006).
Companies can guard against accidents and OSHA citations by understanding the regulations that apply to them and implementing and managing programs to meet their needs, says Jim Kapnick, president of Kapnick Insurance Group. “Analyze the claims and incidents you’ve had, do walk-throughs and examine your operations. Then custom-tailor a program to those specific areas to maintain compliance,” he explains.
Smart Business spoke with Kapnick about OSHA standards, how to best identify and correct potential hazards and the importance of communicating safety standards to employees.
What were the most cited OSHA standards in 2006?
Falls have been a leading cause of occupational death for several years, so it is not surprising that scaffolding and fall protection were the top two most cited standards in FY 2006. OSHA standard 1926.451 requires employers to provide scaffolding at heights of 10 feet or more. OSHA standard 1926.501 protects construction workers working over 6 feet by providing rules for fall protection.
How do the cited standards vary by industry and company size?
OSHA cites the standards based on exposures. They prioritize the most significant exposures first because they want to provide the most impact for their inspections. For example, a steel forging operation is likely to get more attention than a restaurant, even though both have the potential for accidents.
The standards are based both on the industry and company size. A good example of this is construction. The construction industry represents about 4 percent of the work force nationally, but about 50 percent of workplace fatalities. The result is that there tends to be more inspection targeting construction and construction-related operations.
Targeting can be re-prioritized, however, which may affect smaller companies or less visible industries. In Michigan, there is a special-emphasis program on companies that apply spray-on truck bedliners, largely due to a worker inhalation fatality a couple of years ago. In this instance, these employers tend to be smaller mom-and-pop operations that otherwise might not have been targeted for inspections because of their size and their industry, but are now receiving enhanced focus.
How can a company best identify and correct potential hazards?
One of the best things that can be done is a formal safety program audit. This should be performed by an independent source; someone who can objectively look at what’s going on. It is easy not to see ‘the forest through the trees’ when you walk through your operations or review your program documentation.
Having a credentialed safety/loss control professional objectively examining the situation is often very helpful and can dramatically reduce your potential for fines and other losses.
How should an employer communicate with employees about safety standards?
The most important thing is that every new employee has a strong and well-documented orientation program that includes safety. Existing employees should be kept up to speed through ongoing refresher courses. As your organization evolves over time, you need to make sure that your employees are properly trained in safety issues, as their tasks or jobs change or are modified.
What resources are there for business owners about OSHA standards?
OSHA has valuable resources on its Web site (www.osha.gov) and also provides classes and consultation. Michigan is one of 26 states that has its own state OSHA plan, called MIOSHA.
In addition to compliance inspections, MIOSHA provides a wide array of consultative and educational services. The MIOSHA Consultation, Education & Training Division (CET) puts on seminars throughout the state, provides free on-site nonpunitive mock inspections and has numerous resource materials. Recently, the organization put together a safety training awareness CD-ROM that you can receive free of charge by visiting the Web site at www.michigan.gov/miosha.
JIM KAPNICK is president of Kapnick Insurance Group. Reach him at (888) 263-4656, x132 or Jim.Kapnick@kapnick.com. Kapnick is a member of Assurex Global, an international network of insurance & employee benefit brokers.
The term “green building” can be used to describe various aspects of a building, says Norm Bertke, managing director of asset services for CB Richard Ellis.
“Aspects of green buildings can include items such as the site that is chosen, the construction materials selected and the design of the asset’s infrastructure,” he explains.
Smart Business spoke with Bertke about green buildings, the financial benefits that can be achieved with them and how to get started in locating a suitable property.
Why are green buildings gaining popularity in the corporate world?
One reason green buildings are gaining popularity is simply the cost savings that can be associated with operating an efficient building. Efficient building systems result in lower consumption of utilities and, therefore, cost savings.
There is also data that suggests that because green buildings are often constructed to mitigate dust and other allergens in the indoor air and efficiently utilize natural light, the occupants are often healthier and happier than the occupants of non-green buildings. This leads to cost efficiencies for the occupants because of improved recruiting, reduced sick time and less turnover.
Finally, many corporations simply think that being green is the right thing to do and as long as it is at least cost-neutral, these corporations prefer to be green.
What are some of the financial benefits that can be realized from using a green building?
Green buildings often leverage the use of efficient systems to save on utilities. Variable-frequency drives offer an improved ability of the operator to control the heating and air-conditioning system. Flushless urinals mitigate the use of water. New light bulb technology allows the lights to burn more efficiently and last longer. Occupant sensors allow lights to turn off when the rooms are not in use. All of these items reduce utility consumption and lower costs.
However, the cost implications of lower turnover and reduced sick days can be much more significant. Many buildings operate at approximately $2 per square foot for utilities. It is reasonable to assume that it costs an employer $200 per square foot for personnel-related costs and that some sales professionals generate $20,000 per square foot occupied in revenue. If an employer can execute tactics via a green building to keep their employees on the job, the payback could be huge.
How do the costs of a green building compare to that of a traditional building?
This is a function of how green do you want to be and what kind of green? A certified building (one certified by the U.S. Green Building Council) can have almost no incremental cost if a green strategy is implemented from the conceptual phase. However, if the goal of being as green as possible is executed without factoring costs, the incremental costs can be significant. In other words, the technology exists, at a price, to build extremely efficient, environmentally friendly buildings, but there is a point of diminishing returns as it relates to a monetary payback.
How much can be saved on energy bills?
If an existing building is already efficient, sometimes there is little to no additional savings to realize. However, many buildings can achieve energy savings in the 10 percent to 30 percent range. In many cases, older buildings can be ‘recommissioned’ or set back to operate within their original design parameters to capture savings and the capital investment associated with new infrastructure investments is not necessary.
How has energy-saving technology improved over the past decade or so?
There have been technological improvements in the way HVAC systems operate. Variable frequency drives allow the operator to turn up or down the rate at which the systems run. Economizers allow building equipment to adjust their use of the environment by more efficiently using outside air to control interior temperatures. Lighting technology has also improved dramatically with the advent of low-mercury bulbs, electronic lighting ballasts and occupancy sensors that turn lights on and off automatically. In the realm of plumbing, low-flow, auto-flush valves and aerators allow building operators to decrease their use of water.
NORM BERTKE is managing director of asset services for CB Richard Ellis. Reach him at email@example.com or (614) 430-5069.
Each client in private banking has a relationship with his or her own private banker. Beyond credit needs, private-banking clients have available and may draw upon other specialists like securities/investments, trust services, insurance and financial planning.
Smart Business spoke with Mark Nakamaru, a senior vice president and group manager of private banking at Comerica Bank, about what types of services private bankers provide, how individuals and businesses alike can benefit and what factors to consider when looking for a private banking partner.
What are some of the services that private bankers provide?
Their primary focus is to address the financing needs of their clients, although in some cases, this extends to the businesses that they are associated with. Service-related companies such as law firms, CPA firms and medical practices are some examples of private banking businesses. Private bankers provide one-stop banking including customized credit facilities, a full array of deposit products, securities investments, asset management, insurance and financial planning. One private banking relationship manager can help deliver all the financial needs for both an individual and his or her business.
How can a company benefit from private banking lending options?
With any business, there is a need for a multitude of services and products. We provide a wide array of services such as traditional depository products, treasury management, merchant services and foreign exchange, to name a few.
Also, a company benefits from a private banker’s ability to customize service needs, as well as banking the principals of the company. Private bankers have the ability to underwrite, structure and approve loan requests in-house, providing quick decisions and customized loans for clients.
How do stock option loans work?
Let’s say a senior executive of a company has stock options that are coming due in six months. He has a tremendous opportunity today on an investment he wants to take advantage of. We can structure a loan for him today with repayment to come from the stock options he will eventually exercise. There is some risk to this. He may not want to exercise his stock options if the stock price drops below the strike price. But we will look for ways to mitigate this risk and structure this loan for him.
How can a company use a mortgage as collateral for a loan?
We can establish a line of credit for a business using the equity in the owner’s personal residence or commercial building as collateral. This may provide a lower interest rate and extended terms on the line of credit. A start-up company, for example, could benefit from this type of loan as it provides additional collateral.
The process to establish this type of loan mirrors the steps one would take to borrow individually for an equity line of credit.
What types of questions should one ask when looking for a private banking partner?
I would inquire about the approval process for loan requests. Does the prospective partner use loan centers for approval or does it have the ability to underwrite and approve loans in-house? There could be advantages or disadvantages with either, depending on your needs.
Another key issue is the lending limit of the bank. If it is a small community bank, there are restrictions as to how much money it can lend. A client who is looking for a large credit facility would not be well served by a bank with a house limit that cannot match his credit needs.
The lending experience of your private banker should also match your credit needs. A real estate investor, for example, should ask if the bank actively participates in this market. If so, your private banker should have the real estate experience to help facilitate the real estate loans you require.
Remember, all banks will tell you that they provide great service. Before choosing a bank and/or private banker, have a face-to-face meeting. The candidate should be quite convincing in its commitment to back up its claims.
MARK NAKAMARU is senior vice president and group manager for private banking at Comerica Bank. Reach him at (714) 435-3963 or firstname.lastname@example.org.
Nearly two-thirds of the U.S. population is considered overweight, and 5 percent of all Americans fall into the morbidly obese category. Excess weight substantially increases the risk of numerous health problems and is also associated with an increase in mortality.
Bariatric surgery is designed to help people fighting obesity improve their health by using surgical intervention. Although bariatric surgery can be an effective tool in weight loss, patients must also commit to long-term lifestyle changes.
“Bariatric surgery is ideal for people who are willing to take personal responsibility for their well-being,” says Dr. Amir Mehran, assistant clinical professor of surgery and director of bariatric surgery at UCLA Medical Center. “It really helps them as long as they are willing to help themselves.”
Smart Business spoke with Mehran about the types of surgical weight-loss techniques that are available, what eligibility requirements must be met and what the recovery process consists of.
What are some health risks associated with obesity?
Obesity is associated with several risks, including cardiac disease, high blood pressure, diabetes, hyperlipidemia and obstructive sleep apnea. There are also risks for malignancies such as ovarian, prostate, colon and kidney cancers.
What types of methods are available for the surgical treatment of excess weight?
Several are available. The caveat, however, is that none of them will work unless the patients change their lifestyle and eating habits before surgery.
The most common procedure is the Roux-en-Y gastric bypass, which has been done since the late 1960s. It has been shown to be quite effective with minimum number of side effects. Another available method is adjustable gastric banding. It is a newer operation whose U.S. results have been mixed. The biliopancreatic diversion/duodenal switch is a much more drastic and less commonly performed operation. It results in the most amount of mal-absorption.
Once again, however, if a person is not committed to the whole pathway of changing his or her life, nothing will work.
In order to have a surgery, what eligibility requirements must a patient meet?
The general eligibility requirements are based on guidelines set by the National Institutes of Health. Essentially, they go by body mass index, which is defined as kilograms divided by meters squared. People with body mass indexes over 40 are considered to be morbidly obese. If their body mass index is over 35 but they have other problems such as high blood pressure or diabetes, they are considered to be candidates for surgery as well.
People are generally between the ages of 18 and 65, although there is currently much debate about what to do with children who are morbidly obese. Obesity must have been present for several years, and patients should have been on several supervised diets in the past. They must also be free of any major psychiatric problems.
What are some possible risks and complications that can arise from bariatric surgery?
Speaking for the gastric bypass procedure, the mortality rate is roughly one in 500. The risks include intestinal leakage, which occurs in less than 1 percent of cases, and deep venous thrombosis in the leg with resultant pulmonary embolus, where a clot from the leg travels to the lung, which occurs in about less than 1 percent of all cases. Other potential problems include bowel obstructions, marginal ulcers and sagging skin.
How should a person decide if a surgery is the most viable option?
It’s a very personal choice. It has to be made with the help of family, a good social support system and a trusted primary care physician.
This type of surgery is really geared toward people who have tried everything else to lose weight. They’ve been on all kinds of diets and exercise programs and have lost a certain amount of weight. However, after a while they stop losing weight, get discouraged and gain all of their weight back plus an additional amount.
Once surgery is completed, what does the recovery process consist of?
For the laparoscopic Roux-en-Y gastric bypass, which is what we do at the UCLA Medical Center, the recovery time is roughly two to four weeks. Then during the first year or two, the patient needs to be followed closely with blood work done every three months. After that, a yearly follow-up is fine.
For the gastric bypass procedure, as long as patients take their vitamins and are watchful of what they do, the downsides are very minimal. It is critical to have a good primary physician who can follow their progress closely.
DR. AMIR MEHRAN is assistant clinical professor of surgery and director of bariatric surgery at UCLA Medical Center. Reach him at (310) 206-7235. For more information visit www.bariatrics.ucla.edu.
The enactment of the Sarbanes-Oxley Act of 2002 has spurred heavier regulation in the auditing industry. A new auditing standard, SAS 112, affects how auditing work is conducted. Among other things, SAS 112 redefines the types of internal control issues that are reportable.
Companies of all sizes need to be familiar with the new standard and its implications, says Wade McMullen, partner at Vicenti, Lloyd & Stutzman LLP. “Things that might not have been a problem in the past will now become a problem in terms of reporting on internal controls. The bar has been lowered on what is considered a significant deficiency.”
Smart Business spoke with McMullen about SAS 112, how the standard relates to business risk and how companies should prepare for it.
What is SAS 112?
It is a statement that Certified Public Accountants are required to follow on auditing standards. The statement, issued by the American Institute of Certified Public Accountants, gives auditors new guidance on how to communicate internal control matters. SAS 112 also provides some new definitions.
When does this auditing standard become effective?
SAS 112 becomes effective for financial periods ending on or after Dec. 15, 2006. For most businesses operating on a calendar-year basis, it would be effective for last year. For most nonprofit entities, it would be effective for this year.
What accounting procedures will change as a result of SAS 112?
It will make accounting procedures more important in terms of internal controls and the checks and balances that need to be implemented. Also, it’s going to affect the documentation of those procedures. In the past, documentation has been much more informal. Not everything was necessarily written down. Now, procedures need to be documented so that they can be reviewed by an auditor.
How does the new standard relate to business risk?
Worst case, this new standard makes it possible for a business to receive an adverse opinion on its financial statements if an auditor is unable to get reasonable assurance about effective internal controls.
But in general, with the new SAS 112 standard, internal controls are becoming a larger part of what is expected of businesses. Internal control issues will affect stakeholders’ opinion about a business, and more stakeholders might be interested in internal controls than were before.
How should companies prepare for implementing SAS 112?
First, they should talk to their auditing firm or conduct research about the new requirements so that they will fully understand SAS 112 and its implications. With the new standard, it’s now getting to the point of ‘what could go wrong’ rather than ‘what did go wrong.’ In other words, the possibility of a potential problem with internal controls could be nearly as damaging as an actual problem that is found. This can be combated by formulating an action plan that can be phased in over a number of years.
Also, a company should look at its financial closing process and examine what types of internal controls are in place.
Finally, the company should manage the expectations of insurers, creditors, rating agencies and board members (if applicable), and let them know about the potential issues that might arise from the new standard.
In what ways has the auditing process changed since the advent of the Sarbanes-Oxley Act?
More work is required to complete an audit. The amount of audit evidence that needs to be obtained is greater and documentation requirements are more stringent. Also, the new auditing standards are bringing all companies into a more regulated environment.
Sarbanes-Oxley started out primarily for public companies, but there has been a big trickle-down effect and now even private companies and nonprofit organizations are being affected. SAS 112 is another way in which the rest of the business world is coming into conformity with what has been asked of public companies with Sarbanes-Oxley.
WADE MCMULLEN is a partner at Vicenti, Lloyd & Stutzman LLP. Reach him at email@example.com or (626) 857-7300.
However, there are corresponding risks to the rewards associated with conducting business abroad. One potential hazard is not having a suitable insurance coverage and employee benefits plan in place for workers overseas.
“It’s important to really understand a global insurance program and not just rely on independent decisions in each country,” points out Jim Kapnick, president of Kapnick Insurance Group.
Smart Business spoke with Kapnick about insurance and employee benefits for companies doing business abroad.
How should a company go about implementing insurance coverage and employee benefits for workers abroad?
The important item to keep in mind when designing an international program is the need for strong communication. Insurance coverages and employee benefits differ greatly in each country and it is important to seek out strong local knowledge of the marketplace. Having a relationship with a local service provider can prove to be invaluable when structuring program design, compliance with local laws and regulations, and most importantly providing knowledgeable assistance in the event of a claim.
What are some of the logistical hurdles and how can these be overcome?
The two obvious ones are language barriers and time differences. The biggest logistical hurdle is the effective coordination of an international insurance program. It is important to have a centralized understanding of a global insurance program while still allowing for local (abroad) knowledge and servicing.
Too often, people do one of two things: Either they control the entire program from the U.S., which is not good since they don’t get local servicing and/or knowledge; or they let the operation abroad directly purchase the insurance and employee benefits, which is not a good idea because often the coverage limits are inadequate and it is not coordinated to protect the global company.
It is important to deal with an insurance/employee benefit adviser that has an established global network with formalized operating standards to assure proper understanding and communication of the program.
How has the Sarbanes-Oxley Act affected global insurance programs?
Sarbanes-Oxley has made management more accountable for understanding what’s going on. Too often, people with foreign locations take an out-of-sight-out-of-mind stance in regard to insurance and employee benefit placement. With Sarbanes-Oxley, you can’t do this because there is a responsibility for management to protect assets for investors.
Most overseas locations are very small just a salesperson or a couple of people abroad, so it is tempting to say, ‘It’s no big deal, let’s just let people take care of it locally.’ But it is a big deal because you’re subjecting the corporate assets. With Sarbanes-Oxley, somebody within the organization has to have a global understanding of the insurance and employee benefit programs being offered.
What factors should a company consider when analyzing its global employee benefits program?
Employee benefits are just that … benefits to employees that entice them to join or stay at a firm. In order to offer a competitive compensation package and attract and retain the best employees, one must have a thorough understanding of the local market.
In some countries, employee benefits are simply providing transportation, a uniform and lunch. In others it involves programs more typical to the United States. Also, in global companies there often are foreign nationals working on assignment in other countries. It is important to coordinate employee benefit package programs to determine which countries’ coverages will respond.
If, upon inspection, the program could be improved, what steps should be taken?
Every global program should be fully customizable; there should never be a cookie-cutter approach. In my opinion, the steps involved include discussing the corporate philosophy regarding ultimate control of the program and then evaluating the local service providers to assure that the improvements can be implemented properly.
How should a local service provider be selected?
One option is to do business with people who have an established network and have experts locally. Another way is to have your people in foreign countries seek out local representation with the understanding that information has to roll up through a master program.
JIM KAPNICK is president of Kapnick Insurance Group. Reach him at (888) 263-4656, ext. 132 or Jim.Kapnick@kapnick.com. Kapnick Insurance Group is a member of Assurex Global, an international network of insurance & employee benefit brokers.
The advent of dual-source CT scanners represents a significant step up in the evolution of CT machines. Designed with two X-ray tubes and two detector arrays, the dual-source scanner captures data nearly twice as fast as previous scanners.
The dual-source CT scanner is ideal for cardiac imaging, says Stefan Ruehm, M.D., Ph.D., associate professor of radiology at UCLA Medical Center.
“It’s a rather noninvasive diagnostic tool that allows a physician, with a very high negative predictive value, to determine whether or not the patient has coronary artery disease,” he says.
Smart Business spoke with Ruehm about how the new scanner aids patients and doctors alike and what further developments he expects to see in the early detection of heart disease.
How does the dual-source CT differ from earlier CT scanners?
The main difference is that it’s about twice as fast as the previous generation of scanners known as 64-slice CT scanners. The dual-source CT has two X-ray sources and two 64-slice detector arrays as compared to the previous generation, which had just one X-ray source and one detector with 64 rows. There has been a development of CT technology from one row of detectors to four rows to 16 rows to 64 rows. The latest development, as seen in the dual-source CT, is putting two 64-row detectors into one scanner.
What advantages does the new scanner offer patients?
It is particularly well suited for cardiac imaging because it provides very fast data acquisition. If your data acquisition times are too long, you will end up with images that show motion artifacts. You want to have a very small window to collect data during your cardiac cycle. The big advantage of the dual-source CT is that it nearly doubles the speed that you can acquire data compared to the previous generation of scanners. You could do cardiac CT with the previous machines; however, you had to use beta-blockers to decrease the heart rate. With the dual-source CT you don’t need to give beta-blockers, you can scan patients independent of the heart rate.
How does the noninvasive nature of the dual-source CT scanners aid doctors?
In the past, if there was a question about coronary artery disease, you would have done a catheter angiogram study. In a certain percentage of patients, you would have done the study for diagnostic purposes because you would have seen on the invasive angiogram that there is no coronary artery disease. This process is not very beneficial to the patient because it’s a rather invasive procedure and if you do it just for diagnostic purposes it’s not appropriate. There has been a need for an alternative, and it appears with the dual-source scanners that you can get diagnostic information concerning the coronary arteries in a far less invasive manner.
How useful is the dual-source scanner in helping to identify medical problems at an early stage?
The main goal is to detect coronary artery disease at an early stage and to adapt certain therapeutic strategies. You want to do this early, because with certain medications, you can prevent progression of coronary artery disease. The problem so far has been that people were reluctant undergoing the types of invasive procedures that were previously available. With this technique, we have a rather noninvasive tool to detect coronary artery disease. If there are signs of disease, patients can undergo medical treatment at a very early stage and prevent further progression or complications.
In the future, what further developments do you expect to see in the early detection of heart disease?
One further development focuses on the exact and objective grading of the degree of vessel narrowing. However, it has been shown that the degree of the narrowing of the coronary arteries does not predict the likelihood of a cardiac complication.
What appears more important is the characterization of the plaque that causes the vessel to narrow. There may be a change of paradigm away from the quantification of the degree of the narrowing, or stenosis, towards the characterization of plaque.
In general, there are two different types of plaques: unstable and stable. The unstable plaques are regarded as dangerous while stable plaque is usually calcified plaque. With the invasive, conventional angiogram you can only see the stenosis, but you can’t tell anything about the vessel wall itself where the plaques develop. With these new cross-sectional techniques, you can quantify the degree of stenosis. Eventually, we hope to differentiate between a dangerous plaque and a stable plaque.
STEFAN RUEHM, M.D., Ph.D., is an associate professor of radiology and director of cardiovascular CT at UCLA Medical Center. Reach him at firstname.lastname@example.org or (310) 825-0958.