What’s the point of assessing integrity? On the face of it, it’s to have evidence that your senior people understand what integrity means and how it should be delivered. And while there is some value in that, it’s not the point you should be aiming for. This week’s post looks at the hurdles that an off-the-shelf assessment of integrity will encounter, and then sets out how your approach to integrity can be framed to side-step them.
Integrity assessments are on the agenda of many a UK insurance firm at the moment. New regulations expect assessments to form part of how senior insurance people are recruited, monitored and rewarded. And in response, many an insurance firm will put its senior people through a nice afternoon of talks, activities and assessments. It will be convivial but misplaced.
I say convivial, for everyone attending such afternoons will do so in the conviction that they are themselves persons of integrity. Who wouldn’t think so?! So, many of them will be sitting there, knowing it’s something they have to do, but also thinking that it’s rather a waste of time. They’re all good people after all.
And yet the evidence for most misconduct in corporate settings is that misdeeds are not down to bad people doing bad things, but down to good people making bad decisions. This means that there’s a noticeable gap for some people between how good they think they are, and how good some of their decisions turn out to be.
The point of assessing integrity is not to show good people what good decisions look like, for they believe their decisions are good ones already. The point of assessing integrity is have those good people challenge themselves around the integrity of their more questionable decisions.
So forget about the typical ‘present and test’ type assessment. It gives you an evidence trail, but not the one that a savvy regulator wants you to be following. You need to be looking at the situations in which those good people face integrity challenges. And this should link through to the responsibilities those good people are accountable for. It means looking at the poor outcomes that those situations can sometimes generate and, working backwards, finding the decisions that were influencing those outcomes and what is causing them to be less ethical than they should be.
And it is there that you have the problem your assessment of integrity needs to address. Show people how to fix that problem not just next time, but on a recurring basis, by knowing for example how to make more ethical decisions. Integrity, and the trust that goes with it, will then start to rise. You will also find that there are some quite natural metrics around that problem to show how progress is being made.
You can see from this that a good measure of what assessing integrity adds up to, is not working out how much you know about integrity, but how good you are at showing the type of leadership that builds integrity within your firm. Integrity is just as much about ‘us’ as it is about ‘me’.
I’ve sat with good people in senior roles in big insurers, listening to the importance both they and their firm put on integrity. Yet in something like pricing, they have also felt unable to rein back the pricing practices they knew upset their customers. I would be told that it was now something everyone else was doing, and so they had to do so too. I could have delivered weeks of integrity training and assessments in such circumstances, and I’m sure they would all have performed wonderfully. Yet it would have had little net effect on the outcomes that counted as ‘integrity’ to their customers.
What they resisted then, and are realising now, is that the focus should have been on those aspects of their ethical culture that were sustaining that resistance to change. Pricing practices have undermined the integrity of the insurance market. Right now, senior people shouldn’t be doing integrity assessments. They should be learning more about leadership on ethics, and how to deliver more of it in their firm’s approach to pricing. This action orientated approach is assessed on the outcomes. After all, that’s what the regulator has repeated said the new accountability rules are all about. And it is through the outcomes being experienced by customers that trust in your firm is built.
Duncan is the founder of the Ethics and Insurance blog and the author of its many posts. He's a Chartered Insurance Practitioner, having worked 18 years in the UK market. As an adviser to many firms on ethics issues, as well as a regular conference speaker, he is one of the leading voices on ethics and insurance.