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The Future of Health Risk at Workplace

In Uncategorized on March 20, 2020 at 11:23 am

The people-centric workplace is known for its good profits and higher growth. In contrast, many organisations favor progress of corporate scorecard inattentive to its impact on employee health scorecard. What is the future of health risk at workplace? Let’s understand this by some examples.

Hilton (USA) has been ranked at the number one workplace in Fortune 100 Best Companies to work for 2019. Hospitality at its core, Hilton offers one of the best guest services due to its unique team members. The company is a firm believer in investing in employees and team development for its best services. Clearly, Hilton is not in the business of social services; the differentiating factor is its unique strategy to serve customers. In 2019, Hilton generated approximately 9.5 billion dollars in revenue, significantly up from the last year (8.91 billion US dollars). The power of word of mouth for friendly staff and safe working environment worked wonders for the company. Words spread automatically by people, whether it is about employment conditions or customer service. Indirect benefits for low expenditure in advertising and enhanced brand building are, in general, not accounted in any balancesheet. This is all about creating an eco-system for higher performance of employees, but what about the wellbeing of employees.

workplace safety

Two years back, the impressive statement of Ex-Chairman of Sundaram Fasteners (part of the $7.2 billion TVS group) at annual conference of Entrepreneur Café at Chennai made a mark: an organisation is growing when its employees are growing along with corporate success. For example, buying a new house, education of children, their certification, and promotion. To sum up, employee associates their wellbeing with the company’s prosperity like a family. The value of an organisation should be imbibed in employee’s day to day life.

A few years back, when I was studying at University of Edinburgh Business School for my Ph.D, I came to know the concept of green footprints of business school. On average, students were used to walking more than 5 miles per day which is a far distant aim for students in India. They are working day and night to secure good marks and placement. Same is happening at corporate level. I observe very rarely attention is paid to student green footprints or employee footprints. Issues related to Cardiac arrest, blood sugar, obesity, and depression are at an all-time high. Recently, I have visited a few academic institutions and found many professors and senior executives are dying suddenly due to cardiac arrest and cancer, leaving all personal and corporate responsibilities in the lurch. That gives me an idea about the possibility of linking a healthier workplace and healthier lifestyle with a corporate scorecard in the future?

A recent attempt was the development of Worksite Health ScoreCard by CDC to establish benchmarks and track improvements (evaluation) over time. The aim was to assist employers and business coalitions to create healthier workplaces. Simultaneously, state or local health departments also can use the tool for monitoring worksite practices and track improvements in worksite health promotion programs over time to more effectively direct resources to support employers.

This idea can be utilised for not only to fulfill work and safety regulation, creating a better eco-system, but also for discounting insurance premiums and for preventive healthcare by state and national health insurance bodies such as Modicare in India or Medicare in the US. Though low cost, high access, data aggregation are an added advantage of this new approach, however, there could be some concerns related to the privacy of employees and misuse of data by companies. Nowadays, many companies are offering free health check-ups, dispensaries, along with medical insurance to their employees as a part of facilities in overall salary.

Nonetheless, issues in healthcare at the holistic level are still in silos. Health authorities at the state and national level are clueless, how to improvise quality of healthcare, increase access, reduce cost with an overall aim to improve health and wellbeing of society.

Imagine a different situation, when employers and states are no more able to handle the rising healthcare cost burden anymore. Insurance companies are also over-burdened and forced to charge so hefty premium that it may become unaffordable for the large population. What are the possibilities to deal with such kind of risk? Another situation, if a state knows that 75% of healthcare cost is due to preventable chronic conditions such as heart disease, cancer, stroke, chronic obstructive pulmonary disease (bronchitis, emphysema), and diabetes, what actions they should do?

Our corporate actions have great social impacts. Personal health is closely linked with Corporate HealthCard. Similarly, global Pandemics like COVID-19 present a live example about how social health risk is linked with our personal health risk. Management of health risk is essential for business. Good physical, mental, corporate and social health would be a performance driver in the future.


Loeppke, R., Edington, D. W., & Bég, S. (2010). Impact of the prevention plan on employee health risk reduction. Population health management13(5), 275-284.

Investment in a start-up is not a child’s play

In fraud, General, Risk, Uncategorized on September 24, 2019 at 3:25 am

80% -90% of Start-up businesses fail in the first few years of operations. Given this data, investment in a start-up is not a child’s play. Being a Ph.D. in risk management and having studied large institutions where the failure rate is far lesser, I was always intrigued about how angel investors calculate the risk of start-ups to make an investment decision. At the same time, it would be equally difficult for start-ups to convince the investors for their potential and ability to perform.

Recently I visited the University of Southampton for my research and met an interesting lady who was an angel investor with enormous funds to invest particularly in Ghana. My questions became specific as I heard the word ‘Ghana’. Why an angel investor wants to invest in Ghana only? What motivates her to take such a decision. Very soon, the lady revealed the reasons: one by one setting a story. She taught me investment risk in a unique way, which I cannot forget lifetime.

The lady had seven children, five dogs and two visiting foxes living with her in a beautiful house at London along with her husband, who was a medical practitioner. She said, “if you are a mom/dad, it is easy to understand what an investment in a start-up means. Consider your child as your angel investment and marriage of child as an exit for the investment. Investment in Ghana was not a new idea as for a parent from Ghana just wanted the child alike”.

Similar to a promoter-based company, when you invest in your child, it is full of optimism while if it is for others (start-ups), many times, investors are not that optimistic. The concerns are raised about principal risk, return risk, valuation risk, and many others. A company may not fail to deliver the promised product or fail. The returns will be variable in frequency, time, and amount. The main difference between the two situations is about trust why people tend to trust their own child than others.

Most often, start-up makes a mistake in demonstrating why investors can trust them and those who can demonstrate, most often receive the investment. To maintain that trust, they are required to answer some what if questions of angel investors which deals with risk management.

What is new about start-up: is it a product or a service? What is the start-up target market for the product? What if you don’t find a market for your product?

How will you make your product/service profitable? Show your business plan. What are the business objectives? What if you will face issues related to higher expenses, delays in projects, labor problems, license issues, stiff competition, and testing of the product.

What if you require funds over its existing cash resources to develop market capabilities?

How is management planning to execute the business for viability and success? What if you find that management is not enough experienced and expert in dealing with it?

 How you will manage fraud, and what are the controls? What if you find that the company’s management team is involved in fraud?

Further, I met another start-up business CEO who received large funding from angel investor by just showing how he can prepare the best British tea. Angel investor asked the start-up CEO how you will address the need of the British being Indian? He argued that he knows British culture, and taste better than British and can offer a British Tea. If he likes it, he will give him funding, if not, it’s okay. Eventually, he got the funding.

Investment in start-ups requires a fair understanding of the risk management and particularly two major aspects: how to develop trust and ability to answer what if questions. Remember, trust is developed first for the team; the product comes next. It is well said,

The first-rate team with a second-rate idea will always outperform a second-rate team with a first-rate idea.”
― Brian Cohen


Governance @ Distance

In board members, corporate governance, Finance, fraud, General, Management, Uncategorized on April 5, 2019 at 1:12 pm


Transparency, higher commitment, and independence are buzz words for good corporate governance. The role of independent directors plays an important role in Corporate governance to keep an eye on the board activities to flag off non-promoter group issues. However, the challenge is neither the independent directors get appropriate compulsory training to understand their roles and responsibilities in an organisation nor the appropriate data promptly to act upon effectively. Board has a limited duration to understand and reflect on issues. Sometimes the independent directors are from different industries and are not able to understand the context and indulge in granularities, though, diversity of thoughts may add significant value. Governance at distance is often seen where the board chairman leads the discussion and independent directors often distant from reality less engaged in a discussion.

According to recent Board Practice Report by Deloitte Centre for Board Effectiveness and Society for Corporate Governance, almost 80% of board members think that their primary focus is on company strategy, 42% attributes risk oversight as important and 29% focuses on board selection. To sum up, strategy formulation, risk oversight and board selection are three important roles of board. In this blog, I will talk about the issues related to the first two.

In the current business environment, the markets are turbulent more than ever. World over, not only regulators, every stakeholder such as partners, and creditor are accusing board if anything goes wrong in governance. Social media and newspapers have abundant stories of poor risk governance. A board strategy cannot be the same in normal, turbulent and crisis situations. Strategic change has become important for companies. Punjab National Bank (PNB) in India has recently faced one of the biggest frauds in history, and within a short period, the company’s board needs to change the strategy of the company to address the crisis. Not only the fraud affected the PNB strategy, but it also impacted the strategy of other banks in India and the global market. The strategies perfectly working in normal market conditions may not work in crisis situation. Are companies’ board trained and prepared to handle how to change the company’s strategy in normal, volatile and crisis situations?

Post-2008 crisis, the role of the board in enterprise-wide risk oversight has become challenging. No specific training is provided to the board to refresh their knowledge on the subject. Many companies still don’t know what are their key risks and issues in the management of risks. Surprisingly, directors don’t know their roles and responsibility in risk oversight. Understanding the inter-connectivity of risk is the next big challenge, and a very few companies are able to link risk management with strategy and compensation system. How the board of directors perform their duty in overseeing the executive decisions and how compensation structures and practices drive an executive’s risk-taking. Many such questions need to be answered.

Let us understand the logic of why the understanding of risk is paramount for the board for effective corporate governance. Shareholders want a higher return for higher risk and vice-a-versa. One of the roles of the board is to define the risk appetite (the amount and extent of risk the company is willing to take as promised to shareholders) in the company. The informal approach of risk management will bring several surprises in the organization and may hinder the fulfillment of organisational objectives. To deal with the situation, the board needs to effectively oversee the organisation key risks holistically and disclose them to shareholder at appropriate times so that value at risk can be calculated. The only quantification of risk exposure will not suffice; the quality of risk-taking directly impacts the profitability of a company. Quality of risk profile also needs a significant attention. Balancing the risk while adding value to the organisation is only possible when risk management is well understood by board, implemented in a formal way and linked to the organisational strategy.

I strongly believe that the board should get a refresher course or a certificate course to carry out their duties effectively. Governance at a distance is not working. Categorization of risks in market risks, operational risk, and strategic risk has become bizarre and mundane.  Helicopter view of risk for oversight has become unacceptable as stakeholders want to understand what were the key risks of the organisation last year, whether risks are increasing or decreasing and the reasons behind them. Higher interaction and participation of the board by probing questions will certainly enhance the current state of governance. Higher engagement of the board is the key to good governance.