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Dec 31, 2008

Human capital

Unfortunately the world is becoming more dangerous - are you protecting your company's human capital when employees travel overseas?

Identifying and employing the best corporate directors and senior executives is an extremely difficult task, and one that is only likely to get harder. It is surprising, therefore, that many companies are failing to do all they can to ensure the most important assets of all, employees, are safe and healthy.

Everywhere we look it is obvious that the world is rapidly becoming smaller. International business travel is a matter of course for the modern executive and, even with tough times ahead, many employees will be traveling extensively to ferret out new business, meet with clients, check on projects and make sure subsidiaries are running efficiently. Apart from just sending employees, many companies now require members of the board to visit factories and overseas facilities as part of their familiarization process. In fact, as directors are held to ever-stricter standards, many are making demands for such visits.

For most people who travel extensively on business, the process is relatively routine. But no matter how many times you have been through it, travel outside your home base holds inherent risks. Tragically, these risks have been starkly and horrendously highlighted by recent hotel sieges, bombings and kidnappings around the world.

Although kidnapping and accidental death (as a result of military or terrorist activity) may stand out for very obvious reasons, there are many other potential risks for which the corporate traveler must prepare. Illness, injury, loss of property, delay of arrival/departure and even detention by local authorities are more common yet potentially very serious problems. Even a simple case of food poisoning can result in an employee being unable to work, making the trip an expensive and embarrassing waste of time and money. Shareholders and regulators do not take kindly to companies wasting money, especially now, on things that are largely avoidable.

Safe travels
So what can a company do to ensure its employees and directors arrive safely, remain in good enough health to complete the task they were sent to do and return home with minimal additional cost or interruption?

One increasingly popular option is to employ the services of a specialist training firm. Once the territory of former military and secret service agents, the employee travel risk advisory business has boomed in recent years and now includes a range of firms offering everything from simple travel, hygiene and dining tips for the first-time business traveler to counterespionage and kidnap prevention techniques for those heading to particularly high-risk areas.

Simon Dorset, director of business development at Pilgrims Group, a travel training and security firm based in the UK, explains that ‘corporate management have a duty of care to deliver a safe and healthy working environment to all employees. Many companies are failing to do this at the moment.’ The requirement to provide a safe working environment has existed for a long time and is a law in most developed countries. However, liability under this rule increased, at least in the UK, with the release of the new Corporate Manslaughter and Corporate Homicide Act.

According to Dorset, an increasing number of individuals are requesting training, and in many cases the courses are paid for and facilitated by their employers.

Courses do not need to be complicated. (See ‘Types of executive training courses’, .) Many people are happy to receive professional advice on trip planning and preparation. ‘This can be as simple as knowing who will be picking them up, at what time and how and via what route they will get to the hotel/office,’ explains Dorset.

One area that many people have probably never considered is where they stay within a hotel. Safety precautions suggested by executive travel risk training providers include never selecting a room above the seventh floor. Why? In most places, the seventh floor is the maximum height of fire or emergency services ladders. Conversely, a guest should not stay on the first or second floors because these provide much easier access to thieves, muggers or terrorists.

These simple tips can be helpful in all locations, but disturbingly, many countries pose far more serious risks and for this reason Pilgrims Group and other firms offer more intensive training regarding how to avoid kidnapping. Methods include not always taking the same route, understanding local trouble spots, dressing so as not to stand out in a crowd, always knowing who your driver is, who you are meeting and what they look like, and staying aware of the exact location of offices.

Beyond training employees, companies should also have a disaster recovery plan, explains Dorset. ‘A company should consider various scenarios and have answers for questions like: How would we expatriate a sick or deceased employee? What services are available on the ground locally for coverage? What is our policy in event of a kidnapping?’ He also stresses ‘Understanding these potential outcomes and having a well-defined policy ahead of time will save the company cost, time and reputation damage.’

As travel responsibilities increase and the likelihood of instability continues to mount, it is important for individuals and companies to ensure they are well prepared for any outcome. Apart from being sensible, it is also good business practice.

Brendan Sheehan

Brendan Sheehan is the former Executive Editor at Corporate Secretary magazine, and is a leading expert in public company governance and compliance. He regularly lectures on cutting edge governance, risk and compliance issues and is a regular...