The Local Church is the Hope of the World – And Must Lead in Every Community’s Shift Away from Misconduct

Published in InSight Spring 2019

The Gallagher Team | Religious Practice | Peter A. Persuitti, Managing Director

Much has been written about the #ChurchToo ‘movement’ emanating out of the broader community and the #MeToo tsunami. Taking into account the associated organizational risks, we would like to carefully parse the terminology of ‘misconduct’ and address the role of the Church at the center of this reform, a transformation that is so raw and yet so necessary if we are to see the church once again become a source of strength and morality in the public square. We are hearing calls for a culture of transparency and accountability in this once trusted cultural arena. And we have some recommendations on how to move forward.

A paradigm shift

“Social pressures for a fair and equitable work environment have been building over the last few decades, with anti-harassment emerging as a vital issue. From the #MeToo movement spotlighting sexual harassment in the workplace to, Inc. spending millions to amend gender and racial pay gaps, workplace respect has become familiar front-page news. Contributing to this trend’s momentum is the growing rate of millennials in all workforce roles, including leadership positions. Gallagher Research shows that they prioritize fairness and corporate social responsibility as the most important employer attributes. 

One interesting dynamic at the center of this debate has been the cavalier use of the word ‘misconduct’ as a ‘catch-all’ expression.  In the insurance world, we have to be very careful as we are seeing underwriters and claims professionals blur child sexual abuse and sexual harassment, or just broadly define it as misconduct.  It is important to distinguish between these forms of misconduct:

Child Sexual Abuse – Adult on Child
Peer Child Sexual Abuse – Child on Child
Sexual Harassment – Adult on Adult at Work
Adult Sexual Misconduct – Adult on Adult 

An important nuance in today’s misconduct hailstorm involves aligning these claims under the correct coverage form. For example, child sexual abuse would fall under a Sexual Misconduct Form, and sexual harassment could fall under a D&O and / or Employment Practice Liability Insurance (EPLI) form.

Liability – Coverage, Forms
Tony Abella, Sr., Gallagher Religious Practice National Director

The insurance industry has initiated significant changes due to the recent increase in sexual harassment claims.  Until 2009, coverage for this type of incident was frequently part of the multiple ‘unnamed items’ included within the overall General Liability definition.  Restricting endorsements related to Employment Related Practices Liability started showing up around 1998. However, it was 11 years later that the insurance industry recognized sexual harassment as a specific risk requiring separate treatment.  The basic endorsement introduced in 2009 treats harassment as a distinct risk that requires independent underwriting considerations and should be preferably accepted only on a claims-made basis. This is a result of the multiple claims for sexual misconduct that occurred many years before and was only presented decades later by the injured party. 

While coverage is available today, for most it requires specific disclosure of steps taken to prevent a loss, especially if prior records indicate a history of multiple incidents.

There are state variations where the basic form has been adapted to comply with local laws.  Prompt reporting of any known or potential incidents is required to ensure coverage will adequately respond.  Limits are typically aggregated although large increments and are available at a price.  

Another significant new approach has been to attach both Employment Practices and Sexual Harassment coverage to free standing D&O policies, although we believe it may be more cost effective to seek this coverage as part of a master package that includes at least property & liability whenever possible.
Claims Experience – What are we seeing?
Tony McLaughlin, Gallagher Bassett Services, National Director, Religious Practice

Since the disturbing occurrences within the US Gymnastics, Michigan State University and the publication of the Grand Jury Report in Pennsylvania that identified a significant level of historic clergy child sexual abuse in the Catholic dioceses, there has been an uptick in child sexual abuse claims and inquiries.  Many organizations are scrambling to locate historical insurance coverage information in an effort to transfer the financial obligation and avoid significant legal cost, which may, or may not, be avoidable. 

In many states, community-based organizations, boarding schools and faith-based institutions are creating “voluntary compensation funds” in an effort to allow individuals who claim to have been abused, to come forward and negotiate directly with a committee that has the authority to conclude any claim they deem credible.  Coordinating voluntary efforts with any potential carrier is a must and comes with challenges.  Beyond identifying all historical coverage, and due to the sexual abuse crisis championed by the #metoo movement, local churches must take immediate steps to ensure their culture does not support misconduct. 

Reviewing policies and practices is critical as you can find yourself in a defensive position should something surface that catches you unaware. Compliance is moving to commitment.  To think “it can’t happen to me” would be a great mistake in this current climate.  Leaders of organizations must ensure they have adequate coverage, encourage the reporting of any form of misconduct, take every report seriously, and take steps to ensure they are creating a safe workplace environment.  

In summary, there is no question that we are seeing spikes in reporting of claims from both of these societal ills – child sexual abuse and sexual harassment. Corporate America may trend differently, but churches should take notice. In the words of our global management liability managing director, Dr. Phil Norton, in the 2/20/19 issue of Insurance Business Magazine, “ A hard market looms for directors and officers (D&O) liability insurance. The back end of 2018 saw a dramatic re-focus on underwriting discipline as carriers continue to combat record numbers of class actions and increasing numbers of “event” based claims. These are triggered from things like missed earnings, cyber breaches and sexual harassment or discrimination in the workplace.”

HR Policies & Best Practices
Phil Bushnell, Gallagher Health & Welfare (taken from our Gallagher 2018 Human Capital Insights Report), National Director, Religious Practice

Fairness and equality are elemental to the local church’s mission to be a welcoming place for followers – employees, volunteers and donors. The emphasis on these attributes needs to be part of a broader movement toward creating a culture characterized by respect. Churches that place a high priority on reviewing their current practices and realigning them as needed are better situated to make a difference and be that beacon to all. 

There is clearly a relationship between engagement and retention. Research shows a true ROI when there is a respectful workplace and worship space.  “Improving engagement by just 1 point on a 6-point scale can trigger a 66% reduction in voluntary turnover!”  

There are three key areas to focus on as a church adopts practices that demonstrate stronger respect for staff, volunteers and the broader community:

Organizational Assessment
Improvement begins with an introspective look at how well your church policies and culture promote a respectful environment. Offering insights on redefining internal goals and uncovering opportunities for resolving challenges, also helps ensure compliance with varied municipal, state and federal regulations. A culture assessment helps the local church weigh the merit of potential changes by giving it a sense of how the behaviors, values and attitudes of individuals affect those in the organization. An analysis of HR can identify ways to more closely align its strategies with the organization’s goals. And a comprehensive HR checkup measures improvement needs across all of the department’s functions.

Clergy, Manager, Employee and Volunteer Development
Training is essential to reducing or eliminating incidents of discrimination, harassment and retaliation. Customized training, which may include a range of methods, helps the local church adopt best practices that fit its unique cultural challenges. Individual coaching increases overall awareness, drives behavior change, provides perspective and informs day-to-day strategies for developing more productive relationships.  

Personality and behavioral self-assessments, such as the Myers-Briggs Type Indicator and the DiSC Profile, support employee and manager self-awareness. Through leadership communication style assessments, clergy and managers can further boost their self-awareness and gain deeper insight on how to best engage with others based on each person’s preferred style.

Group training facilitates discussion and dialogue among leadership or employee volunteer teams. Activities include thought-provoking questions, sharing real-life examples and role-playing to drive collaboration. Group training enhances professional development while aligning individual goals with team objectives.

Other Risk Management Considerations
A deliberate approach to creating a respectful environment starts with the two “R’s”: recognize and & report. After all, the damage that might result can destroy a church and its community. At a minimum, it demonstrates to the entire community that related matters are taken seriously and backed by effectively written policies for immediate intervention. Also, the local church gains a defense in the event of a discrimination, harassment or retaliation incident or claim. Ensuring fairness and compliance with these policies helps mitigate risk:

o Anti-harassment / bullying policies
o Reporting procedures
o Definition and communication emphasis on what constitutes harassment and discrimination
o Performance management and rating
o Promotion and pay increases
o Developmental opportunities

Process, procedures, training and communication work together to prevent harassment, discrimination and retaliation, and should be aligned with your church’s goals to improve engagement.  When the community shifts from rectifying reactively to minimizing proactively, there emerges a culture of respect that promotes the message of the Gospel – trust, wellbeing, productivity, loyalty and stewardship.

Group Expertise and Leverage – Church Polity
Neil Davidson, Historically Black Church Broker at Gallagher

One of my focuses as a broker and program administrator is to leverage group recognition of risk and to make self-regulation a community effort. We use technology strategically, for example, to move from compliance to commitment.  All member churches within the connection have to adhere to all policies spelled out in the Book of Discipline - for each African Methodist Episcopal and Christian Methodist Episcopal denomination. The policy defines sexual misconduct by clergy, staff appointed or elected officers, and volunteers within the church, and describes the procedures for reporting, responding to and investigating complaints of sexual misconduct and harassment.  The term “sexual misconduct” is the comprehensive term in this policy to include sexual abuse of children or adults, rape or sexual assault, and sexual harassment.

Implementation of the policy includes the following: 
1. Education and Training
All those trained are required to sign a statement certifying that they have read, understood and agreed to comply with the Policy.
2. Background checks and due Diligence
3. Program Liability and Insurance Leverage
        • Greater buying power and uniformity of coverage with group purchasing enhances commitment and lowers costs.

Nuances on Policies & Training
Dr. Steven Dranoff, Psychologist, President of D&D Consulting, Inc. and Gallagher Partner 

Most harassment policies and training programs are outdated and ineffective, designed with a singular goal of avoiding legal liability. A more positive approach is to create a culture based on transparency, accountability, high morale and productivity.  Dr. Dranoff goes on to say “There is a rational reason why the more we train, the less we gain in eradicating all forms of harassment.  Practically speaking, no matter how clear the courts are, how unambiguous the employer’s anti-harassment policy is or how vigorously HR professionals try to enforce it, the promulgation of logical rules is not an effective method of controlling employee behavior.”

Training is not working because it fails to take into account the fundamental psychological facts of harassment.  Researchers have demonstrated in study after study that employees experience hostile work environment harassment in unique ways, many of which are counterintuitive. It is not a ‘bright line’ determination. Two people who are exposed to the same situation may perceive it quite differently. We learn from the research that psychologically it is not the severity or pervasiveness of the harassment behavior itself that is most predictive of how employees will react. It is how the employee perceives the behavior.

Let’s look at some caveats regarding why traditional training in HR or legal compliance cannot possibly be effective in reducing all forms of harassment.  Merely telling employees what harassment is and what to do about it does not help them to make sense out of what they perceive.  And this is what psychologically drives their behavior. 

Dr. Dranoff concludes: “We are led to one inescapable conclusion:  The key to eradicating all forms of harassment lies in helping the community (clergy, staff, volunteers)  evaluate their personal perceptions in order to learn where they are in misalignment with the organization’s policy so that they can change their community-based interactions in ways that promote self-protection.”

As you can see, this truly is a pivotal moment in our history as a people and a remarkable opportunity for the church to lead in committing to fostering cultures of respect.  Society needs the influence and insights of the local church as a partner and key player in righting these wrongs.  Consider two key insights coming out of from Dan Busby and ECFA (“15 Trends For Leaders to Expect In 2019” that speak directly to this issue:

More ministries will embrace the importance of excellence in governance. The partnership between the board and the organization’s top leader, care in choosing board members, even more care in choosing the board chair, and the commitment to prayer and discernment are just a few of the 2019 emphases for ministries. And yes, I would say this even if ECFA were not conducting 10 Forums on Excellence in Governance in 2019. Stay informed about the Forums at 

Boards are increasingly sensing the importance of self-assessment. Peter Drucker said “Self-assessment is the first action requirement of leadership: the constant re-sharpening, refocusing, never really being satisfied.”8 And the same is true of governing boards. New online self-assessment tools are coming from ECFA in 2019, making board self-assessment easier than ever: ChurchBoardScore and NonprofitBoardScore. 

Gallagher is a global firm with a deep specialization in serving the Church through its Religious Practice  - across the world with more than 31,000 employees and 750 + locations.