WILLIS CEO PLUMERI SAYS TRUST CENTRAL TO ECONOMIC RECOVERY; CALLS ON BUSINESS TO COMMIT TO TRUE TRANSPARENCY
In Chicago Speech, Plumeri Says Only Accountability, Openness Will Restore Trust
Continue to Refuse Contingent Commissions, Plumeri Vows
CHICAGO, October 29, 2009 – Joe Plumeri, Chairman and CEO of Willis Group Holdings Limited (NYSE:WSH), the
global insurance broker, called on corporate America today to embrace a new commitment to transparency and
risk management to restore trust in business and the U.S. economy. Plumeri proposed four steps to
re-establish that trust, which he said is necessary to support sustained economic recovery and real growth.
In a speech to the Executives’ Club of Chicago, Plumeri pointed to respected public opinion surveys that
show Americans now have less faith in business to do the right thing than after the
Enron scandal or the dot-com bust. He urged business leaders to reject the opaque transactions and
“lip service” transparency of the past in favor of a new commitment to accountability and openness.
“True transparency means being up-front with our various stakeholders – whether they’re shareholders, clients, partners, employees or
the communities in which we do business – and explaining what’s in it for them and
what’s in it for us. It means educating them in a clear and straightforward way about
the risks and opportunities so they can make informed decisions based on their best interests,” Plumeri
said. [The full text of the speech, as prepared for delivery, can be found here.]
To restore trust, Plumeri called on businesses to: 1. Create a real contract with their customers and
address conflicts of interest in the way they do business; 2. Elevate risk awareness at the
senior executive and board levels and embrace comprehensive Enterprise Risk Management; 3. Voluntarily disclose the risks
they face and their levels of insurance coverage; and 4. Do a better of job of
explaining to the American people the positive role of business in society and the economy.
“Senior executives and company boards need to take a far broader and more comprehensive view of risk
than they currently do and reflect this in their decision-making and oversight. Companies should move to
hire Chief Risk Officers and establish Risk Committees on their boards. They should demand true Enterprise
Risk Management because they need it now more than ever before. The fact is that the
risks of doing business are increasing – and they’ll continue to increase,” Plumeri said.
Plumeri urged businesses to manage conflicts of interest transparently and resolve them in the interests of their
customers. As an example, he pointed to contingent commissions – payments from insurance companies to brokers
based on the volume or profitability of business placed with clients – which remain a major
source of conflict within the industry. “Many in our industry believe that simply telling clients that
they are taking contingents makes it ok. I disagree. With contingents, telling your clients you take
them does not resolve the conflict,” he said.
In October 2004, Willis became the first insurance broker to refuse to accept contingent commissions from insurance
carriers when working for retail clients. Regulators later banned the major brokers from taking such commissions.
Willis also established a Client Bill of Rights – a 10-point contract with clients codifying the
company's commitment to client service, transparency and best practices.
“In my own business, a time could soon come when Willis and its big three competitors will
be allowed to take contingent commissions again. One big insurance broker has already been given the
green light by the insurance regulator here in Illinois to do just that. And New York-regulated
brokers may be able to do so as well,” Plumeri told his audience at the Fairmont
“We’ve already decided at Willis that we’re not going to go back to the old ways –
we’re looking to the future and we will continue to put in place the measures that
will enhance trust and transparency, not undermine it. It may mean that Willis will be the
only company not taking contingent commissions – but that's ok with me,” Plumeri said.
Willis Group Holdings Limited is a leading global insurance broker, developing and delivering professional insurance, reinsurance, risk
management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around
the world. Willis has more than 400 offices in nearly 120 countries, with a global team
of approximately 20,000 Associates serving clients in some 190 countries. Additional information on Willis may be
found at www.willis.com.