Jack Hampton recently talked with Paul Buckley, vp, risk management, with Tyco International (US) Inc. Jack was curious as to Paul's view of the March 13 article in Business Insurance covering Tyco's "pull" system for governance and ethical behavior.

First, a little background on the kind of risk manager needed for an enterprise risk management program. Paul joined Tyco in May 2003 after 29 years in the Bell system, finishing as risk manager of Lucent Technologies. He received many awards while at AT&T and Lucent, and he was named Risk Manager of the Year in 2000.

Q: In 2002, following Securities and Exchange Commission investigations of accounting improprieties, Tyco's former chief executive officer, L. Dennis Kozlowski, was indicted (in mid-2005 he was convicted of fraud, conspiracy and grand larceny). What was it like when you joined Tyco after the scandal broke?

A: It was the right place to be from a risk management perspective. We had a new board--totally new. Your article states all 125 headquarters personnel were replaced. I do not know if that is true, but we did have many new senior executives. Ed Breen (who became Tyco's CEO in 2002) was bringing good people into a refreshing environment. I had no reservations at all leaving the Bell system after all those years.

Q: Can you tell us more about the "refreshing environment?"

A: Ed Breen, Jack Krol (board member and retired chairman and CEO of E.I. du Pont de Nemours & Co.) and everyone else on the board or in top management wanted to do it right. They set a tone from the top of the house. We would not have even the appearance of compromising behavior. We would ensure accurate financial reporting and be perceived by all as an open and honest company with total integrity.

Q: What did the new environment mean for "risk management"?

A: Big changes. Previously, risk management activities--buying insurance, processing claims, loss control, etc.--took place in each of Tyco's five business segments. This all changed. We developed a centralized risk management strategy and used coordinated programs to drive down costs, implement a new return-to-work program and otherwise bring all units together in unified programs. One really big change was that we moved from sort of an advising approach to a functional role. This is a key element in our efforts.

Q: How did your new system affect relationships with brokers?

A: Changes were made and relationships continued. We use four brokers at present--Marsh, Aon, Willis and HRH. We move programs around, recognizing the special skills and strengths of the broking community.

Q: Any final words?

A: It has been a pleasure to be associated with the top talent in the finance community, such as Martina Hund-Mejean (senior vp and treasurer of Tyco International Ltd.), (retired Tyco CFO) Dave FitzPatrick and John Davidson (Tyco senior vp, controller and chief accounting officer), and the new CFO, Chris Coughlin. The learning environment was exciting and the support from my direct line of senior management was exceptional, and I would not be as good of a risk manager had it not been for this experience.

Read the Tyco article from the March 13 issue here.

John J. Hampton, the KPMG Professor of Business and Director of Graduate Business Programs at Saint Peter's College in Jersey City, N.J., writes a column in Business Insurance on Emerging Risk Strategies. He specializes in business ethics, legal liability, and enterprise risk management. He is a former executive director of RIMS. Readers are invited to share their observations in online discussion forums at www.BusinessInsurance.com or send e-mail to jhampton@spc.edu.