Flag Waiver? NCCI Reverses Policy

Even during the best of times, a bad management decision can pretty quickly tarnish a corporate reputation. During a national crisis, however, the damage can occur in a matter of hours.

Just ask managers at NCCI Holdings Inc. The finance department of this not-for-profit company is cited in the September issue of CFO magazine for its high score in a quality of work life survey (see "Good Work"). But now the company has been pilloried in the press—and especially through Internet outlets and angry E-mail exchanges—for enforcing a policy that prohibited workers from displaying the American flag in their offices.

The controversy started when as many as five NCCI employees were said to have been ordered home by the company last Friday. The workers placed American flags on their desks in response to Tuesday's terrorist attacks on the World Trade Center and the Pentagon, and resisted when managers told them the flags had to go. According to one source, another employee stayed at her office after agreeing to remove her father's military medal from her desk.

Executives at the Boca Raton, Florida-based NCCI, a workers' compensation specialist, would not confirm or deny that it sent any employees home on Friday. Corporate communications chief Mike Bullard, however, disputed an account in the Saturday edition of the Palm Beach Post stating that flags had been "confiscated." Rather, "all we ever did was ask people to take things down," he says, adding that he believed managers had American flags removed from fewer than 10 offices.

Not surprisingly, reports of NCCI's Friday actions quickly spread on websites and television news, provoking readers to send angry E-mail messages to media outlets, including CFO. At a company assembly yesterday morning, and in an afternoon press release, CEO Bill Schrempf apologized "for not permitting [employees] to display the American flag on Friday during the national Day of Prayer and Remembrance." Employees arriving at work were also offered both flags for their cubicles and red-white-and-blue lapel pins.

In his initial message to workers following the bombings, Schrempf had reiterated that company policy was to ban "statements or actions, or political or religious discussions, and anything else that could be divisive or mean different things to different people"—including office flag displays.

The seven-paragraph E-mail also noted that NCCI supported the day of prayer, a disaster-related blood drive, and United Way contributions. Schrempf also expressed shock over the terrorist attacks. But it was the flag prohibition, of course, that stirred employees and drew media attention.

Bad Policy Trumps Good Deeds
CFO Alfredo Guerra, whose department did well in the work-life component of CFO's Best Workplaces for Financial Professionals survey, says that none of the 125 finance and administrative-services employees reporting to him had displayed a flag on Friday or had been asked to leave. He also says he had participated in a weekend meeting of the company's senior management team, along with three division heads. At that meeting, the decision was made to permit displays of the flag.

Asked if he now considered the old policy misguided, Guerra replies "absolutely," adding that "it was not written with the events of last week in mind." The effect of the negative publicity on NCCI was "dreadful," he adds, because the company has gained a name for its community involvement in programs like Habitat for Humanity, the United Way, and the Red Cross.

Indeed, in the workplace survey in CFO, finance employees praise NCCI's management for its dedication to outside volunteering, along with such amenities as a new company fitness center, day-care facility, and Starbucks coffee bar.

"Our reputation has been tarnished," notes Guerra. "Hopefully, this change in the policy, and our more forthright position on displaying the flag, will change things.

More Than a Political Symbol
The no-flags ruling originally was intended to help promote diversity and tolerance in the workplace by barring symbols that might cause dissension. "But the American flag is more than that," points out Guerra, noting that company policy still prevents other symbols, like the flags of other countries and campaign material, from being displayed by employees. "The only thing we have now rightfully allowed is the use of the American flag," he notes.

The workplace survey in which NCCI participated was established earlier this year by the 14,000-member Association for Financial Professionals and Hackett Benchmarking & Research, along with CFO magazine. The survey involved employee questionnaires about workplace conditions and was intended not as any award contest, but to establish a system for tracking best workplace practices in finance departments. It was designed primarily to help companies benchmark their performance against the accomplishments of others.

CFO came in for its share of criticism, too, for having cited NCCI for its quality of work life—even though the article appeared two weeks before the September 11 terrorist attacks. "Shame on CFO," wrote one reader. "How could you blunder as you have with NCCI?… [Real quality] would allow for the display of patriotism after these tragic events."