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2-6-13 Managing cyber threats and other church risk
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The average cost per breach is $3.7 million
 

Jan. 31, 2013 Silver Spring, Maryland, United States

 

South America will soon be the biggest region of growth for Adventist Risk Management operations, and more emerging markets should follow, the company’s CEO says.
 

ARM President Bob Kyte is also urging those in developed regions to keep their policies current and protect the church against a new threat: cyber theft.
 

 
ARM CEO Bob Kyte says church organizations need cyber liability coverage. In an interview, he discussed emerging threats and business management. [photo: David Fournier]  

The company is now embarking on an education campaign on the need to better protect against data breaches. In 2011, some 23 million confidential records were exposed through more than 414 reported security breaches, according to the national nonprofit Identity Theft Resource Center, a 44 percent increase in the number of records exposed the previous year. The average cost per breach is $3.7 million.
 

ARM’s 130 employees oversee risk management and insurance coverage for roughly 95 percent of Adventist organizations in North America, and they work with the 12 other world divisions.

Kyte, a 59-year-old native of Canada, became president of ARM in 2010. The longtime business executive and lawyer started out as a business manger for a former pro hockey player who owned restaurants and a hockey club.
 

Following law school, Kyte became president of the Adventist Church’s Pacific Press Publishing Association and later served as general counsel to the Adventist Church world headquarters. He has also worked as general counsel for a high-tech health education organization before accepting his current post.
 

In a recent interview, he discussed emerging risks and managing a company that protects the assets of the Adventist world church. Edited excerpts:

Adventist News Network: What do you most want a modern church leader to be aware of?
 

Bob Kyte: We’re always examining areas that need new protection, and right now one of the biggest risks for the church out there is cyber liability. With ARM’s leadership there are a total of two organizations that have this coverage. Church organizations need it. It can be anything from a lost computer to having private personal information stolen through hacking. Otherwise, the cost of complying with the law for notification and follow-up is very high.
 

ANN: You direct the company to make goals for a year in advance. Why not, say, five years?
 

Kyte: Everything is changing so rapidly with today’s technology and economic climate that I’m not sure the goals you set for one year are even accurate. More and more companies are focusing on the shorter term – though not from a standpoint of governance. There are still strategic priorities, but many are cutting back to six-month and three-month goals.
 

ANN: Why do you maintain a presidential blog?
 

Kyte: I strongly believe in communication. You cannot over communicate. Technology today demands transparency in all organizations, including ARM and the church. When I was growing up we heard about the Vietnam War once a week on TV when they flew the newsreels back. Now war takes place live on your mobile device. So with business, I take the view that there is very little you shouldn’t share with your employees. Obviously there are some personnel issues or other sensitive things that you wouldn’t, but we share every month the company’s finances and what the challenges are. On the blog I often share where I’m traveling for work and what I plan to do.
 

ANN: What’s your biggest challenge now?
 

Kyte: Our biggest challenge is finding competent professionals who would come and work for ARM. We’ve had a number of openings, for example now in our technology area. It’s somewhat easier to find accountants, but it’s even a challenge there. It’s also difficult finding Adventists experienced in insurance intricacies, such as underwriting. 
 

ANN: Why are you putting such a big emphasis on customer service?
 

Kyte: Obviously we want to offer competitive prices, but we’ve been focusing more on service because people only buy insurance for one thing: their claims. No one buys car insurance because they like buying it. It’s for the fender bender. The proof of the insurance organization is how they treat you when the fender bender occurs. We began offering a 24/7 hotline about two years ago, and managers have set up protocols on how fast they will respond to a claim – which is very fast.
 

ANN: No one’s perfect. How do you handle it when a management decision needs to be adjusted or redone?
 

Kyte: My philosophy – which I’ve expressed to employees – is if you never make mistakes you aren’t trying enough new things. I don’t think that there’s any position I’ve been in where it’s not an ongoing learning experience.
 

ANN: You’ve hired some young vice presidents: 35 years old and 29. Would they have those kinds of opportunities in other countries?
 

Kyte: I would hope they would, but I’m not sure they would within church structure. My experience in working outside the church in several organizations – one of which was a high tech environment – was young people are managing these companies. I also became a vice president working in church structure at a young age. I became president of Pacific Press when I was 34. So to have a vice president who’s 35 and another VP, a woman who’s involved in our technology issues who will turn 30 soon, doesn’t phase me at all. I find it refreshing to work in an organization where our management team goes from age 30 to age 50-something. In hiring I look for expertise but also aptitude and attitude, which are critically important.
 

ANN: How have mentors helped you?
 

Kyte: One point that always comes through: they entrusted me with a lot of authority and a lot of accountability that went along with it. The very first guy I worked for, he entrusted me with a lot of leadership in his company when I was only 17. Far more than I would have invited. It was not a big business, but I had my own key, I was opening and closing the business for him. He taught me to trust people. One thing we’ve been doing here is moving the decision-making further and further down into the company, and that’s important to me, rather than having everything flow to the top of the company.
 

ANN: What would you say as a guest lecturer for an undergrad business class?
 

Kyte: I think a lot of people come out of college with very high expectations of what they should be able to do when they graduate. My advice is find a job, even if it’s entry-level, and really show what you can do. The best way to show it is with results. As important as education is, to get ahead in a company, get in there and really show what you can do and be a team player.
 

ANN: What is unique about ARM in the church?
 

Kyte: ARM has the challenge of operating in a business-like way but still performing a ministry.

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Ansel Oliver/Adventist News Network
North American Division of Seventh-day Adventists
12501 Old Columbia Pike
Silver Spring, MD 20904-6600 USA
Telephone: 301-680-6400
Fax: 301-680-6464
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