geoff hoad

NATIONAL CONFERENCE & EXHIBITION 2014

Platinum Sponsor

Silver Sponsor Bronze SponsorRisk Manager of the Year

Award Sponsor

Conference and Exhibition Partners

WORK HEATH & SAFETY

EXPECTATIONS OF ENTERPRISE

RISK MANAGEMENT

OCTOBER 2014

GEOFF HOAD, DIRECTOR WORKPLACE HEALTH AND SAFETY

Strictly confidential Page 3

WHEN TONY HAYWARD BECAME CEO OF BP IN 2007 HE VOWED TO MAKE SAFETY HIS TOP

PRIORITY.

IN 2010 THE DEEPWATER HORIZON OIL RIG EXPLODED AND 11 LIVES WERE LOST.

IT CAUSED THE WORST MAN MADE DISASTER IN HISTORY.

Photograph AFP/Getty Images

• If managing safety is all about managing risk, then why does risk management regularly overlook

safety?

• Safety is often absent on the risk radar.

• Risk Managers take different approaches to Safety as an element of risk.

• Avoidance (Not become involved).

• Reduction (Assume the risk is being managed by someone else).

• Sharing (Check that insurance is in place for Workers Compensation and Public Liability).

• Retention (Accept and include in the organisation’s risk register).

“Nothing is more important to us than the safety of our

people”…. Really?

Enterprise Risk

Financial Risk

Market Risk

Operational Risk

So Where Does It Fit?

• It depends upon the organisation’s risk

outlook.

• If the focus is very broad, it can get missed as

being ‘too detailed’.

• Enterprise, Market and Financial Risk rarely

include the consequential losses associated

with Safety.

• Operational Risk seems logical but too often

“Operation” refers to the technical nature of

the business and the business continuity

issues related to business disruption.

• In short, there is no easy place to include

Safety in the Risk Pantheon.

• In enterprise risk management, a risk is defined as a possible event or circumstance that can

have negative influences on the enterprise in question.

• Safety is the judgment of risk. Something is judged safe when the risk is deemed acceptable, it

does not mean that there not any risk, just that the risk can be mitigated or controlled to an

acceptable level.

• Many corporate cultures support risk taking, especially when there is a compelling financial

opportunity.

• Disasters happen from flawed ways of doing business that permit risks to accumulate.

• Believing that past non-events predict the future (“Forgetting to be afraid”).

But What Could Go Wrong???

Take The Test

Risk Insight &

Transparency

Risk Appetite Risk Related

Decisions

Think “Titanic”.

Unsinkable ship so no

need for lifeboats for all.

Drive down into the

detail.

What else is necessary

beyond what we are

doing?

Risks omitted because

they don’t fit the

organisational approach

to identification of risks.

If a risk is “Operational,

or Financial” then what

does that really mean?

Risk Management is not

intuitive.

• Explore a wider range of risks, don’t be constrained by what you have always done.

• Evaluation of the organisation’s true risk position, have you covered all the potential exposures?

• Quantify the real consequences the risk presents.

• Map risks across the business and understand that they will vary according to the business unit.

• Recognise the risk and don’t normalise the result.

• Consider Safety as a risk issue. You may not decide it is important enough a risk to include, but

evaluate it anyway.

Enough Already!

What Do You Want Us To Do?

• Remember, the worst outcomes happen very rarely, but they do happen.

• The consequences will go further than you could imagine.

• Causes are not singular – Think Air Crash Investigation.

• Judging and making decisions can be flawed.

Conclusions

Thank you.

NATIONAL CONFERENCE & EXHIBITION 2014

Platinum Sponsor

Silver Sponsor Bronze SponsorRisk Manager of the Year

Award Sponsor

Conference and Exhibition Partners

geoff hoad

Economy & Finance