'If it can happen...!'
Roger Bibbings, RoSPA's Occupational Safety Adviser
As from this year, listed companies on the UK Stock Exchange must start reporting on their systems for ‘internal control’, following recommendations set out in the ‘Turnbull Report’ published in 1999 by the Institute of Chartered Accountants of England and Wales. Turnbull, which builds on previous reports on corporate governance - including Cadbury, Greenbury and Hampel (Combined Code 1998) - advances the notion of ‘holistic business risk management’ and is being commanded by Government as a set of sound principles for corporate governance of risk.
The range of risks to be addressed is of course very wide - most obviously risks associated with financial decisions but including risks to reputation, environmental risks, risks to health and safety, anything in fact which can adversely impact business continuity and reduce shareholder value.
Towards Best Practice
In this context it should be noted that the Health and Safety Commission too are seeking to catch the Turnbull tide by challenging the top 350 companies and all public bodies to meet minimum standards for reporting on their occupational safety and health (OS&H) performance in annual reports. (They are also drawing attention to RoSPA’s ‘Towards Best Practice’ report which advocates a more in-depth approach to performance measurement and reporting.)
Although OS&H is only one of about a dozen significant business risk headings, it is interesting to note how many senior OS&H advisers or others from an OS&H background are being asked to lead Turnbull in their organisations. Stuart Emslie, for example, a long term member of the UK Institution of Occupational Safety and Health (IOSH), gave a fascinating ‘key note’ presentation at the recent IOSH conference in Bournemouth on the ‘Controls Assurance’ programme in the National Health Service. This covers a vast range of risk issues including such areas as hospital acquired infection, clinical negligence, food poisoning, security and accidents to patients.
Corporate Risk Management
Corporate risk management is coming of age and not before time. Yet, with tragedies such as BSE, train crashes, foot and mouth, not to mention on-going political scandals, why, one might ask, has Government itself been slow in developing an holistic approach to policy governance of major risks facing UK plc as a whole?
Looked at from a business perspective one might ask: what is the policy, what is the process, and who is driving it?
There are many reasons why Government has yet to adopt the same systematic ‘quality loop’ approach to risk as the major corporates. The UK is a much bigger and more diverse entity than any company. It is a market economy in which the levers of control available to the State are often much less direct than the levers available to senior management in even the largest enterprises. Long term rhetoric about safety often sits uneasily alongside short term political realities.
One is also bound to ask questions about the general level of ‘risk literacy’ among senior politicians and policy makers. Too many people in public life, for example, are still to be found in the media talking about accidents as unforeseeable, exceptional events. Liberal use of terms such as ‘freak accident’ in the immediate aftermath of disasters continues to contrast with the findings of subsequent investigations and public enquiries which invariably show not only how they could have been foreseen but how easily they might have been averted by simple preventive measures.
Accidents are not unnatural events but highly natural. The world is pregnant with possibilities for error and harm. Every system has within it the potential for chaos and disorder. The fact that there are not even more accidents is testimony to our relative success as individuals, organisations,or as a society to anticipating error, putting controls in place or mitigating consequences when things do go wrong. But rarely are control systems watertight.
The enquiry which must eventually follow into the present foot and mouth tragedy - with its enormous economic and psychological costs will no doubt show risk management failure on a massive scale. There will clearly be questions to be answered about the adequacy of (and response to) risk assessment, including not only routes and probabilities of exposure of the national herd to the virus but the consequences of its dissemination via livestock traffic and other means of transmission. Already, reports are coming to light which suggest that important questions about the adequacy of the regime for protecting our farming industry had been raised but not acted on.
Although OS&H is seen as only one relatively minor heading on the overall corporate risk menu, it has potentially much to contribute. It covers just about every form of economic activity, it has a long history and, because it focuses on an area of human activity where things are managed more systematically and with its greater resources, expertise and political commitment, it has been something of a laboratory for development of general principles of risk management. HSE, as a ‘key player’, has, for example, done much useful work aimed at stimulating a more rigorous, risk based approach to policy making at national level.
Tolerability of risk
Last year they sought to reinvigorate public debate on the ‘tolerability of risk’ with their document, ‘Reducing Risks, Protecting People’. This summarised developments in their thinking on some of the main issues involved since these were first set out in their evidence to the Sizewell ‘B’ public enquiry under Sir Frank Layfield in the early eighties. Two years ago they published a report from the ‘Interdepartmental Group on Risk Assessment’ (ILGRA) which attempted to compare various approaches adopted to risk assessment by different Government departments. And more recently they have published a discussion document on their approach to regulating ‘higher hazards’ such as nuclear and major hazard plants, railway safety and so on.
The latter debate is important, not just because of the need to continue to develop thinking about risk based decision making and regulation based on safety cases’ but because it offers a further opportunity to review arrangements for the risk policy governance at the highest levels of Government. General lessons distilled from HSE’s accumulated experience in regulating risks have much to contribute to ensure stronger risk management regimes in other, quite different domains. In short, HSE have a key role to play in promoting general education on safety and risk concepts from classroom to cabinet’.
Learning from accidents
Moving on from risk assessment, for example, HSE could play an influential role in co-ordinating an Interdepartmental Review of approaches to learning from accidents through a comparative review of approaches to investigation. (This is in hand partially in relation to transport but needs a much wider focus.)
One major question raised in ‘Controls Assurance’ is that of ‘competence’. At corporate level more testing questions will be asked in future of directors' understanding of risk. How much more important therefore that Ministers and senior public servants should be called to account to show that they have a practical grasp of key safety and risk concepts. Risk as probability of harm moderated by consequence; ‘the precautionary principle’ (giving those exposed the benefit of any scientific doubt), ‘defence in depth’; the ‘hierarchy of preferred approaches to risk control’ (elimination, reduction, isolation, control, adaptation); risk/cost optimisation; and so on. A simple questionnaire aimed at a balanced sample of senior figures and testing understanding and application of these ideas might yield interesting (if not disturbing) results!
Nearly five years ago, in its report ‘Health and Safety at Work: Options for future progress’, RoSPA highlighted the importance of good risk information in enabling the health and safety system to foresee and respond quickly to new issues. Besides a new approach to co-ordinating health and safety research, RoSPA put forward the case for establishing a national (if not international) consortium of risk assessment centres capable of rapid exchange of information and of effective collaboration on joint projects. In addition to providing input to policy making, such a consortium would be able to promote the development of new risk assessment techniques and would be charged with identifying significant risks before major accidents and health tragedies actually happened.
In the light of many of the more recent disasters in the UK, such a network of specialists charged with ‘thinking the unthinkable’ is more urgently needed than ever before. At one level such an exercise might be seen by many politicians as ultra pessimistic navel gazing feeding public anxiety, already perceived to be nearing meltdown. On the other hand, if there is one major lesson to be learned from disaster enquiries of all kinds, it is the need to be systematically proactive in anticipating what could go wrong and more rigorous in assuring ourselves that our control measures are adequate. Senior politicians could do worse than remember from time to time the old aircraft designer's adage, ‘if it can happen, it must not matter, if can matter, it must not happen!’
Roger Bibbings, MBE is the Royal Society for the Prevention of Accidents Occupational Safety Adviser who advises the Society on all matters related to work related risk and helps it expand its contribution to the British ‘health and safety system’. Current policy development projects include: promoting a management approach to occupational road risk; strengthening the role of accident investigation in health and safety management; promoting health and safety in small firms using professional business advisers; integration of health and safety into business education; meeting the health and safety needs of minority ethnic communities; In 1990 he received the MBE for his services to occupational safety and health. He was, for seventeen years until 1994, health and safety adviser at the Trades Union Congress. He is a Fellow of the Institution of Occupational Safety and Health and a Registered Safety Practitioner.
This article first appeared as Parting Shots in RoSPA's Occupational Safety and Journal, June 2001.