Page 4: Risk management
Risk management is a process that attempts to identify and understand specific risks within the business, and to identify the cost of reducing or eliminating those risks.
The BOC Group faces both direct and indirect risks. Direct risks arise from the business’s core operations and may come from:
- environmental incidents, such as greenhouse gas generation or the production of
- health and safety incidents affecting a range of groups both within and outside a plant.
Indirect risks follow on from direct risks. They include damage to a firm’s reputation and the adverse media attention created by a high profile incident. Companies with poor accident records may run the risk of losing favour with investors and of finding it hard to raise funds. These are also indirect risks.
Within The BOC Group, managers have the key responsibility for safety and for environmental management. Their performance is measured and evaluated, for instance by how they minimise waste in the use of energy. In recent years, The BOC Group has invested heavily in extending safety measures and in improving environmental performance. As a result, accident rates have been falling and the Group’s production and distribution processes have become increasingly efficient.
The BOC Group operates in some 50 countries. Each country has its own statutory regulations for health, safety and the environment which may or may not overlap with UK and EU requirements. Additionally, different cultures and languages provide further challenges. Although The BOC Group provided policies and manuals that took into account the local geographies, conditions and regulations of operations within each country, the different interpretations and systems had the potential to cause confusion.
Adopting best practice
The solution to this problem is ‘best practice’. BOC decided to integrate all of its policies and manuals and to go beyond the statutory requirements of each country in which the Group operates. This involved establishing global teams to create best practice standard benchmarks that would bring all operations to the highest possible levels. The movement towards best practice meant doing more than simply complying with regulations and training employees in safety, health and environmental management. It meant coaching and training employees to give them a much deeper understanding of the issues involved. The aim was to influence the hearts and minds of BOC employees so that working safely and protecting the environment became second nature to them. Employees in all of BOC’s businesses underwent a competency-based training programme that enabled them to perform work-related activities to high-specified standards.