Nov 102016
 

This is the nightmare scenario for every company and every manager working in areas such as construction, warehousing, engineering – indeed in any sector where medium to high risk activities are being carried out.

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Something has gone wrong; an employee has been injured (or maybe even killed); and somebody from management has got to start sorting out the mess. You’re the manager everybody’s looking at, but where do you begin?

As with other emergency situations, such as fire, it’s vital that you’ve already considered your options and drawn up your response plan BEFORE things go wrong (trying to develop an emergency plan as the crisis unfolds is never a good idea!) Having a plan gives you a framework in which to operate and allows you to keep control of things rather than letting matters descend into chaos.

Of course, developing emergency plans can appear to be difficult. It’s never pleasant to think about people being hurt or killed, and that emotion is understandable, but just because a task is unpleasant doesn’t mean you can simply shy away from it. Running a successful company in a responsible way involves facing difficult problems head on and then dealing with them effectively. And safety management – accident response planning – is no exception to this general rule.

One challenge which needs to be overcome is the perception that managing a serious accident is somehow impossible. Certainly there could well be a range of issues all needing to be handled at the same time, from dealing with the casualty to making the area safe to thinking about potential legal repercussions to …. the list can seem endless. But managing things is not impossible if you have a carefully designed plan to guide you.

The first step in designing any response plan is for senior managers to gain an understanding of what is involved, and this is achieved by a programme which takes them logically through the whole business of accident scene management – from an overview of the legal framework involved, through the collection of evidence which could be vital in building the company’s defence to any health & safety charges, to techniques for taking witness statements and analysing the evidence.

This understanding can be provided by means of a suitable training course, and can then be reinforced by further workshop sessions at which the managers can discuss – in complete confidence – exactly how they can design a response plan which meets precisely the needs of their organisation.

If you feel your organisation could benefit from such training and workshop programmes then please contact BoardPlus to set up an initial, free – and confidential – discussion of your needs.

About the Author

andy-farrallAndy has his own health & safety practice, Management & Safety Training Ltd, and is a highly experienced consultant and trainer (including accreditation with NEBOSH both as a tutor and examiner). He is an accredited accident investigator and is qualified in both the health & safety and training sectors.

A Fellow of the International Institute of Risk and Safety Management (FIIRSM), a chartered safety & health practitioner (CMIOSH) and a member of the UK Occupational Safety & Health Consultants Register (OSHCR), he has a proven track record in fields as diverse as accident investigation, lone worker safety, construction safety, and health & safety training.

Prior to moving into the field of health & safety management he was a specialist investigator with two élite UK law enforcement agencies (including taking responsibility for the management of complex international fraud enquiries).

 

Nov 102016
 

I was recently asked by a colleague whether there was any evidence that the Sentencing Guidelines for health & safety offences, which came into effect in February 2016, were actually having an effect.

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I replied that they were, and pointed to a couple of recent sentencing decisions to reinforce my point.

However, since that discussion the evidence is becoming even clearer, and now there can be no doubt that sentences for health & safety breaches are getting heavier. This is such an important point for managers to consider that I think it’s worth revisiting the topic in a bit more detail.

Let’s begin with the case of Baldwins Crane Hire who were sentenced in December 2015 following a fatal accident. In this case the brakes on a 130-tonne mobile crane (maintained by Baldwins) failed due to poor maintenance, the vehicle crashed and the driver was killed.

When sentence was passed the Guidelines had yet to take effect so Baldwins were sentenced under the “old” system. They were fined £700,000 for corporate manslaughter.

Let’s contrast the Baldwins case with a couple of recent sentencing decisions. It’s important to note that, unlike Baldwins, neither of these cases involved the charge of corporate manslaughter but instead involved breaches of health & safety legislation.

First we have the case of engineering company Parker Hannifin Manufacturing Ltd. An employee was engaged in moving heavy machinery within the factory when the machinery overturned and fatally crushed him. It was found by the HSE that the task had not been properly planned and so the company were prosecuted for failing to have a proper risk assessment and for failing in their duty of care to the employee (but, let us be clear, they were not prosecuted for corporate manslaughter).

Parker Hannifin Manufacturing Ltd were fined £1 million for these safety offences.

Now let us turn to the case of Merlin Attractions Operations Ltd, the operators of the Smiler ride at Alton Towers.

On 2nd June 2015 a car on the ride collided at speed with an empty carriage which had stopped on the track. Engineers had overridden the safety systems in the mistaken belief that there was a computer error. There were numerous casualties, and two victims had legs amputated as a result of their injuries. However, thankfully there were no fatalities.

The company had pleaded guilty to health & safety failures at a previous hearing, and accordingly was fined £5 million for what the Judge described as a “catastrophic failure” in their health & safety management systems. The Judge also indicated that had they not pleaded guilty but instead had been convicted following a “not guilty” plea and a trial then the penalty would have been a fine in the order of £7.5 million.

So, the picture is clear: within months we’ve gone from a £700,000 fine for corporate manslaughter to a fine of £5 million for an accident which caused serious injuries but didn’t actually cause fatalities (although it could easily have done so).

Health & safety fines are going up, and of that there can be no doubt. Hence any manager who still thinks that health & safety is some sort of optional extra, or (worse) is willing to treat fines for breaching health & safety simply as a business overhead is riding for an extremely unpleasant fall.

 

About the Author

andy-farrallAndy has his own health & safety practice, Management & Safety Training Ltd, and is a highly experienced consultant and trainer (including accreditation with NEBOSH both as a tutor and examiner). He is an accredited accident investigator and is qualified in both the health & safety and training sectors.

A Fellow of the International Institute of Risk and Safety Management (FIIRSM), a chartered safety & health practitioner (CMIOSH) and a member of the UK Occupational Safety & Health Consultants Register (OSHCR), he has a proven track record in fields as diverse as accident investigation, lone worker safety, construction safety, and health & safety training.

Prior to moving into the field of health & safety management he was a specialist investigator with two élite UK law enforcement agencies (including taking responsibility for the management of complex international fraud enquiries).

Nov 092016
 

Managing the various risks arising from business operations has always been a challenge for company directors in all sectors, but a recent change in the law for England & Wales has changed the risk management landscape significantly.

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With effect from 1st February 2016 the latest Sentencing Guidelines for health & safety offences allow for the imposition of £multi-million fines, previously an extremely rare occurrence. This change in sentencing protocols has attracted some attention in business circles (but whether it’s been given the attention it really deserves is a moot point). However there has been another seemingly small – yet highly significant – change invoked which could be a real game changer when it comes to practical risk management.

The change I refer to is the fact that Courts now base their sentence not on what actually happened but on what could have happened, i.e. the potential for harm or damage arising from the safety failure.

At first sight this might seem to be a trivial point, but it’s far from trivial.

For example: companies are no longer able to argue that, since there was no damage and nobody got hurt, their fine should simply be a token sum (and, of course, your Honour can rest assured that lessons have been learned … blah, blah, blah). Instead the Court will look at what could realistically have happened and will set the fine accordingly.

I made this point recently when providing a briefing to the Board of Directors of a national company from the gas sector. They use some 400 engineers across the country for work such as the installation and removal of gas meters, and their sphere of operations ranges from domestic installations to large commercial sites such as factories, supermarkets and schools.

The theoretical example I suggested to them was a gas leak arising from a faulty meter installation in a school canteen. Even if we assume for sake of argument that this theoretical leak had been detected quickly, and thus the school had been evacuated without any injuries, how might the prosecution approach the matter?

The prosecution could well argue that the potential outcome could realistically have been a fire or explosion resulting in possibly multiple fatalities amongst the school population – and, realistically, how could the defence argue against that assertion?

The fact that there had been no casualties would be considered the result of pure chance and thus nothing to do with the gas company. The company could not take the credit for blind chance or somebody else’s good fortune.

On the basis that the incident could have resulted in serious injuries and/ or multiple fatalities the Court would probably impose a fine certainly in seven figures and quite possibly eight.

This example (which, I stress again, is theoretical) had a suitable impact on the Board and stimulated a very valuable discussion about the need for effective safety management.

So this Board now understands the implication of sentencing based on potential outcome, but how many more Boards of Directors are blissfully unaware of the new risks they’re taking?

I am currently working with BoardPlus to develop training modules which will address crucial issues such as these – so watch this space!

About the Author

andy-farrallAndy has his own health & safety practice, Management & Safety Training Ltd, and is a highly experienced consultant and trainer (including accreditation with NEBOSH both as a tutor and examiner). He is an accredited accident investigator and is qualified in both the health & safety and training sectors.

A Fellow of the International Institute of Risk and Safety Management (FIIRSM), a chartered safety & health practitioner (CMIOSH) and a member of the UK Occupational Safety & Health Consultants Register (OSHCR), he has a proven track record in fields as diverse as accident investigation, lone worker safety, construction safety, and health & safety training.

Prior to moving into the field of health & safety management he was a specialist investigator with two élite UK law enforcement agencies (including taking responsibility for the management of complex international fraud enquiries).

Aug 242016
 

Risk in business is inevitable – in fact it is essential. A business which does not take commercial risks will not grow and a business which does not grow is doomed to decline.

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Yet, by and large, people in business, as in life, are risk averse, seeking, where possible, to follow the path which provides the lowest perceived risk.

That is not to say that business leaders should behave recklessly, taking unnecessary risks with little regard to the consequences – rather, they should take managed risks and it is the job of the board to ensure that the risks are managed robustly and rigorously.

Businesses need to identify the risks that they face, think of ways in which they might reduce the impact of each risk on the operation of the business and prioritise their focus onto the risks with the highest likelihood of occurrence and the greatest impact to the business.

In so doing, it is useful to group the risks into a number of categories. The following is a list of frequently used categories of risk:

  • Strategic
  • Operational
  • Financial
  • People
  • Regulatory
  • Governance
  • Reputational

Strategic Risks are the overarching risks the business takes when it sets or modifies the direction of travel of the business. These risks can be external, when the business is affected by changes in the environment in which it operates or internal risks arising from the adoption of an inappropriate strategy or the setting of unrealistic objectives.

Operational Risks arise from the delivery of the goods or services which the business undertakes.

Financial Risks are to do with the management and flow of the business finances

People Risks are associated with both the employment of staff and, for a charity, the involvement of volunteers.

Regulatory Risks are concerned with the legislative framework within which the business operates.

Governance Risks are to do with the way the business is organised and run.

Reputational Risks are any aspects of the activities of the business which would affect its reputation

Identifying Risks

A good place to start with identifying risks is the Business Plan or overall strategy document for the business.

SWOT analysis

A useful tool to help to identify risks is an analysis of the strengths and weaknesses of the business and the opportunities available to it and any potential threats to its success.

This analysis can be done at a strategic or operational level within the business to produce a number of items within each quadrant. Sometimes items will appear in more than one quadrant, as a strength can also be a weakness, for example, the involvement of a large number of staff in running a social enterprise is a strength as they are more likely to be engaged with the business but it can also mean that the decision making process is longer and less effective than an organisation with a leaner management structure so it may also be seen as a weakness.

Although when people think of risks they usually focus on the negative aspects – what can go wrong, it is also useful to think of the ‘positive’ risks presented by opportunities.

Once risks have been identified they can be entered into the risk register so that they can be prioritised and managed.

The Risk Register

The risk register is a list of the identified risks faced by the association prioritised in order of likelihood and impact.

It is a tool to enable the board to satisfy itself that the business’s risks are being managed effectively and should be viewed on an exception basis, for example always reviewing the top five risks plus those risks which have either increased or decreased in likelihood or impact since the previous review.

Each operating unit or department of the business will also have its own risk register which will feed in to the overall risk register for the company.

The format of a typical risk register is likely to consist of a table with the following headings:

  1. Risk Category
  2. Risk Description
  3. Risk Mitigation
  4. Likelihood
  5. Impact
  6. Ranking
  7. Comments

The most important elements of the risk register are (b) the description and (c) the mitigation

Risk Description

A clear description of the risk including, where possible, examples to illustrate the nature of the risk, for example:

Risk: Lack of a clear understanding of the market for high-precision widgets

Example: The research department develops a new product which sells in very low numbers and fails to make a return

Risk Mitigation

A description of the actions the business is taking and the controls that are in place to minimise or remove the risk, for example:

Mitigation: Regular review of high-precision widget market

Controls: Monitoring of product sales to identify buying trends

From SWOT to Strategic Risks

For each item in the SWOT table it should be possible to identify one or more risks which are represented by the Strengths, Weaknesses, Opportunities or Threats.

Strengths

Risks in this category are generally those that would reduce the identified strength, making it less of an asset to the organisation. Strengths will provide the organisation with commercial advantages or differentiators to existing competitors or act as barriers to entry to new market entrants.

Organisations never exist in a vacuum and there is always competition, either for the customers or the customer’s funds which will seek to erode the advantages and dilute the differentiation.

For each risk there should be one or more measures that will predict the likelihood of the risk becoming a reality and it should also be possible to identify controls which can be put in place or actions which can be taken to mitigate, reduce or remove the risk.

Weaknesses

Having identified the organisation’s weaknesses the most logical step is to make plans to strengthen or remove them or reduce the impact that they might have on the business if they continue to remain as weaknesses.

Risks in this category are associated with not making those plans or taking actions to address the weaknesses or any factor which might make the weaknesses worse or increase the negative impact that they might have.

Opportunities

Risks associated with opportunities are mostly associated with the risks of missed opportunities – not being able to capitalise on the organisation’s strengths or market position to take opportunities which would advance the achievement of the strategic vision or strengthen the ability to match competitors.

Threats

Threats are those things which might have a negative impact on the performance of the organisation and the risks are to do with failing to mitigate, minimise or remove the threats.