6.30.2011

Risk Management and Business Continuity with an Integrated Management System

In my previous post, I briefly discussed the integrated quality, safety, and environmental management system (QSEMS) at the Cannes Convention Center. The trend toward integrated management systems, including ISO’s movement toward a generic management system model for wide application, will provide a new tool for organizational risk management.

As evolved as risk management methods and models are, organizations struggle with integrating risk management practices. A silo phenomenon challenges risk managers as it has EHS managers for many years. In current non-financial risk management writings and research, the need for risk management integration and “silo-busting” is highlighted. An integrated risk management system can provide a way to bust silos in an organization. Read More

5.27.2011

EHS/S and CSR Career Management and Growth in an Evolving Field

A goal of business functions such as quality, EHS/S, and CSR is to become embedded in the core business. This is also talked about in terms of becoming fully integrated in the business. A small research project I conducted in 2007 examined issues and challenges associated with “integrating” EHS/S in a company. Several of the EHS/S executives I interviewed at that time expressed concern that if EHS/S was fully integrated in a company, it would disappear. This possibility concerned them; the challenge, they said, was to integrate, but to also maintain visibility and evolve.

Over the years, EHS management system experts have voiced a similar concern with the development of generic, or fully integrated, management systems that include EHS, sustainability, security, quality, etc.

The Spring 2011 issue of the Corporate Citizen contains an article that touches on the integration/disappearing phenomenon associated with CSR and its professionals. Several interviewees suggest that CSR might go away in a company since its goal is to become fully embedded in the core business. This sounds familiar. Read More

5.25.2011

Supercharging Your EHS/S MS Management Review – Developing a Strategic Risk Management MS

Many EHS/S management system experts believe that one of the most important components of an integrated MS is management review. Management review is the time during which the overall strategy of an integrated EHS/S MS is assessed. Said differently, it is a time to see if the MS’s purpose and desired outcomes are being fulfilled. Management review is commonly framed as a performance evaluation activity. While this is correct, I would suggest that there is much more available through management reviews—that is, these are strategic opportunities to impact an organization’s Strategic Risk Management (SRM) process, and possibly start developing an SRM MS.

Enterprise Risk Management and the evolution of Strategic Risk Management are relatively new in the domain of organizational and management science. While strong frameworks for financial risk management have evolved, this is not the case for overall non-financial risks and their management. In particular, there is an absence of a universally accepted management system approach in this arena. Yes, the ISO 31000 standard on risk management goes a long way toward helping, but it is not a management system, per say. Rather, it is intended to augment an existing MS framework. Read More

3.31.2011

Is Biodiversity the Next Big Environmental Issue for Business?

The McKinsey Quarterly reported earlier this year on environmental management-related findings from a McKinsey survey conducted in June 2010. The 1,576 responses from executives in a wide range of industries, regions, and functional specialties indicate climate change and energy efficiency as the most important environmental matter in their companies, but also indicate an increasing concern about biodiversity.

The article titled, “The Next Environmental Issue for Business,” suggests that biodiversity may be the next large environmental issue for companies.  The June 2010 survey found that 9 percent of the respondents think biodiversity is an important issue. This finding is similar to what a survey in 2007 found related to climate change and energy efficiency. The suggestion here is that if biodiversity has the same trajectory as climate change and energy efficiency, then by 2013, biodiversity will be a significant strategic and management issue for companies.

A significant number of respondents indicated they felt that in the next one to three years, they would have increased pressure to change operations, products, and services to reduce impacts on biodiversity. Read More

3.25.2011

EHS/S Continual Improvement – The EHS/S Management System is Key

Continual improvement is a term we hear a lot about in business these days. It is a notion that is central to management system approaches rooted in the quality and ISO arenas. As central as this concept has become, I find that organizations struggle with how to define it and then practice it.

Continual improvement may be defined and implemented in any number of ways. The basic notion is that the organization should seek ways to achieve ongoing improvement of EHS/S performance, both in terms of outputs and outcomes. The primary goal of continual improvement activities should be to reduce EHS/S impacts and eliminate worker injury and illness.

Continual improvement does not mean or imply a requirement to attain better-than-compliance conditions as measured against specification regulations or standards. While better-than-compliance conditions may be a goal of an organization, it is not a requirement of the definition of continual improvement suggested here. Read More

3.6.2011

ISO 28000 – Security Management, Risk Assessment, and ISO 14001 as a Foundation

The current issue of ISO Focus (February 2011) is dedicated to a wide range of security-related issues and highlights the ISO 28000 series on security risk management.

ISO 28000 was published in 2007 and provides guidance on security management. Its framework follows the ISO 14001 framework closely. 28000 is the core of the family, providing a specification management system standard. ISO 28004 provides implementation guidance in specific areas, such as 28005 (Electronic Port Clearance) and 20858 (Ships and Marine Technology). Read More

2.28.2011

Getting Your EHS/S Risk Management Metrics Right: Taking a 360-Degree View

At its core, EHS/S (environmental, health, safety, and sustainability) management is a risk management endeavor and there are numerous ways these activities can be described and reported. Even though many companies have robust EHS/S risk management practices, it is sobering to hear risk professionals continue to report pessimism about their organization’s overall risk management efforts.

The February 2011 issue of Internal Auditor reports on three studies that indicate while there is continued focus on the importance of robust risk management, more times than not, it is not being done well. Research conducted by the Enterprise Risk Management (ERM) Institute at North Carolina State University found that only 28 percent of 460 ERM professionals surveyed described their current state of ERM implementation as “systematic, robust, and repeatable”; 42 percent described the process as immature; and 60 percent described the process as mostly informal and ad hoc.

Corporate board oversight of ERM is hit or miss. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) reports that while directors give their boards high marks for ERM, less than one-half of the boards have ERM accountability assigned to a board subcommittee. Further, a survey of directors, conducted by Protiviti Inc., showed that only 13 percent consider ERM robust and mature. Internal Auditor reports that both of these studies point to challenges with risk reporting to the board. Read More

5.19.2010

A Management of Change Boost with Organizational Learning and Systems Thinking Tools

As a living system, a company’s risk profile is continually shifting. The growing attention on sustainability and corporate responsibility (CSR) has stretched companies as they wrestle with ways to characterize and manage their sustainability and CSR risks.

Integrated EHS, sustainability, and CSR management systems provide a robust structure to manage risks.  A key concept in an integrated management system is “the management of change” (MOC), which focuses on identifying and managing risks as operations or the operating environment change. MOC procedures and process typically kick in when new equipment or manufacturing lines are installed, during mergers and acquisitions, or during internal re-organizations. On the corporate responsibility front, forward-thinking companies include the monitoring of third-party monitoring criteria in their MOC process.

Strong MOC processes are part of a company’s first line of defense for risk reduction. The MOC process should detect most risks that arise in between formal risk assessments. Read More

4.29.2010

The Sustainability Gap

McKinsey & Company recently published findings from its February 2010 survey, “How Companies Manage Sustainability.” Nearly 2,000 executives from a wide range of industries and regions participated. The survey concluded that “most companies are not actively managing sustainability, even though executives think it’s important to a variety of corporate activities.”

This gap is attributed to no clear definition of what sustainability means, and as a result, only 30 percent of the respondents indicated that they “actively seek opportunities to invest in sustainability or embed it in their practices.”

The survey found that respondents framed sustainability in the following way:  55 percent as an environmental management issue; 48 percent as a governance issue; 41 percent as a societal issue; and 56 percent indicated they define sustainability in two or more ways. Only 6 percent said that sustainability is both a C-Suite priority and that it was formally and effectively embedded in its business practices. Read More

4.28.2010

The Sustainability “Megatrend”

It’s common knowledge that sustainability is a big deal. It is a multidimensional issue that impacts all sectors of society. Companies wrestle with how they are going to respond beyond the obvious of energy conservation and waste reduction, when sustainability begins to blur with corporate social responsibility (CSR).

Some direction and insights are provided in an excellent article, “The Sustainability Imperative: Lessons for Leaders from Previous Game-Changing Megatrends,” by David Lubin and Daniel Esty. This article frames sustainability in ways that allow organizations to take actionable steps to impact their sustainability efforts (Harvard Business Review, May 2010).

Many readers are familiar with Esty’s landmark book, Green to Gold, and his work in the environmental policy arena. He evolves the ideas presented in Green to Gold in the “Sustainability Megatrends” article. Lubin and Esty assert that the current sustainability movement can be viewed as a megatrend, as popularized by John Naisbitt in 1982. As such, there are lessons that companies can learn by examining other megatrends, such as IT and quality. Read More

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