In this article we will investigate the importance of risk management in an organisation’s overall success. Learn about the value of Environment, Health and Safety (EHS) risk management and why it should be viewed as an investment.
Managing risk is an iterative process and assists organisations in setting strategy, achieving objectives, and making informed decisions. It is also part of governance and leadership and how a business is managed at all levels. It is therefore a management system, a tool that is used to assess all types of business risk such as financial, operational, environmental risk etc.
As employers you are legally obliged to keep all in the workplace safe from harm. Risk management of health and safety (H&S) risk, although obligatory, contributes to the improvement of management systems and enhances business performance.
The Relationship between EHS Risk Management and Business
Risk management is not simply several documented risk assessments in a folder on a shelf. It is a live system, ever changing and evolving as health and safety and other business risks emerge and change. Central to the risk management system is risk assessment: identifying, analysing, and evaluating risk to people’s health and safety in the workplace. This can be seen in the following video from the HSE:
The approach and the type of risk assessment should be fitting with your business. There are many tools and various risk assessment types and matrices. However, keeping it simple and tailoring to your business works best and results in risk assessments that can be understood and followed by all.
Once risks are identified, analysed, evaluated, and eliminated or reduced to a safe level, documented and communicated you are meeting your obligation.
The Business Case for EHS Risk Management
While keeping it simple, remember that your risk assessment must be comprehensive, must be agreed upon and must be signed off by those involved or a manager on behalf of the risk assessment group. All departments, job tasks, processes must be risk assessed. Engaging workers in risk assessments assists with the capture of all hazards and the correct assessment of the corresponding risks.
However, risk assessment is only one part of risk management. To create and protect value using risk management, all elements of the system must be implemented. These elements although integral to many International Organization for Standardization (ISO) standards to include the health and safety standard ISO 45001:2018 are very well presented in the graphic below taken from the ISO 31000:2018 Risk Management standard.
The key elements are:
- Risk Assessment
Mainstreaming risk management into organisations for success
For effective and best results, risk management should be mainstreamed across the business and begin at the planning stage of the business, planning to purchase new raw materials, planning a new way of doing something, new staff etc. Many businesses do this very well for general business risks but health and safety risks, for many reasons, are not included or poorly managed in the general business structure.
Although there is a cost factor involved in risk management, often referred to as a ‘Regulatory Burden’, all business regulations add a cost to the business. So why do some businesses point immediately to health & safety as a burden?
Reasons have been found to include;
- A poor understanding and awareness of the meaning of health & safety
- A perceived complexity of health and safety legislation and regulations
- A lack of knowledge on how to manage the risks,
- A lack of knowledge and awareness in the value of managing H&S risks,
- A fear of litigation,
- A lack of resources (time, people & money) etc.
Changing Traditional Thinking around EHS Risk Management
Although there is a recognised cost to effective risk management, the cost of not managing H&S risk is far greater. The associated tools have been developed to assist businesses with managing H&S risk for this reason. There is a business case for managing H&S risk in addition to other business risks. As employers you need to remove the perceived barriers. A very common barrier to good H&S risk management and one of the main barriers noted in research is fear.
This perceived ‘fear factor’ has been expressed by many employers and employees due to the following:
- Employers driven by the fear of litigation and concerns about the possible implications of any claims, and therefore in favor of good health and safety practices.
- Employers positive about health and safety because of their general organisational approach to employees. The approach being to treat employees well with the expectation that this would result in fewer H&S issues, hence higher productivity, and a better quality of product.
- Employees afraid of losing their jobs and therefore hesitant to refuse to work or speak out about unsafe practices.
- Both employers and employees fearful of signing off on H&S documentation in case of litigation.
Fear of participation in health and safety decisions is not substantiated. Ignoring health and safety and noncompliance is a much more serious matter.
The employer is legally responsible and accountable, all in the workplace are responsible for safety and health of themselves and others in the workplace. The law requires business owners to demonstrate ‘reasonable care’ and a risk management system that considers and protects all in the workplace ‘as far as reasonably practicable’.
A Holistic Approach to EHS Risk Management
Signing off on a risk assessment that carefully assessed a job task and that later due an incident showed to be missing a subtask, hazard, or accepted an unacceptable risk is part of the process. Acting on this immediately through documented corrective action, review, communication/training and continuous improvement is imperative.
And if this is the approach throughout your organisation, it will be evident should your organisation be involved in a claim. Implementing and mainstreaming risk management across your business in a structured way, having a live and updated documented system, engaging, communicating, and training all in the system is evidence of due diligence.
Implement effective Risk Management strategy
Rather than avoiding and fearing EHS regulation, look at incentives to involvement, cultural change lies at the heart of all proposals for change within organisations. Lead by example to achieve a cultural change, where employers are perceived as acting in the interests of their workforce, and taking health and safety seriously, employees will be prepared to do so as well.
A successful EHS risk management strategy will:
- Approach risk management and all health and safety issues and requirements as a group or groups
- Engage your workers to ensure that your system is comprehensive
- Reduce the amount of irrelevant H&S information provided to workers and keep it simple to avoid it being ignored
- Enable all workers and those at risk in your organisation to read and understand instructions, risks, and controls
It is imperative that all workers have easy access to this information to help maintain the safety, health, and welfare of all. Managing this is part of of the process, ensuring employees are trained and competent in their job tasks.
Risk Management Tools and Resources
There is much research and resultant tools available on this subject. A list of some of these is presented below. This list is not exhaustive.
By demonstrating the value and the costs involved, the business case for investment in H&S risk management and a good safety management system can be presented to senior management, shareholders etc. Demonstrating a business case will assist with getting all members of the organisation on board and engaging in health and safety in the workplace.
About the author
Catherine Jordan, PHD, is a product specialist with EcoOnline. She has over 20 years’ experience working within HSEQ across many industry types and specialises in safety & quality management.
Get started with EcoOnline EHS
EcoOnline EHS is a software tool for managing your company's occupational safety and wellbeing. In the software, you will find ready-made form templates for the assessment of physical workload factors and physical work environment factors.
Learn more about digitizing your HQEQ-processes with EcoOnline EHS by clicking below or simply Request a Demo