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Investigations into recent incidents such as those at BP Texas City and Buncefield have resulted in calls for better corporate governance of process safety for managing risks at hazardous installations.

But what do we mean by corporate governance?

The UK Corporate Governance Code (2016) supports the classic definition:

“Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship….”

But from a process safety perspective, it can be difficult for those from non-technical backgrounds to see the links between the internal controls advocated by the Corporate Governance Code and the detailed technical measures necessary for managing process safety risks. Recognising this problem, industry has responded by working with the trade associations and in conjunction with the COMAH Competent Authority and Trades Unions, to develop a set of Principles of Process Safety Leadership, aimed at helping to improve process safety performance.

Ken Rivers, Chair of the COMAH Strategic Forum, emphasises the need for clearer guidance from the top, saying “we would not leave the management of financial risk solely to our accountants. Similarly, we should not leave the management of major hazard risks solely to our engineers.”

The principles provide for a high-level framework for good corporate governance of process safety, stating:

● Clear and positive process safety leadership is at the core of managing a major hazard business and is vital to ensure that risks are effectively managed.
● Process safety leadership requires board level involvement and competence. For companies with boards located outside the UK then the responsibility to show this leadership rests with the most senior UK managers.
● Good process safety management does not happen by chance and requires constant active engagement.
● Board level visibility and promotion of process safety leadership is essential to set a positive safety culture throughout the organisation.
● Engagement of the workforce is needed in the promotion and achievement of good process safety management.
● Monitoring process safety performance based on both leading and lagging indicators is central to ensuring business risks are being effectively managed.
● Publication of process safety performance information provides important public assurance about the management of risks by an organisation.
● Sharing best practice across industry sectors, and learning and implementing lessons from relevant incidents in other organisations.

An exercise undertaken by HFL Consulting provided significant insight into process safety management and revealed encouraging results in relation to the technical aspects of asset integrity management but that more needs to be done in relation to policy setting and deployment.

A high standard of process safety management throughout the organisation also requires staff with process safety management responsibilities to have or develop an appropriate level of competence. Responding to this need, we have developed and deliver a range of vocational qualifications, CIProS Qualifications, to promote continuous improvement in process safety at all levels. For more information on our programme of events and training courses, please visit our events calendar.

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