Better Operational Risk Management - Enhancing the Knowledge of Internal Stakeholders

In today’s competitive business environment, the need to engage stakeholders in process safety management is critical in order to minimize operational risks. Organizations can no longer just focus on the operational risk management system alone, but must engage stakeholders to deliver the expected outcome of an operational risk management program.

Stakeholders are those that can affect or be affected by the organization's vison, objectives and policies. Stakeholders can be found both internally and externally. Typically, external stakeholders are Creditors, independent directors, government, and community from which the business draws it resources. The internal stakeholders are mainly entities within a business such as managers, employees, owners, and board of directors.

Many organizations are very successful in engaging the external stakeholders and enhancing their knowledge of operational risk management. The goal is to educate and to inform the community about the risk they live with. By engaging the external stakeholder frequently and personally, an organization is providing the awareness and transparency in the area in which they conduct their business.

However, many organizations attempt to engage internal stakeholders on operational risk by providing training to enhance the employees’ knowledge on process safety management. This approach has resulted in disconnection or disengagement of the managers or employees and the result is not sustainable.

This paper emphasizes internal stakeholders (managers and employee) and explores various approaches of enhancing the stakeholders’ knowledge in operational risk management.

For any organization to implement a change program such as process safety management, the organization needs to recognize why people resist change. This is a fundamental requirement in any change program. Understanding why the internal stakeholders’ resist change is imperative to achieving a successful risk management program.

Not all internal stakeholders are equal. It is paramount to identify and understand the relative positions of important stakeholders who are either impacted by the change or will influence its success. This paper will explore the following that leads to sustainable stakeholder knowledge in operational risk management:

• Why people (internal stakeholders) resist change?

• Who are the internal stakeholders and what are their roles and responsibilities?

• What is the stakeholder readiness for change?

• How to conduct internal stakeholder analysis on operational risk management?

This approach contributes to better outcomes in terms of increased knowledge of stakeholders and minimization of risks, while optimizing the money, time, and effort required.