(12b) Improving Management of Critical Controls to Avoid Catastrophic Incidents

Catastrophic incidents can hinder operations and critical business functions, and frighten the survival of a company. It is one of many concerns that senior executives need to manage and prevent. These incidents also often lead to more stringent regulatory requirements, which make business environment more challenging and can increase operating costs. In the U.S such events have also led to industry-wide shutdowns while safety and regulations are debated.

Typically, risks associated with catastrophic events identified in risk assessments are low and deemed to be acceptable provided that effective controls are implemented. However, in many cases, these controls are the last line of defense and if they fail, have a catastrophic impact. Therefore, it is important to ensure that these critical controls are managed properly and are effective at all times. In order to do so, leading and lagging indicators to monitor risk controls, which can range from safety equipment to maintenance procedures to a risk management system can be implemented. This is one of the many ways to proactively manage risk.

Managing a control is not as simple as a checkmark next to a semi-annual test. It is necessary to follow the control specification to ensure that the right people with the proper training and have the authority to perform testing. It is difficult to ensure that specifications are met without a system to monitor all of this information. And with the average global organization trying to manage thousands of sites around the globe, managing critical controls becomes very cumbersome.

This presentation will outline the four key points for the most effective Management of Critical Controls, which include: 1) Conduct risk assessment to identify critical controls 2) Implement tool for creating leading and lagging indicators to monitor effectiveness of critical controls 3) Identify risk management expertise to assist in creating these indicators 4) Integrate these indicators into existing Risk Management System