RISKY business

Imagine the situation. You learn that there has been a serious accident on the premises. Several days later, a representative of the local environmental health department or the Health and Safety Executive visits, and quizzes you about several regulations. You have never heard of any of them. Both you and the company are prosecuted and, pleading guilty, you attend the local magistrates' court expecting a fine. But the magistrates refuse to deal with the case. It is committed to the Crown Court.

You are going to have a criminal record. You might be sent to prison. The night before the hearing you suggest to your wife/husband/partner that they should drive you to court in their car in case you do not come home.

It is beyond doubt that company directors and officers face a far greater risk of being prosecuted than ever before. The general duties placed on all employers by the Health and Safety at Work Etc. Act 1974 have now been extended by a wide range of additional regulations which affect virtually every workplace. These regulations emphasise the duty of the employer to assess safety, to identify risks and dangers and to take steps to remove or, at the very least, minimise those risks/dangers.

All employers should by now have taken steps to ensure that they are aware of, and are complying with, the various regulations affecting their activities. There may be regulations which are specific to a particular business, but most businesses will almost certainly be affected by the regulations listed in the box below. Would you be surprised to know that these regulations apply to you?

Good risk management starts off with risk identification. When seeking to identify risks, do not make the mistake of missing the obvious. The fact that an activity may have been going on for many years without incident does not make it safe. It may just mean that you have been extremely lucky.

Once risks have been identified, they should be analysed and proper assessments carried out. How likely is it that a particular event may occur, and what are the consequences if it does?

You should then take steps to eliminate, or at least reduce, those risks. Part of this process will be proper education and training followed up with regular review.

Where analysis shows that a particular risk, though remote, may produce potentially serious consequences, then a specific plan to deal with that worst scenario situation should be developed.

Insurance may play an important part in risk management strategy, but insurance has to be paid for and claims for personal injury and damage to property met by insurers will ultimately work through into higher costs and lower profits. It follows that good risk management procedures should enable the cost of insurance to be reduced as well as the hidden costs of dealing with such claims. Following these rules could change your status from a potential crisis manager to a true risk manager.