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Pilko & Associates Resources

Pilko & Associates regularly brings important information to the marketplace and its clients around issues associated with increasing risk control. We do this in two primary ways:

  • Grey Papers: Extended documents presenting key ideas, challenges and best practices for increased operational and EHS risk control, and in issues of energy and chemical merger and acquisition activities. More>>>
  • “Did You Know”: Quarterly summaries of industry and Pilko-related facts, changes and opportunities for energy and chemical leaders to consider. More>>>

Below are libraries of each document type. Click on any heading to learn more and download the document for review.

Pilko & Associate Grey Papers

Periodic publications designed for energy and chemical boards and corporate officer leaders around important risk control topics.


LEADERSHIP PART TWO:  Defining Acceptable Risk Levels and Providing the Right Resources for Mitigation

Leadership matters.

In our industry, leaders set the tone for understanding, mitigating and controlling Operational and EHS Risk every day.  What you choose to do, or not do, significantly impacts the viability and profitability of the business.  An issue is answering key questions around acceptable risk and tolerance and putting the right resources in place to mitigate unacceptable risk before an incident happens.

Pilko & Associates brings you the second of a four-part Leadership Grey Paper series.  In this paper, we present five leadership challenges surrounding the definition, assessment, prioritization and mitigation of risk.  Learn how to:

  • Define and prioritize acceptable and unacceptable risk
  • Apply proper financial resources toward mitigation
  • Prepare human resources to identify, assess, prioritize and mitigate risks
  • Establish realistic timelines for risk mitigation
  • Celebrate the avoidance of risk and potential incident

Best-in-class leaders continually improve their leadership capability and organizational ability.  They seek the correct answers, processes, methods and resources to control risk in order to limit or eliminate impact to people, assets and the business.  This latest Grey Paper is based on over 35 years of helping energy and chemical leaders find and mitigate Operational and EHS Risk around the World.  Why not learn from others’ mistakes and successes in order to contain and control your Operational and EHS Risk? You have nothing to lose and much to gain.

To learn more, click on the image above.



Pilko & Associates has been at the forefront of accelerating leadership within boards of directors and senior officers of energy and chemical companies around the world. This unique perspective allows us to bring to you a four-part leadership series based on our experience and knowledge of Best Practices.

It’s proven that leadership plays a significant role in controlling Operational and EHS Risk. And that great leadership creates the right environment for employees and contractors to do their very best work to increase control of Operational and EHS Risk.

Great leadership helps organizations and people see risk differently than in the past, creating better outcomes for the future. The role of every leader, at all levels and times, is to “Challenge the Green and Support the Red” through encouraging employees and contractors to highlight, prioritize and control real issues and risks. The very best leaders see their role as developing the next generation of great leaders.

Leadership is critical at all levels in the organization, significantly contributing to enterprise and site performance and gaining control of risk. To help you achieve new levels of Operational and EHS Risk control, this first Leadership Series Grey Paper brings to you information on:

  • What leaders see that others don’t
  • Understanding probability of risk
  • Actual vs. potential consequences
  • Leadership transparency
  • The impact of increased risk
  • Becoming a better leader within your organization and company.

Download our recent Grey Paper to learn more by clicking on the image above.


Corporate boards and officers are often blind…. to internal operational and safety Blind Spots.  Overconfidence and experience lead to a false sense of security when it comes to operational safety and risk control.

Our experience with clients around the world point out two very real and risky situations within every company, plant and group – even top decile performing organizations.  They are:

  • Risk control entropy: a steady, sure weakening and diminished focus on the most important risk control elements.
  • More and more Blind Spots: increased frequency and complexity of safety risks lead to more unmanaged soft risks or an inability to quickly and effectively find “hidden” risks.

Both lead to greater business risk in terms of safety incidents, expense, profitability and reputation.

Download our recent Grey Paper to learn more by clicking on the image above.


Sometimes it’s hard to say goodbye, even when it is the right thing to do.

A divestiture is tough to do, from the first business case decision through to effectively controlling post-close risk. McKinsey documents that those companies that have a divestiture strategy alongside acquisition, return between 1.5 and 4.7 percent better shareholder returns than those that only are involved in acquisitions. Divestitures create value to energy and chemical companies.

In divestiture activities, we’ve noticed that most companies focus on the net proceeds as the primary value driver. Whereas there are two others that demand attention: a.) accretive shareholder value due to focus on core business operations, and b.) the reduction or elimination of post-close liabilities. Leading companies take all three into account when evaluating divestiture activities and value creation.


Energy and chemical companies face outsized risk due to operational safety hazards, regulation, governance and compliance leading to financial and reputational consequences due to unforeseen incidents.  Effective leaders recognize these challenges and work hard to mitigate risk through quantitative programs that result in incremental risk management.

Today, everything has changed. Incremental risk management isn’t good enough. Increased risk control is required to reduce financial, reputational, project, asset and environmental failure. Incremental risk management has been replaced with broad-scale risk control efforts that directly address two distinct risk types: hard (quantitative) and soft (qualitative) risk.

Industry leaders demand a 360º view of hard and soft risk identification, validation, prioritization, and control leading to substantial reduction or elimination of blind spots. Leading energy and chemical companies require the right optics, response mechanisms, progress measures and reporting that deliver accelerated success in mitigating risk exposure.


The probability of a successful acquisition and integration is estimated to be less than 50%. Yet downtown Las Vegas slot machines have an average 91.66% payout!

Over the past five years, acquisition deal types have undergone great change. In the past, most transactions (70%) were done for consolidation purposes, to achieve new economies of scale or to decrease cost. Today over half (54%) of all acquisitions are done for transformative reasons—- new markets, new capacity, new channels, or new products to move the business forward.

Transformation acquisitions have a higher level of complexity and risk. In fact, a recent study shows that transformation acquisitions only have 55% strategic success rate, a 50% financial success rate, and only a 47% operational success rate. The rate of failure remains high while the cost of transactions continues to climb.


Risk management or risk control — which one would you like to have?  While they may seem similar, they couldn’t be more different. Risk management is the world of incremental improvement.  Increased risk control is a “sea change” in operational/EHS that propels a business forward.

Interestingly, most energy and chemical businesses have established risk management processes; but they still struggle to get better control of risk, resulting in catastrophic incidents that hurt people, profits, and reputations.  Industry leaders look beyond risk management to risk control, thereby reducing probability and outcomes associated with significant events.

Click on the paper image above and download our newest grey paper. We’re confident you’ll find something you can integrate and implement—even today.


The need to increase control of operational/EHS and transaction risk has accelerated in the past five years. Simple regulatory compliance is no longer acceptable as a primary risk control measure. Reputations, balance sheets, shareholder value, lives, and careers hang in the balance.

The gap between today and increased operational/EHS and transaction risk control contains seven obstacles for energy and chemical companies to overcome. Each containing its own set of challenges that compromise control of operations/EHS and transaction risk.

Pilko has identified the challenges and how to overcome them, along with four things that must be integrated across the business. These findings and recommendations are based on decades of hands-on operational/EHS and transaction experience-having identified, validated, and overcome the most difficult risk challenges for corporate officers and boards.


The need to increase control of operational/EHS and transaction risk has accelerated in the past five years. Simple regulatory compliance is no longer acceptable as a primary risk control measure. Reputations, balance sheets, shareholder value, lives, and careers hang in the balance.

The gap between today and increased operational/EHS and transaction risk control contains seven obstacles for energy and chemical companies to overcome. Each containing its own set of challenges that compromise control of operations/EHS and transaction risk.

Pilko has identified the challenges and how to overcome them, along with four things that must be integrated across the business. These findings and recommendations are based on decades of hands-on operational/EHS and transaction experience-having identified, validated, and overcome the most difficult risk challenges for corporate officers and boards.



Pursuing an acquisition is exciting. Divestiture, on the other hand, is seen differently. Divestitures are often completed from a position of weakness. Learn how to gain control and maximize the value of your assets during the divestiture process.

Energy and chemical companies frequently find themselves facing a complex and challenging situation when deciding to pursue the divestiture of non-core businesses and assets. Operational / EHS Risks have the potential to slow down or sidetrack a sales process, yet a strategic and thoughtful approach to identify and manage these challenges can lead to successful outcomes.

This Grey Paper provides insight into:

  • Maximizing value during the sale process
  • Protecting against liability during and after the sale is completed
  • How Pilko & Associates supports clients involved in Divestitures.


Corporate officers and board members of E&C companies know the financial and reputational risk associated with catastrophic incidents. Yet, despite, this, many boards lack detailed understanding of a company’s approach to risk management, mitigation, and control. Discover five, key questions that every board should ask in gaining insight as to how finances and reputation can be protected.



Competitive challenges in finding the right transaction opportunity are considerable. Critical to the process is an integrated approach to due diligence that spans operational risk (OR) and product safety (PS). This multidimensional view gives you the insights you need to control your operational, EHS, and transaction risk every step of the way.



Pilko’s unique Remote Sensing® process gives you and your company a behind-the-scenes look at key information and analysis that can make your next deal a winner. Knowledge is control, get control of your next merger, acquisition, or divestiture transaction.



Assessing EHS compliance risk is an important part of every transactional due diligence process. A growing number of transactions have moved operational risk (OR) from the periphery to a key aspect of operational due diligence. Learn how to discover the difference between standard and target operating standards to gain control of your merger and acquisition risk.



Downstream has seen steady growth in M&A transaction volume. Especially among non-traditional buyers. In such circumstances it is important to pay attention to financial, operational, EHS, and associated risk. This paper can help you learn the pitfalls to avoid as you grow control of information and insights associated with downstream acquisition activities.


Your company has policies and standards that govern operational, environmental and safety performance. But is everyone across the company following them? How do you know?

The disconnect between written procedures and a company’s actual day-to-day operational and environmental, health and safety (EHS) activities can be quite large – and dangerous. At stake are your organization’s vulnerability to catastrophic risk and the health and safety of your employees and contractors – along with your license to operate.

Pilko & Associates’ proprietary 8IGHT DRIVERS® APPROACH helps chemical and energy companies identify and understand the issues that hinder operational performance and allow risky behaviors to continue unchecked.

8IGHT DRIVERS® delivers detailed information on your company’s current performance in eight critical areas related to operational performance, covering both technical and cultural issues. And we follow up with detailed recommendations, including best practices that have been proven to work in industries around the world, along with ongoing counsel throughout implementation.



In the aftermath of the Macondo platform explosion, fire, and crude oil leak, the news coverage was enormous. This catastrophic event led to billions of dollars in settlements, and steep declines in company business value. Learn about gaining control of operational and EHS  risk, necessary critical success factors, and solutions that can be implemented now.



We’ve all seen that catastrophic incidents are very expensive. They impact the lives of people and families while also consuming cash, profit, share value, reputations. Discovering, validating, and planning for catastrophic incident takes a holistic approach. Learn how you can get ahead of the problem of catastrophic incidents, gaining control of your operational and EHS risk.



Serious incidents in the energy industry are always newsworthy. Yet it’s the near misses that can be the most frightening to insiders. Learn now to avoid catastrophic incidents during industry downturns, putting you and your organization in control of operational, EHS, and transaction risk.



E&C industries have experienced ongoing high-profile incidents. Incidents that have impacted lives, the environment, earnings, business value, and reputations. At issue are the fundamentals that make safe and reliable operations and EHS outcomes. Discover the reasons why the next headline shouldn’t be about your company and how to grow control of your operations and EHS risk.



Despite best efforts, process safety incidents continue. Many leaders tend to focus on technical reasons, where the causes often are in other areas as well. Learn how to discover other risk factors, such as leadership and behavioral, are often the most critical influencers of risk and safety. Discover how to get control of technical and non-technical contributors to operational and EHS risk.



Mexico’s landmark energy reform has created significant opportunity. Executives eyeing expansion into Mexico may have difficulty understanding risks associated with Mexican markets. The winners identify and mitigate the most serious risks. Learn how you can get control of your operational, EHS, and transaction risk when considering and entering Mexican markets.


AUTHOR: Michael McCandless

While incident investigations can be the most powerful and effective way to reduce risk, there are several areas where companies fail to take full advantage of this powerful tool. This second post in the series looks at how companies investigate incidents and arrive at root cause. Leading companies ensure that root cause is effectively and accurately identified through training, resourcing, and follow-up.

When formal investigations of incidents with catastrophic or significant potential are routinely conducted, companies frequently fail to have the competency or discipline to dig deeply enough to identify the true root cause. Even with the use of trained facilitators, many investigation teams only manage to identify the symptoms that lead to an event, falling short of findings that can lead to true preventive action. There are many processes employed, which tend to be variations of the 5 Whys or Fishbone Diagram methodologies that help individuals or teams to systemically and objectively determine root cause. While each of these tools can be extremely effective, they are highly dependent upon the people using them.

Typically, the fatal flaw in investigations is the inability to dig deeply enough, especially in respect to human error. This is particularly perplexing, because there is a human element in the vast majority of incidents. Humans by their very nature are prone to making mistakes and in most cases; a thorough investigation will reveal inadequate systems and standards, ineffective training, or leadership behaviors that encourage risk taking on the part of the employees. It is therefore extremely important to determine whether the individual had the environment, training and tools to effectively deal with the situation and if missing, to rectify immediately.

Another flaw in root cause investigations is that it is sometimes very difficult and time consuming to gather the data necessary to truly complete the investigation. In such cases, part of the root cause may be the lack of useful or accessible data to ensure that the potential hazard is recognized and mitigated prior to an incident.

One of the most effective approaches to ensuring effective incident investigations is through management review. Many companies, business units, and plants select three or four completed incident investigations for review on a monthly basis. Through these reviews, management gets a very clear picture not only of the key incidents that have occurred, but also of the quality of the investigation.   It is important that the management team challenges the identified root cause by asking why at least one more time, or testing hypotheses for deeper causes with the investigation team leader. When management teams see that investigations frequently appear to identify symptoms rather than causes, it is time to dig deeply into the investigation process and take action to improve the competency and discipline of the investigation teams to enable them to consistently determine root cause.

In Conclusion: When incident investigations identify the symptoms rather than the true root cause, incidents will continue to recur regardless of the actions taken. It is imperative that companies have measures in-place to ensure that ALL incident investigations find true root cause.


Author: Michael McCandless

While incident investigations can be the most powerful and effective way to reduce risk, there are several areas where companies fail to take full advantage of this powerful tool. This first in a series of posts looks at best practices for companies to process the many incidents that are documented.

Almost any company that manages risk has an incident investigation process in place, but many companies do not provide clear direction on how to manage the many events that are documented, treating all incidents, regardless of the potential impact, in the same manner. This can lead to incidents with high impact potential being lost among the many others that are reported. While all incident reports are important, it is vital to have a logical prioritization system for processing.

A fatal flaw for some companies is that they look only at the actual impact, rather than the potential impact of an event. Companies that prioritize based on the potential impact frequently capitalize on incidents or near misses that had little or no actual impact and take action that significantly reduces risk.

Leading companies have a system in place to prioritize incident reports based on potential impact, and provide clear guidance for how each level of incident should be addressed. A simple, effective method for prioritization is to group incidents into three buckets based on their potential impact: Catastrophic, Significant, and Minor.

  • Catastrophic incident potential would be for events that could result in a fatality, significant off-site impact, or dramatic revenue loss. For those incidents, a formal root cause investigation should be conducted with a certified facilitator, and the corrective actions required should extend throughout the company where there would be potential for a similar incident.
  • Significant incident potential includes events that could result in a recordable or lost work day injury or illness, community or customer concerns, or significant revenue loss. In these cases, an incident investigation team should use a “5 Why” or alternative root cause methodology to determine root cause and determine corrective actions. Corrective action must take place at the impacted location, and the lessons learned should be communicated beyond the site so that others can consider taking preventive actions at their locations.
  • Minor incidents should be evaluated and tracked with the report author informed of the action that will be taken, if any. The author, should be thanked for their input to reinforce the importance of strong incident reporting. Over time, with appropriate tracking of the minor incidents, it is likely that threads of similarity will emerge, identifying the need for action to address these themes before they lead to a more serious incident.

Conclusion: An effective process to categorize and prioritize incident reports, provides the opportunity to fully understand, learn, and capitalize from incidents with the overall goal being to significantly reduce overall operational risk.

I have created an Incident Reporting Readiness Checklist, which consolidates the information in this blog. Feel free to download and use it to establish an effective Incident Reporting Program in your company or organization.

Pilko & Associates “Did You Know”

Quarterly publications that keep the market and our clients up-to-date on important issues of operational, EHS and merger and acquisition risk control.


Today the subject of “risk culture” and the role that a lack of risk culture played in the financial meltdown in 2007/8 is a heavily discussed topic. Having a culture that understands risk and makes the right decisions at all levels in the organization is critically important to Operational Risks such as fires, explosions, leaks and spills, and fatalities. Publications by Andrew Hopkins on the Texas City Refinery explosion and the Macondo well blowout, as well as Chemical Safety Board disaster reports, all agree that the ability of an organization to learn from their and others’ mistakes to improve risk control is one of the keys to prevention.

Organizations that don’t have a culture of learning from mistakes – or learning from information and expertise at the front line – increase enterprise risk. At the same time, rank-and-file employees often have greater insight into potential risks than senior leaders, who are far removed from most Operational Risks due to the nature of their positions.

What is your risk control culture? And how open, transparent and honest is your organization in the identification, analysis and mitigation of risk? The future of your people, your shareholder value and your business is at stake.


A central theme in the Trump Administration is reducing the regulatory burden on business. Safety and environmental regulations represent a major component of this burden. In the United States alone, businesses spend an estimated $192 billion per year to comply with financial, safety and environmental regulations.

Smart regulatory reform could provide a significant benefit for the U.S. industrial sector in both reduced costs and improved innovation. Leading energy and chemical companies have gradually shifted focus towards Controlling Operational/EHS Risks globally. We assume this shift will not significantly change regardless of U.S. regulatory reform.
We believe the importance of effective operational risk control will be more important than ever. Even in an environment of relaxed regulatory requirements and reduced enforcement, operations and EHS leaders will need to ensure the right resources, processes, methods and measures are in place to effectively Control Operational/EHS Risks to people, assets, production, the community and brand/reputational value.



- March 22, 2018, Singapore
- June 14, 2018, London
- September 2018, New York
- November 2018, Houston


- February 8, 2018, Calgary
- November 14, 2018, Houston


- January 25, 2018, Houston

Please Note: Registration by invitation only. Please contact Pilko & Associates for more information by clicking here.

Our TRANSACTIONS VALUE ROUNDTABLE an invitation-only 1/2 day event, designed to assist you in increasing control of your transaction risks.

Preceded by a hosted Networking Reception the evening before, the format is a private Roundtable designed for unscripted, lively discussion about the current state of deal markets and frank conversations about what buyers and sellers are doing to get deals done.

Network, cultivate and strengthen relationships with 24+ senior Deal Leaders and Deal Advisors in the energy and chemical industries by co-sponsoring our Transactions Roundtable, held throughout North America, Europe and Asia. For more information, please email events@pilko.com.

We help companies increase risk control. Contact us to see how you can use our OPERATIONAL/EHS GOVERNANCE FORUM to help your business increase control of operational and EHS risk.

The OPERATIONAL/EHS GOVERNANCE FORUM is a members-only service that brings together energy and chemical companies four times annually for a half-day discussion on business and operational risk management topics.

The number of participants is limited to an exclusive few to allow a robust and free flowing exchange of ideas. Participants are a mix of Outside Directors, Corporate Officers and Heads of EHS. The frank interplay between individuals from these different functions has been invaluable for our members. For more information, please email events@pilko.com.


Global advisors to chemical and energy companies on Operational and EHS risk control for acquisitions, mergers, joint ventures and divestitures.


Our global footprint includes advisors in 32 countries across six continents. We continue to grow our global presence to be where you need us to be.


We have hosted 59 invitation-only Transactions Roundtables in Asia, Europe and North America since 2001.


Bringing operations, EHS, and transactions risk control to corporate officers and boards in the energy and chemicals industry.



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