Several factors are increasing the pressure on Board Members of Energy and Chemical companies to provide effective Governance of Operational/EHS Risks:
Our observation is that Board Governance for these Risks varies widely from company to company. Boards at some Energy companies provide effective oversight for these Risks and actively embrace evolving Best Practices for Governance. Other Boards lack the insights into the Operational/EHS Risks facing their company and do not provide the oversight required to avoid catastrophic incidents. The results are predictable.
The adage in Real Estate is that the three most important factors are “Location, Location, Location.” The three most important factors for avoiding Catastrophic Incidents are “Leadership, Leadership, Leadership.” And Leadership starts with the Board.
Boards regularly request that our team provide an objective Assessment of how effectively Risks are being managed — from the Board Room to the Control Room as well as the Organizational Capability of the organization to manage Risks on an ongoing basis. Once any Gaps are identified and prioritized, Action Plans can be developed to systematically close the Gaps and mitigate these Risks over time.