Leadership: A Fundamental Ingredient in Successfully Identifying Operational Risks

Process Hazards Analysis (PHA) have been used in the past by industry to recognise operational risks, especially in high hazard processes. PHAs have also evolved to serve a wider range of operational needs beyond the traditional chemical processing industries. The systems, tools and practitioners have become sophisticated and PHAs are no longer a novel concept.  

Unfortunately, opportunities by industry in properly identifying, assessing and strengthening safeguards for high risk operations have been missed due to the lack of leadership engagement and support.

Compared to enterprise risks in organisations, operational risks are not as well understood or appreciated by senior leadership or line management. Where risks are concerned, the discussions at the C-suite are usually limited to financial or compliance risks. Operational risks (i.e. process safety risks) are generally discussed when a critical failure has occurred and requires a very high level of intervention and mitigation. 

The high resource demands of PHAs and the added implementation of PHA outputs tends not to endear itself to business unit managers or asset owners. PHAs are seen as discrete pieces of technical or risk management work-streams, and can easily be isolated from key management decision-making processes.

When process safety risks are effectively managed by first identifying critical process hazards, leadership involvement at all stages of PHAs is fundamental. By actively supporting, resourcing and guiding the technical expertise in conducting risk analysis work; organisations are much better placed in protecting their business value and eventually growing that value.

Our discussion will look at how leadership functions can be integrated into all aspects of the PHA process, so that the PHA outcomes are successful.