RAC
RISK MANAGEMENT
13


Taking the Risk out of Risk Management





CEO's, MD's and Directors understand and accept that their health and safety responsi-bilities are fundamental, considerable and inclusive
Ready to Gamble?
Now, as never before, businesses are being confronted with complex and seemingly ever expanding health and safety issues. Failure by organisations to respond to issues such as occupational road risk management can lead to social reaction and legal intervention. Doing nothing is a risky option.
Today, heavy-duty weapons are being aimed directly at the boardrooms of every company in the land. Their increased use will see more and more prosecutions as companies fail in their "duty of care" responsibilities, as well as an explosion of unbudgeted and costly compensation payouts negotiated by "no win - no fee" companies.

Don't leave it to chance!
Whilst individual and corporate attitudes towards health and safety might vary, often substantially, these complexities are here to stay. An essential facet of holistic corporate governance is that CEO's, MD's and Directors understand and accept that their health and safety responsibilities are fundamental, considerable and inclusive, which by their very nature must rank equally and unequivocally with all other functions of the business. If the senior team in your business are taking a laissez faire approach to occupational road risk management, then you probably have a real problem that requires prompt action.

In spite of overwhelming evidence that driving a vehicle on company business rates amongst the most hazardous of all vocational activities, most employers still "accept" that work-related road accidents are the inevitable cost of doing business.

The majority of crashes involve both substandard practices and substandard conditions

Don't be a chancer, ignorance won't be bliss. Under current rules, Police forces are empowered to apply the same aggressive investigative methods to fatal road accidents as they do to murder investigations. This clearly includes establishing the causes of work-related road accidents. If it can be shown that the crash was caused by excessive workload, fatigue, lack of training, faulty vehicle caused through inadequate maintenance and/or other deficiencies in the "managing" process then companies can expect to face prosecution.

Last throw of the dice?
Three elements people, vehicles and environment individually or in their interactions are the major sources of causes that contribute to accidents. A study of road crash causation in the United Kingdom indicates that in 95% of all crashes human error is a contributory factor. There are two distinct types of error - genuine mistakes and deliberate violations. Most fall unto the latter category. Errors arise as a result of information-processing problems and may be understood in relation to the cognitive function of the individual and can be minimised by practical training, redesign of the human-vehicle interface, memory aids, better information and the like.
Violations have a large motivational component.
They are a social phenomenon and can only be understood in a broader organisational or social context, they are dealt with by changing attitudes, beliefs and norms and by improving the overall safety culture.
In other words, vehicle crashes do not necessarily show that a company has a driving problem; they do however show that it has a safety problem, and a safety problem is, quite simply, a management problem. It follows, therefore, for any work-related road risk strategy to work successfully over the medium to long term it is necessary to deal with both errors and violations simultaneously, not just on an individual, personal level but also on a corporate basis.

90% of companies unwittingly play the lottery

The majority of crashes involve both substandard practices and substandard conditions, and these are only the symptoms. Behind the symptoms are the basic causes and behind the basic causes are the deficiencies in the management system. For example, tailgating is a substandard practice and obviously a high-risk exercise; but tailgating in the wet means the substandard (wet) condition also becomes a relevant factor; however if we now add a basic cause, say fatigue, e.g., tailgating in the wet because the individual had momentarily fallen asleep then we ave the potential for disaster, not only for those immediately involved but also for his/her employer if it can be established that such fatigue arose from unsafe work patterns, lack of policy and etc., areas over which the employer bears direct responsibility.
Although there is a tacit acceptance by employers, of the need to reduce road accidents, the reality is that very few recognise that such matters are de-facto health and safety issues. All too frequently the solution is seen in cost terms only with outcomes that appear inconsistent and difficult to quantify. Sadly out of some 4 million fleet vehicles on UK streets less than 10% of vehicle users actually participate in any form of proactive risk management programme or even safety training provided by their employers, in spite of spectacular and sustainable results from those companies that do. That means 90% of organisations are unwittingly playing the lottery with heir employees safety, consequently endangering future reputation and risking damage to brand names that are priceless.
Industrial accidents are no longer restricted to company premises
The resolution isn't rocket science - once individuals and companies accept that road accidents are nothing more than "industrial" accidents then both implementation and a sustainable solution is viable and cost effective.
Therefore, companies need to develop a strategic approach to occupational road risk management, which must not only meet corporate obligations to ealth & Safety, Road Traffic and Environmental legislation, but also directly prevent and control of losses.
These relate to any manager's work regardless of level or title. The person who manages professionally knows the safety/loss control programme; knows the standards; plans and rganises the work to meet the standards; leads people to attain the standards; measures performance of self and others; evaluates results and needs; commends and constructively corrects performance. This is management control. Without it the cause and effect sequence begins and, unless corrected in time, leads to losses.
However, control in isolation is not the simple answer and Directors must lead by example. Road Safety Policy needs to be focused and unambiguous with achievable objectives. The systems and procedures necessary to achieve policy objectives must be communicated to all who drive on corporate business, implemented unequivocally throughout the organisation and monitored consistently and routinely by all management levels to ensure policy compliance.

The problem has always been that management rarely see a complete operating picture

Control is one of the four essential management unctions; plan, organise, lead and control.

See the whole picture
The problem has always been that management rarely see a complete operating picture. Constituent risk functions e.g. policy objectives, recruitment, induction, training, accident reporting, accident classification, accident investigation, routine vehicle checks, performance and appraisal and so on are often "managed" quite separately; perhaps only by vehicle or cost centre on a departmental basis; maybe even outsourced. This means that management cannot even begin to identify their problem let alone have standards or measurable performance benchmarks which can be expressed in quantifiable meaningful and objective terms.

A step-by-step approach to reducing risk
The first step is to bring all the constituent risk functions associated with fleet operations into a single focused report (Safety Audit). This provides directors with a total overview of current occupational road risk practices, including a financial forecast of fleet operating costs. This sets the standards against which future performance can be measured.

Step two is aimed at identifying and evaluating any and all of the risk exposures and/or contributory factors arising from or contained within, existing management policies, systems and procedures.

Step three is to devise the strategy, agree the objectives, i.e., the reduction in claims experience, by how much and over what time scale. This also includes where necessary, developing and/or improving the policies, systems and documentation imperative to the agreed outcomes.

Step four is to implement the agreed plan. This includes total support throughout the cultural change process.

Step five is to implement the yardstick by which the effectiveness of the strategy can be measured over an extended timeframe.

A safety audit will typically cost around £1,000 per day and may incorporate several days consultancy time to cover a review of existing procedures, meeting key staff and documenting future recommendations. However, a professional audit does not replace management responsibility for dealing with ongoing issues and should not be considered as a quick and low cost method to tick the safety box for another year.
The principle behind this approach is to ensure that actions are focused in such a way that they provide a long-term, sustainable solution to occupational road risk and environmental problems. Utilising the chain of command, accountability and "duty of care" responsibility of each office holder within the management hierarchy will provide, not just increased safety but measurable improvements in efficiency, quality, productivity and cost control.

The do nothing gamble - may cost you dear!

So in the face of escalating costs and rising public concern over work-related road safety issues, it seems a choice exists between seeking expertise, defining the problems and taking timely action to boost defences, or waiting for the "high tide" of hidden costs and/or litigation to cascade through the organisation.
How do you find your way through the risk management maze?
RAC will work with you to take the risk out of risk management! They'll show you how a structured risk management approach will pay off for your business.

For more information call an RAC Risk Management Advisor on 0870 06 2606 and put your mind at rest!



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