(41b) How Does Process Safety Management Contribute to Enterprise Risk Management?

Many companies moving away from “safety” toward “risk” and are in the process of developing a risk registry. While conceptualizing risk is important, it can be hard to track at a high-level as actual risk is much more granular. Risk Management needs to be rooted in some sort of operating model such as ISO 31000. Companies also need to define their risk tolerance (or risk appetite). If mitigated risk exceeds their risk tolerance, further action is required.

This presentation examines how companies are developing structured processes to address their Operational Risks as part of an Enterprise Risk framework to address compliance while focusing on profitability and production.

Many companies start out managing risk from a “qualitative” perspective. As they evolve into more “semi-quantitative” risk management techniques, they realize that risk is dynamic in nature. This allows organizations to proactively detect and manage risk changes in near-real time down to the process, material, and equipment level.

The result is much more sustainable risk management at an enterprise level. While Process Safety Management is a starting point, true Enterprise Risk Management (ERM) involves other departments. In the end, whoever does a better job of minimizing their losses will achieve a higher level of operational excellence and a competitive advantage.