Process Safety Leadership from the Boardroom to the Frontline

• Editorial: Wiley-AIChE
• Año: 2019
• ISBN:
  9781119519386
• Edición: 1
• Categoría: Technik & Maschinenbau
• Categoría: Chemie- & Biochemietechnik

The definitive leadership guide on safe practices

The release of chemicals and other hazardous materials pose significant, potentially catastrophic threats worldwide. An alarming number of such events, all of which are preventable, occur too often. Reducing the frequency of serious incidents is a fundamental responsibility of leadership at all levels, from frontline managers and supervisors to C-suite executives and the board of directors as well. Process Safety Leadership from the Boardroom to the Frontline is a practical, authoritative guide that clearly demonstrates how to create a viable culture of safety within an organization, implement and maintain disciplined management systems, and address the risks of process safety deficiencies.

The most important factor in any management system is leadership. For chemical process safety management, effective and informed leadership provides direction, reinforces commitment, and drives responsibility. Written by experts from the Center for Chemical Process Safety, the world's largest provider of engineering curriculum materials for process safety, this pragmatic book contains the critical information and guidelines required to lead and manage process safety. Detailed yet accessible chapters examine topics such as strengthening management system accountability, driving operation within constraints, ensuring corporate memory, verifying execution, and more. Designed to be frequently used, shared, and discussed by leadership teams throughout an organization, this indispensable resource:

• Demonstrates the many ways process safety benefits an organization, based on benchmarking and broad industrial experience
• Develops skills and expands knowledge needed to drive consistent, reliable process safety performance
• Describes essential behaviors and actions for leaders to drive excellence in process safety cultures and disciplined management systems
• Helps establish risk criteria and safeguards for companies
• Presents new and previously unpublished experiences, approaches, and thinking

Written for executives, plant leaders, functional managers, frontline supervisors and also individual contributors, Process Safety Leadership from the Boardroom to the Frontline provides a much-needed guide for instituting safe practices within a company.

The Center for Chemical Process Safety (CCPS) has been the world leader in developing and disseminating information on process safety management and technology since 1985. The CCPS, an industry technology alliance of the American Institute of Chemical Engineers (AIChE), has published over 100 books in its process safety guidelines and process safety concepts series, and over 10 training modules through its Safety in Chemical Engineering Education (SAChE) series.

1
THE BUSINESS CASE FOR PROCESS SAFETY

A business case for process safety should not be necessary. The need to protect workers, the community, and the environment is as obvious as the need to protect market share, provide and protect shareholder value, and make payroll. But with the many daily demands of business, leaders can sometimes leave the obvious behind. When a company and its leaders leave process safety behind, they lose out on the significant financial and organizational benefits described in this chapter. Before you embark on improving your leadership skills related to process safety, you need to understand these benefits.

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Process safety is an ethical imperative that comes with significant financial benefits.

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A benchmark survey of CCPS member companies (Ref. 1.1) ¹, combined with data from other sources (Refs. 1.2‐1.4), has provided conclusive evidence that methodically implementing process safety delivers five benefits that help a company to sustainability. These benefits are summarized Fig. 1.1 and discussed in this chapter.

Figure 1.1 The Five Benefits of Process Safety

1.1 Corporate Social Responsibility

Consistently strong process safety performance helps make your company more attractive to investors, employees, communities, governments, and insurers. Maintaining a strong process safety commitment over time tells critical stakeholders that you care about them and your employees, and that you are managing the company well.

These benefits reflect directly in the primary measurement of value – share price. A review of 12 recent major incidents in 4 countries and 4 industry sectors shows the impact of these incidents on share price ².

As Fig. 1.2 shows, after incidents, share prices immediately begin to drop relative to the market. The losses can continue for a year or more. Following Bhopal, Union Carbide's stock price dropped continuously relative to the market for 15 years.

Figure 1.2 Impact of Process Safety Incidents on Share Price

Share price compared to month-end before incident, normalized by the relevant market index to eliminate gross market trends.

The decrease in share price includes losses well beyond tangible losses alone. The difference, simply put, is shareholder perception. Nearly every stock is priced well above the value of its tangible assets. This premium reflects the confidence of investors in the company's ability to manage, control risk, innovate, and continue to grow sustainably. Practices for showing this premium on balance sheets vary. In some cases, balance sheet terms such as Intangible Assets or Goodwill are used to describe all or a portion of this premium.

This shareholder confidence premium is built – or destroyed – by factors directly linked to process safety:

• Actual risk and perception of risk.
• Corporate image.
• Support for the company in the communities in which it operates.
• Employee engagement and attitudes: is the company a preferred place to work?
• Trust in the company from investors, politicians, regulators, activists, and the press.

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Privately owned? This still applies.

Your company valuation reflects more than the bottom line. It also depends on the external perception of your ability to manage, control risk, and grow sustainably.

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1.2 Business Flexibility

Companies that manage process safety effectively earn the flexibility to freely manage their businesses and grow profitably, while satisfying all stakeholders – local communities, the public, regulatory authorities, governments, investors, and customers. Business flexibility results from earning the trust of the public and especially of the local community. It is your company's license to operate. And as with any license, those who award it can also revoke it.

Every incident represents a lost opportunity. When a major incident occurs, the company must divert resources to investigation, clean-up, and recovery, as well as legal and regulatory challenges. These resources could otherwise be focused on growth.

Major incidents can also significantly drain available cash. This can force companies to sell valuable assets, often at a fraction of their value – an additional lost opportunity. And for many companies, this can lead to the loss of the company and the livelihoods of every employee.

This flexibility benefits a company by:

• Allowing you to focus on growth and productivity, rather than damage control and recovery,
• Protecting cash flow from unexpected disruption,
• Proving your worthiness to hold a license to operate,
• Strengthening and maintaining good relationships with the local community; and
• Helping you obtain approvals for expansion permits or new facilities more quickly – a critical strength when implementing the new projects needed to compete effectively.

A major incident can weaken a company's ability to respond to competitors’ business actions. A company in a weakened state may also become subject to an undesirable takeover. Additionally, incidents can lead to new regulations. This impacts your company and everyone throughout the industry.

1.3 Loss Prevention

Companies that display strong process safety leadership through competence, culture, and disciplined management receive a windfall benefit every year. This income shows up on the bottom line in the savings from incidents that did not occur.

Some com...