Risk Management is about taking practical steps to protect people from harm, suffering and ill health. Our approach is to adopt the principles of ‘Sensible Risk Management’ as tabled by the Health and Safety Commission:
Sensible Risk Management is about:
- Ensuring that workers and the public are properly protected
- Providing overall benefit to society by balancing benefits and risks, with a focus on reducing real risks – both those which arise more often and those with serious consequences
- Enabling innovation and learning not stifling them
- Ensuring that those who create risks manage them responsibly and understand that failure to manage real risks responsibly is likely to lead to robust action
- Enabling individuals to understand that as well as the right to protection, they also have to exercise responsibility
The following paragraphs will give you an overview of our approach and reasoning to the perceptions of and responses to risk:
Individual differences affecting the ranking of risks: There are individual differences between human beings, and these differences affect responses to external influences. One person for example may readily accept newly introduced safety control measures, whilst another may resist them. Understanding how individual differences can arise may help to influence behaviour by enabling managers to formulate control systems which work with individual characteristics rather than against them. It can be as simple as the manner of approach made to an individual, which will decide if he or she will co-operate or not. An understanding of individual differences between people is necessary before the most appropriate form of approach can be decided upon. The principal Individual differences affecting the ranking of risks are: cultural factors, personality, physically and anthropometrical differences.
The recognition process or how people interpret information is dependent upon their physical and mental capabilities, experience, attitudes, socialisation etc. In the field of health and safety, perception of risk is all-important, but is complicated by the fact that people often perceive things in different ways. Each individual within a group may perceive the same situation in different ways, reacting differently accordingly.
The evaluation of risk consequences: It well known that people draw distinctions between various kinds of risk and so perceive them differently. Personal safety, health risks, and threats to societal health and safety are all viewed in different ways. As well as considering the potential consequences that the risk presents, people seem to make judgments about a number of other factors before they decide how they regard risk. These other factors include:
Whether there is any choice in entering or leaving the circumstances of danger
- Who has control of the potential for harm – the individual, some other person, or factors beyond human control
- The foreseeability of the danger
- The degree and extent of harm that could be caused, and the dramatic or vivid nature of the overall consequences
Taking on board all of the above, risk aversion is an area of concern as people’s perception, etc of the risk together with their understanding and experience of the hazard may create a loathing, dislike or fear for undertaking a process for which they perceive the risks disproportionate to the actual risk presented.
The assessment of economic factors affecting the acceptance of risk is one of the key fundamentals of risk management / risk control. The four main approaches to risk control are: risk avoidance, risk retention, risk transfer and risk reduction. Economic factors affecting the acceptance of risk come into play when evaluating risks. Detailed below is an overview of the four risk control measures:
- Risk avoidance is perhaps the absolute form of risk control and involves the elimination of risk by discontinuing the activity which is its source; provided that it can be readily identified. E.g. a transport company withdrawing from high risk routes, where its vehicles are likely to be subjected to attack or vandalism.
- Risk retention is the situation when the organisation retains or carries the risk itself. This is done either with or without knowledge.
- With knowledge is where hazards have been identified and risk evaluated, and the organisation consciously decides that it is willing to meet any losses that result, from its own resources. An example might be where having assessed the risks, and taking account of high insurance excess figure, an organisation decides to limit its insurance, e.g. excluding theft from offices.
- Without knowledge is the situation usually arises from a lack of management control. There is no knowledge of the risk because risk assessment has either not taken place, or has been performed poorly. In a without knowledge situation, the organisation is carrying risk without even knowing, and almost certainly without any idea of the possible consequences should the risks be realised. An example might be where a company does not realise that toxic, explosive or flammable deposits are present in the ground in an area of its site which it intends to develop.
- Risk transfer is where a third party agrees to accept or carry risk on the organisations behalf, the most common example is insurance. Insurance companies enter into a legal agreement with organisation’s that, subject to certain conditions, require them to pay compensation (usually financial) for specified losses which occur during the course of the business. In return the organisation pays a regular insurance premium to the insurance company whether any claims are made or not.
- Risk reduction is a strategy that finds its parallel in good health and safety management practice. It is one where hazards and risks are properly considered, and logical, appropriate control measures are introduced to either eliminate or control risk. In risk management, risk that may affect the business and its assets is considered, as well as that which may affect people’s safety and health. Risk reduction should integrate all possible causes of loss, damage or injury into overall loss control system.