OPERATIONAL RISK MANAGEMENT:BUILDING A STRONG BUSINESS FOUNDATION

Key benefits of Operational Risk Management:

Maintain rightTo operate

Ensures that our people And our neighbors are

Safe and healthy

Ensures significant Savings through

Operational efficiencies

WHY OPERATIONAL RISK MANAGEMENT?A successful business must protect

key components of its operations:

Operational Risk Management prevents loss by identifying, evaluating and controlling hazards and differentially managing associated risks.

The most effective approach to risk management combines both technical and behavioural solutions.

• PEOPLE• ASSETS• ENVIRONMENT

INTEGRATION: THE KEY TO SUCCESSThe most effective approach to risk management

combines both technical and behavioral solutions.

Technical Model

• Defines hazards• Assesses associated risks

• Provides standards and procedures

• Sets the strategy and tactics

• Monitors performance• Sets up the organizational structure

Managing Processes

Mindsets and Behaviours

• Engages corporate leadership

• Encourages ownership of results

• Builds company-wide safety culture

• Motivates employees• Communicates expectations

• Promotes teamwork and collaboration

Capability Engine

all elements of an Operational Risk Management system must be addressed.

0 INCIDENTS AND 0 INJURIESTo achieve

THE RISK-BASED APPROACHNot all risks are the same.

Because organizations have limited

resources, it isn’t practical to respond

equally to all risks. • No one-size-fits-all approach to managing risk

• Risks are assessed by frequency and occurrence

• Proportionality is paramount in risk response

• Resources must be deployed to reap maximum benefit

THE HUMAN ELEMENT TO RISK

An Operational Risk Management

system will achieve better results

if it takes into account how

individuals interact with each

other, with facilities and

equipment, and with

management systems.

Its critical to consider the following human factors:

• Pressure and stress • Human factor integration• Human error and non-compliance

• Organizational change• Human reliability analysis• Training and competences

THE DUPONT BRADLEY CURVE: BENCHMARK GROWTH

Risk Reduction & Control

REACTIVE

Inci

dent

& In

jury

Rat

e

Ope

rati

onal

Exc

elle

nce

DEPENDENT INDEPENDENT INTERDEPENDENT

Value Generation & Operatio

nal Discip

lin

e

Stabilize & Maximize Efficiency

Shift in Values,Attitudes & Beliefs

• Time• Attention• Resources

Reactive

Employees do not take

responsibility and believe

safety is more a matter of

luck than management.

Dependent

People see safety as a

matter of following rules

that someone else makes.

Independent

Individuals take responsibility

for themselves, believing that

safety is personal and that

their own actions make a

difference.

Interdependent

Teams feel ownership for

safety, believing that

improvement can only be

achieved as a group—and

that zero injuries is an

attainable goal.

The real strength of a management system is reflected in

the cultural maturity of the enterprise. Indeed, we often

see correlations within an organization with elevated

culture and effective management processes having

superior technical practices and achieving better results:

CULTURAL MATURITY: TRUE MEASURE OF PROGRESSThe real strength of a management system is reflected in the cultural maturity of

the enterprise. As an organization moves towards an interdependent state, it

begins to excel in areas such as operations risk, productivity and overall

operations excellence.

DuPont Sustainable Solutions helps organizations achieve a mature and elevated culture that demonstrates all the ingredients of an engaged workforce, including problem solving and innovation capabilities.

sustainablesolutions.dupont.comi

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Embracinggrassroots leaders

Adopting a collaborative and

team-based culture

Focusing on learning and development

Building a sense of ownership and pride

have been proven to propel organizations towards operational excellence:

4 KEYORGANIZATIONALCHARACTERISTICS