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Risk Management Bow Tie - PDF

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Risk Management Bow Tie - PDF Powered By Docstoc
					[COMPLIANCE TIPS]
By: JAMES PHIPPS
   Director of Risk & Integrity Management
   ABS Consulting



Bow-tie diagrams: Increasing benefits in the risk
management process
    Bow-tie diagrams are a pictorial display     development of risk identification and sub-       controls via effective ratings.                   query the database in this way adds
of the relationship between the various com-     sequent mitigation. The manner and means             ➢ Capturing shortfalls and assigning           increased flexibility.
ponents that result from what is commonly        by which a risk is controlled are delivered       and tracking actions.                                 The bow-tie process can be used for a
termed the Hazard and Effects Management         through people and procedures, which are                                                            number of applications:
Process. The diagrams depict the relation-       also identified.                                  Critical tasks                                        ➢ Supports management of major haz-
ship between hazards, threats, barriers, esca-                                                         It is through the linking of critical tasks   ards.
lation factors, consequences and controls in     Developing the bow-tie                            to controlling measures that the bow-tie              ➢ Unlocks relationships between haz-
the form of a qualitative risk assessment.           In its simplest sense, the bow-tie can just   demonstrates the implementation of a              ards, controls and tasks (often hidden in
With their roots well established within the     be a pictorial relationship of the hazards that   management system in managing the risk            paper-based systems).
traditional high hazard oil, gas and petro-      can threaten the business through to the          associated with hazards. Each controlling             ➢ Bow-tie diagram summarizes hazard
chemical industries, the concept is increas-     identification of how these hazards can be        measure should have at least one support-         and effects analysis.
ingly being adopted by other business sec-       realized and what consequences may result.        ing task, to ensure that the integrity of each        ➢ Used for hazard awareness training.
tors, including transportation, finance,         The controlling measures are also shown.          control can be maintained. The critical               ➢ Preparation of emergency exercises.
commercial and medicine. In fact, any                Subject to the nature of the bow-tie tool     tasks are required to be performed, under-            ➢ Hazard gap analysis.
industry — or process that is exposed to risk    used and processes by which information is        taken or executed by responsible and com-             ➢ Incident investigation.
— can benefit from this simplistic yet very      distilled or collected, the management sys-       petent persons.                                       ➢ Audit checklists/planning, e.g., criti-
powerful representation of a business man-       tem representation can be much more thor-             The purpose of the bow-tie is to be a         cal tasks can be used as the basis for audit
agement system.                                  ough and include:                                 dynamic reflection of the management sys-         checklists.
    A management system is a structured              ➢ Assigning actual levels of risk via a       tem which, through its clarity, can be readi-         ➢ Input into operating procedures, job
and documented process for managing              corporate risk matrix.                            ly contributed to and understood at all levels    descriptions, annual tasks and targets, defin-
risks within a company, to assure the pro-           ➢ Developing critical tasks that serve to     in an organization. For those industries that     ing individual roles and responsibilities, etc.
tection of people, the company’s assets and      illustrate how a control will be managed.         are regulated, the bow-tie is a clear state-          ➢ Possible linkage to other forms of
the business reputation, and for the protec-         ➢ The document management system              ment that a business is serious about under-      analysis, e.g., layer of protection analysis.
tion of the environment the company oper-        and linking of the relevant documents to the      standing and managing its risk profile.               ➢ Capture shortfalls and track remedial
ates within. A company management sys-           controls.                                             The bow-tie process is an extremely           actions.
tem will often follow a common structure,            ➢ Identification and assignment of per-       attractive presentation tool and there can be         For more information, contact James
starting with the business principles, fol-      sonnel to the critical tasks.                     numerous predefined reports that can be           Phipps at jphipps@absconsulting.com or
lowed by the progressive and continuous              ➢ Monitoring the performance of the           automatically generated. The ability to           call +44 1925 287344. ❑




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90      June/July 2008                                                                                                                                                      www.bicmagazine.com

				
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