Business risk management competency for board members
The 2005 Buncefield Incident was not only the largest peacetime explosion in Europe but went on to be the costliest industrial disaster in UK history costing £1 billion. The Buncefield Major Incident Investigation Board stated ‘Clear and positive process safety leadership is at the core of a major hazard business and is vital to ensure that risks are effectively managed’ (Buncefield MIIB, 2008).
High hazard industries have the potential for catastrophic incidents involving large-scale loss of life, harm to health and environmental damage. Putting measures in place to prevent these incidents is not only an essential part of corporate social responsibility but is also fundamental to the effective running of the business. (OECD, 2012).
What this standard is
This new standard offers a clear framework for board meeting attendees to develop and demonstrate the competencies required to manage the unique risks posed by high-hazard operations. It combines proven governance principles, technical safety insights, and best practices from across multiple industries. It has been drafted in affiliation with the Institute of Directors (IoD) that combines corporate governance, risk management and safety practice together.
Why it matters
- Protect people and the environment: Board decisions directly impact frontline safety. Weak oversight can lead to catastrophic incidents with long-lasting human and environmental harm.
- Fulfil legal responsibilities: Directors face both personal and corporate liability if they fail to manage risks effectively. Regulators, investors, and communities demand visible, accountable leadership.
- Safeguard corporate reputation: A major incident can severely damage public trust, erode investor confidence, and compromise business continuity. Robust risk management at the highest level protects your company’s standing.
Key benefits of adoption
- Stronger governance: Align your board with recognised best practices, meeting ESG and regulatory expectations.
- Effective decision-making: Gain clarity on how operational risks and corporate strategy intersect, ensuring informed, accountable leadership.
- Future-proof leadership: Embed a culture of continuous professional development and structured succession planning to maintain board resilience.
- Increased stakeholder trust: Demonstrate proactive commitment to major accident prevention and sustainable business operations.
About the standard
This standard of competence has been developed with the involvement of high hazard industry leaders, industry trade associations and leadership experts to define expectations of risk management competency within high hazard industries such as petrochemical, nuclear, rail, offshore energy, bulk liquid and gaseous storage, and biological research, amongst others. The work has been facilitated by the Process Safety Forum (PSF) who are custodians of the document.
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