King III and Corporate Governance from 2010

I am sure we are all aware of the King II report and its impact on the approach to Risk Management in South Africa. The draft King III report was published for comment in April this year and will more than likely be legislated early next year. The following key issues stand out in the King III report as opposed to the King II report: 1.It has adopted an "apply or explain" basis instead of the previous "comply or explain". This in part is because the report has been expanded to include all entities and not only JSE listed ones. This will allow medium to small entities to apply the principles selectively, but with an explanation as to why certain principles have not been met or implemented. It thus has a more self regulatory basis. 2. The code will be legislated, whereas the previous report merely served as a code of best practice. 3. It has a risk based approach rather than a pure legal compliance concept. KPMG have summarized the Risk Management portion of the report as follows: Risk Management Risk management is inseparable from company’s strategic and business processes. The Board is responsible for the risk management process (including company’s risk appetite,capacity and tolerance limits) and may delegate risk management to a Risk Committee. The Risk Committee: Can be comprised of executive, nonexecutive directors, management and independent risk management experts with a minimum of three members - Should be chaired by a non-executive director and meet at least twice per annum - Consider risk maturity, risk management activities, significant risks, material losses or changes in risks, due diligence activities, IT risks and risk reporting. Management is responsible for implementing the risk management process and risk management should be embedded in the company, practised daily by staff, and risks should be assessed on an ongoing basis. The Board should: - Ensure regular (at least annual),comprehensive risk assessments and must review the risk register - Ensure risk identification is directed towards company objectives - Ensure quantification, appropriate response to key risks and validation with stakeholders - Adopt a risk management plan and approve the company’s chosen risk philosophy - Approve key risk indicators and tolerance levels. (Internal audit to provide independent assurance on the risk management process) - Disclose risk tolerance and report on the effectiveness of risk management in the annual report - Ensure the company’s reputational risk is protected - Determine the extent sustainability issues are addressed and reported (e.g. through stakeholder risk assessment, ethics risk assessment, environmental risk assessment and human capital considerations) - Take ownership of IT governance including IT security.

Why fire risk assessment is important for your business

Fire poses a major threat to all businesses and should be of prime importance to any managing director or boss. The consequences of a fire can be far reaching and can even leave a business in the same state as the burnt out premises; ruined. If operating in a single premises the effects can be even more devastating, hence the importance of fire risk assessment procedures are an essential component of any health and safety protocol. For companies who house supplies and other integral business elements in their premises the effects of fire can be even more damaging. In terms of continuity of supply and relationships with buyers, the effects can sometimes never be recouped. An efficient assessment of the risk that fire may pose to your business should be regularly carried out to ensure not only the safety of your staff members, but also to protect your business. An employer's own conscience should force them to undertake a thorough fire risk assessment, although legal requirements for employers are extensive in ensuring staff safety. The process of fire risk assessment involves identifying the various sources of ignition that may be present in your business. Not only should an assessment identify the ignition points but also the levels of combustible materials in a workplace. Such materials include soft furnishings and elements of the structure such as a timber frame or desks. The purpose of a fire risk assessment is to minimise the potential for fire in your business premises. The risk assessment should involve the identification and if possible the elimination of hazards in the workplace. If these elements cannot be eliminated from the day to day uses of the business, fire risk assessment should advise ways in which the hazards can be dealt with and avoided. Usually safe working methods can be developed that put hazardous practises as far away from combustible materials and ignition sources as possible. This may mean that your risk assessment will take a few days to get a true understanding of the patterns of work in your business. Also, as part of the assessment, the people who work in your premises will be examined. This may include assessing the risk staff members, customers and other members of the public that may have access to your premises. The number of people present in the premises in the event of a fire will also be estimated by the assessment of visitor numbers over a few days. As a result of this information escape routes and fire safety protocol will be part of the risk assessment to ensure evacuation is carried out efficiently and effectively in the event of fire. As well a the means of escape, fire fighting apparatus and equipment will be assessed as well as the number of people who are able to operate this apparatus in an emergency. Considerations of age, health and agility in terms of the people present on the premises will also be part of the risk assessment. These factors are important especially when considering different working environments such as nurseries, factories or care homes. As a result action plans can vary immensely. The risk assessment report will ensure that there are sufficient staff members present to cope with a fire should it break out. Also the action plan should focus upon minimising the risk of fire in the first place, by understanding the causes of fire and elements involved, prevention should be more effective. Assessment will also include an appraisal of the current action plan and the working order of the various fire fighting equipment in a business premises. Fire is a risk that worries most employers, an assessment can inform bosses where they are with ensuring the safety of there staff and how much they need to do to increase this safety. As a legal requirement, following the recommendations of the report is a vital legislative requirement.

Mine Deaths - Tragedy or Economy?

I woke up this morning to a beautiful Zululand day, and suddenly my heart went out to the families of those men killed in our mines the last two weeks. In an article in the Mining news the General Secretary of Cosatu called these deaths a national disgrace. Now im not a political activist, but i cant agree more. We are always willing to show solidarity and concern after having killed people by slosing sections of our operations whilst investigations are being done, but never commit to identifying pre-emptors to these tragedies, closing areas to afford us the opportunity to implement control measures to prevent these deaths. Remove the fatality rate measurement - are we really willing to measure our success against the number of people we kill??? Tighten legislation and make directors, managers and owners directly liable for these deaths, while in the same breath directors, managers and owners should start taking action against employees who fail to adhere to safety requirements. Its time for action - no more deaths - no more debilitating injuries - no more excuses - no more clever post incident solutions. In OHSAS 18001 we have a world class health and safety management system so its not that we dont know its just that we dont care enough. Maybe we are still a third world country if we only act when legislation is enforced! Read the article: Deaths a National disgrace Make a difference: Make every day a "Zero Harm" day, show that you care by acting, stop justifying ludicrous lagging indicators like fatality rates and define and manage proper leading indicators. Yes mining is dangerous but there is no need for it to be deadly! Its good to work, but having to die for your work is criminal. Remember the families who no longer can share this sunday with their loved ones

Health and Safety Program effectiveness - Employee participation

I am sure we have all stopped and asked ourselves, why is it not working? We have the documentation; we have appointed the necessary people yet we still keep having negative health and safety experiences. The simple truth is that most programs fail to collaborate and consequently there is a lack of participation and commitment at all levels. Below we have a typical, yet simple matrix depicting the levels of employee participation: 1. Worker participation is not encouraged. Incentive programs are present which have the effect of discouraging reporting of incidents, injuries, potential hazards or symptoms. Employee representatives are not involved in the health and safety program, it is left to the appointed safety officer. 2. Workers and their representatives can participate freely in safety and health activities at the worksite without fear of reprisal. Procedures are in place for communication between employer and workers on health and safety matters. Workers are paid while performing safety activities. 3. Workers and their representatives are involved in the health and safety program, involved in inspection of work areas, and are permitted to observe monitoring programs and receive results. Workers' and representatives' right of access to information is understood by workers and recognized by management. A documented procedure is in place for raising complaints of hazards or discrimination and receiving timely employer responses. 4. Workers and their representatives participate in workplace analysis, inspections and investigations, as well as the development of control strategies throughout the organization. They have the necessary training and education to participate in such activities. Workers and their representatives have access to all pertinent health and safety information, including safety reports and audits. Workers are informed of their right to refuse job assignments that pose serious hazards to themselves pending management response. 5. Workers and their representatives participate fully in development of the safety and health program and conduct of training and education. Workers participate in audits; program reviews conducted by management or third parties, and collection of samples for monitoring purposes, and have necessary training and education to participate in such activities. Employer encourages and authorizes employees to stop activities that present potentially serious safety and health hazards. How participative is your approach to Health and Safety? • Is your system managed by a third party? • Is your system a compliance dictatorship? • Is your system a business partnership? Informed, competent, empowered teams react safely to their environment.

Magic Milestones - RB720

Magic Milestones - I came across this photo in my archive last night and it brought back some great memories. This project brought about some great friendships and construction safety initiatives which changed the face of safety. This was our first true measurement of safety maturity - 250 000 incident free man-hours. Safety is about people and when we start measuring Zero exposure instead of zero fatalities then we are on the right road. Thanks to all those people who I have walked this long road with - its your passion that makes the journey possible.

3 Tips to increase Employee compliance

As we have all been told and expewrienced 88% of all accidents are caused by unsafe acts of workers. The obvious solution to this problem would be to make sure your employees comply with health and safety laws. Tip 1: Include a health and safety clause in all contracts of employment. Include a clause in your employees’ contracts of employment stating that “failure to adhere to health and safety regulations may lead to disciplinary action and/or possible dismissal”. This rule must be applied consistently and continuously to build a culture of safety awareness and ensure that workers can’t claim they’re being singled out for punishment. Tip 2: Your employees can be fined R50 000. If the Department of Labour does an inspection of your workplace and your employee is found guilty of negligence or wilful misconduct, he could be fined. The maximum penalty for non-compliance is R50 000 or 1 year in jail – or both! Use the safety test in the Health & Safety Advisor to help your employees understand their health and safety obligations. Tip 3: Stop employees damaging safety equipment. In terms of the OHSAct, it’s an offence to intentionally or recklessly misuse or damage any safety equipment. Ensure that this rule is known and enforced. You can take disciplinary action in cases of abuse. Take time to include health and safety in your human resources policies, making it part of contracts and including clear disciplinary guidelines. Health and Safety is everyones responsibility - not just the employers.

Having lunch with God

A little boy wanted to meet God. He knew it was a long trip to where God lived, so he packed his suitcase with a bag of potato chips and a six-pack of root beer (iron brew in SA context) and started his journey. When he had gone about three blocks, he met an old woman. She was sitting in the park, just staring at some pigeons. The boy sat down next to her and opened his suitcase. He was about to take a drink from his root beer when he noticed that the old lady looked hungry, so he offered her some chips. She gratefully accepted it and smiled at him. Her smile was so pretty that the boy wanted to see it again, so he offered her a root beer. Again, she smiled at him. The boy was delighted! They sat there all afternoon eating and smiling, but they never said a word. As twilight approached, the boy realized how tired he was and he got up to leave; but before he had gone more than a few steps, he turned around, ran back to the old woman, and gave her a hug. She gave him her biggest smile ever. When the boy opened the door to his own house a short time later, his mother was surprised by the look of joy on his face. She asked him, "What did you do today that made you so happy?" He replied, "I had lunch with God." But before his mother could respond, he added, "You know what? She's got the most beautiful smile I've ever seen!" Meanwhile, the old woman, also radiant with joy, returned to her home. Her son was stunned by the look of peace on her face and he asked, "Mother, what did you do today that made you so happy?" She replied! "I ate potato chips in the park with God." However, before her son responded, she added, "You know, he's much younger than I expected." Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. People come into our lives for a reason, a season, or a lifetime! Embrace all equally! Have lunch with God ....... bring chips.