Richard Somerville outlines Electricity North West’s approach to risk management.
Electricity North West is the local power network operator in North West England, one of 14 regional network in Great Britain. It’s our role to keep the lights on for millions of homes and businesses from Cheshire to Cumbria. With 1,600 employees, numerous contractors and many more stakeholders, managing risk is something we take very seriously.
We are proud of our strong commitment to having high ethical standards in the way we work and the way we manage our risks. Our vision is to be a company where risk management is embedded in our culture, protects our reputation, enhances our performance, and is complementary to us achieving our overall company vision of being ‘the leading energy delivery business’.
Key to achieving our vision is the belief that all our employees can play a role in identifying and managing risk. Our risk management policy statement is founded upon this belief and in partnership with our core values:
Our approach to risk is based on the fundamental belief that excellence in risk management needs:
Therefore, our strategy is built on the following 5 ‘steps’:
1. Promoting a culture of responsibility and risk awareness through:
2. Fully understanding the context within which we operate through:
3. Embedding arrangements for the control and governance of risk through:
4. Ensuring legal, statutory and regulatory compliance through:
5. Continually improving our approach to risk management through:
The effective delivery of Electricity North West’s risk management system (RMS) is a major contributor to achieving our vision of being ‘the leading energy delivery business’. The RMS is an effective and efficient way of managing the uncertainty that results from the multitude of factors that we face in pursuit of our business objectives.
It is an approach by which the company understands the level of exposure it is willing to take and considers risks across the business in a consistent way. In so doing, it contributes to optimising business performance, prompts continual improvement, helps reduce costs and improves visibility of exposures in the internal and external environments.
With a direct link to business objectives, the RMS includes the identification, assessment and management of current risks, controls that are currently in place to mitigate against these risks, and remedial actions to reduce risks to acceptable levels.
This approach brings consistency to the assessment, interpretation and evaluation of risk
This approach brings consistency to the assessment, interpretation and evaluation of risk. It aims to ensure that all reasonably foreseeable and material strategic, financial, operational and compliance risks are identified, in addition to safety, health and environmental hazards. The process adopted follows the main principles outlined in ISO 31000.
Key to supporting delivery of the RMS is the competence of those involved. Our risk management requires a multidisciplinary approach and in many respects, is an amalgamation of existing disciplines. It embraces competences in engineering, financial management, operations, business management and people development. It takes a holistic approach and focuses on ensuring that risk is managed in an optimised and sustainable manner to deliver business objectives.
A very general awareness of risk management is achieved for all employees through the Electricity North West induction process. Our approach to risk management competencies is based on five levels of competence to reflect the five broad areas of responsibilities within the way risk is managed within the company.
We believe that all employees can play their role in identifying and managing risk
A key principle of this approach is for each individual to not only understand their level of competence, but also the limits of their competency. We believe that all employees can play their role in identifying and managing risk. Those tasked with driving the improvements operate openly and professionally, seeking views of those involved in risk management. Periodic forums and workshops provide opportunities for seeking the active participation in managing risks and seeking improvements to the RMS.
We strive to continually improve our RMS, and continual improvement of the RMS, the management systems aligned to it and its application is fundamental to the RMS’s ability to deliver value to all the company’s stakeholders. The RMS continually evolves as we seek to embed performance monitoring through three levels of assurance.
The RMS continually evolves as we seek to embed performance monitoring through three levels of assurance
Each level has robust internal audit processes to ensure performance and processes are monitored and those deviations from required standards are recorded, reported and resolved. Observed weaknesses or actual failures are good indicators regarding the effectiveness or otherwise of existing risk control measures. Any complaints or failures are investigated, understood and actions taken to prevent reoccurrence where appropriate.
As an organisation we firmly believe that a comprehensive understanding of the risks we encounter, and how best to manage those risks, will positively contribute to our goal of being the leading energy delivery business.