Five risk-management priorities to safeguard shareholder value in the mining industry

Sword GRC Blog

Five risk-management priorities to safeguard shareholder value in the mining industry

Mining is considered to be one of the world’s most inherently dangerous industries. The sheer complexity of its environments, the type of machinery operated, the associated systems, procedures, and methods in use across the sector all pose physical and financial hazards.  

Given that such a high potential for major incidents exists, risk management should be prioritized.  Jenny Ritson-Smith of Sword GRC outlines five ERM ‘essentials’ that can safeguard organizations across the board – from helping ensure the safety and wellbeing of the workforce, right through to preserving value for stakeholders.

1. A single source of truth

According to an Ernst & Young study* a fully integrated risk management system can contribute to up to three times the EBITDA.

Love them or hate them, we all know the power of spreadsheets to record, organize and communicate data.  But for providing C-level strategic oversight of the risk exposure of a multinational mining business, traditional methods just don’t cut it.

Islands of inaccessible data, inadequate monitoring, out-of-date in places and up-to-date in others, recorded in inconsistent formats, make it impossible to accurately consolidate spreadsheets across a business in order to report upon the total picture of risk exposure.

A fully integrated system provides ‘a single source of truth’, giving each role within the business a window into the precise risk information required and drawn from a single, central repository, ensuring the most up to date and accurate risk information available, recorded by standardized methods and consolidated into intuitive reports and dashboards.

2. Instant insight

A picture tells a thousand words

With such vast sets of risk data, a company’s risk management must live and die by the capacity of its ERM system to convert that data into meaningful business metrics and intuitive dashboards that impart instant insight to users.

If you want fast and efficient decision-making, give each risk user (from ops to board level) single screens made up of panels containing various critical pieces of information – interpretable at a glance in the form of traffic lights, meters, gauges, and colour-codes.  Give them flags for action and remediation.  Provide KPIs, problem-identification, negative trends, personalised per user and role, and make their focus business-driven.

3. Evaluate the upside

That which glitters is sometimes gold

High risks can go hand-in-hand with major gains.  Key to your risk management framework is its capacity to evaluate the opportunities that go alongside any given risk profile.  Active Risk Manager (ARM) provides mining organizations with the capacity to score risks on both qualitative and quantitative measures; identify the emerging risks and highlight risk connections. This is achieved through the collation of all opportunity data from employees on the frontline who are best placed to see the upside options. Critical information is made instantly available through dashboards and reports, providing an upside view of risk and the ability to identify opportunities throughout projects.

4. Mobile-enable your risk-management

If the mountain will not come to Mohammed, Mohammed must go to the mountain

Asking engineers, supervisors, and risk managers who assess risk out in the field, to return to their desks in order to translate risk exposure onto the computer later, is inefficient, slows the flow of information, invites error, and places unnecessary barriers in the way of risk recording.  Too many barriers and risks may go unreported altogether.

That’s why an in-the-field mobile risk-recording app should be a top priority for any mining business – one on which risks can be identified, recorded, and graded in a quick and easy manner, at the coal face, or in the boardroom, wherever they are identified.

5. Collaboration

A single view of risk for all 

As organizations abandon their offices and executives increasingly work within a virtual organization, more today than ever before, you need risk management systems and processes that foster collaboration and glue the whole risk team together.  A common understanding of the organization and its business purpose is important for risk culture. Messaging to all employees that managing risk is everybody’s responsibility should be constantly reinforced.

Whether risk culture comes first, and an ERM system underpins it, or whether the implementation of a new ERM is used as a business driver to engender a new focus upon enterprise risk management – and be it on-premise or in the cloud – it is essential that the new risk system is highly available, to users working from home, in the office, or out in the field, and that it fosters collaboration, improves communication, and pulls the team together.

Put risk at the top of the project agenda 

“Taking a scalable approach and armed with a single view of risk that starts from the ground up and runs across all aspects of the business, our mining customers can ensure that risk is top of the project agenda,” explains Keith Ricketts, Vice President of Marketing at Sword GRC. “Organizations can benefit from the valuable time and cost-saving opportunities, whilst identifying threats before they impact. Risk management has a vital role to play in protecting people, driving growth, and bolstering profitability in any high-risk industry.”

Active Risk Manager is the enterprise risk management solution used by numerous world-leading companies in risk-critical sectors including energy & mining.