Enterprise risk

management
PART TWO

Group 1
Case study

bp: Integrated approach to risk management

bp is a global energy supplier that has experienced some catastrophic losses (Deepwater
Horizon) and is focused on continuing to manage its traditional customer base whilst
moving its business to a more sustainable footing and delivering renewable energy. They
carry out their risk management activities in three ways:
Day to day: Where ‘management and staff seek to identify and manage risk, promoting
safe, compliant and reliable operations.
Business and strategy: Where their ‘businesses integrate risk management into key
business processes such as strategy, planning, performance management, resource and
capital allocation, and project appraisal. They achieve this by ‘collating risk data,
assessing risk management activities, making further improvements and in connection
with planning new activities’.
Oversight and governance: Where ‘management, the leadership team, the board and
relevant committees provide oversight of how significant risks to BP are identified,
assessed and managed’.
Lincolnshire County Council: Strategic approach
to risk management
This English local authority provides services to its community as varied as education, social care,
roads and highways. Their communication is well set out and designed for use by all stakeholders,
including both employees and residents. They state that their approach includes:
‘Setting the “tone from the top” on the level of risk we are prepared to accept on our different
service delivery activities and priorities. [This] incorporates a new “opportunist” category,
acknowledging that how we “think about risk” will be different depending on the context of
corporate impact and sensitivity.’
‘Acknowledging that even with good risk management and our best endeavors – things can go
wrong. Where this happens we use the lessons learnt to try and prevent it from happening again.’
‘Developing leadership capacity and skills. Risk management should be integral to how we run
council business/services.’
 ‘Supporting a culture of well measured risk taking throughout the council’s business, including
strategic and operational.’
‘Ensuring our approach to risk management is proportionate to the decision being made.’