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Session No. 730

Integrating a Balanced Scorecard Approach to Risk Management in an OHSAS 18000/ANSI Z-10 Management System
Paul Esposito, CIH, CSP, CPEA President STAR Consultants, Inc. Annapolis, Maryland

In 1999 and 2000, the British Standards Institution established the Occupational Health and Safety Assessment Series, (OHSAS) Guideline, based on a 19996 publication; BS8800, 1996, guide to occupational health and safety management systems. This guide was designed to be compatible with ISO 9001:2000 (Quality) and ISO 14001:1996 (environmental) management systems standards. Figure 1. Elements of successful OH&S management

While never adopted by ISO, in part due to opposition from the US, OHSAS 18000 has been widely used by companies throughout the world as aguide in developing safety management systems (SMS). In the US, OSHA published its guide safety management in 1989, as the Program Management Guidelines, which is also used as a template for OSHA’s Voluntary Protection Programs (VPP), California’s injury and illness prevention standard as well as other OSHA initiatives. In 2005, after years of consensus building, the American National StandardOrganization (ANSI) published its Z-10 standard, entitled Occupational Health and Safety Management Systems. ANSI Z10, while organized similar to ISO standards, better bridges the gap between the OHSAS guideline and the more comprehensive Program Management Guidelines of OSHA. Since 1982, OSHA’s Voluntary Protection Program (VPP) has been identifying both leading companies and defining both safetymanagement systems and culture. Thus, when faced with the task of Risk Assessment and Risk Management, elements of each are used to help define Risk Management. The balanced scorecard concept (see Figure 2) was created by Robert S. Kaplan of the Harvard Business School and David P. Norton of Nolan, Morton and Company in 1992. Initially a concept to assist public agencies in better managing andmeasuring performance, it has further developed and is widely used by many organizations as a more integrated system of performance measures. They show how to use measures in four categories – financial performance, customer knowledge, internal business processes and learning and growth – to align individual organizational and crossdepartmental initiatives to identify entirely new processes for meetingcustomer and shareholder objectives. The balanced scorecard process provides not only the ability to measure current performance, but helps target future performance as well. The process translates strategy into action, a balance of short term and long term objectives, lagging and leading indicators and internal and external perspectives. From a strategy perspective, the balanced scorecard enablesscorecard measures to be tied together in a series of cause and effect relationships, eventually impacting the financial performance.

Figure 2. Balanced Scorecard

As you can see from Figure 2 above, the Scorecard provides a framework to translate a strategy in to Operational Teams, supported by objectives, measures, targets and initiatives. This presentation is based on a real lifeimplementation of a risk assessment process within a Fortune 500 company, integrating elements of OHSAS 18000 and ANSI Z-10 to define and design Risk Management while providing verification of risk management and reduction in the form of complimentary leading and lagging metrics using the Balanced Scorecard concept.

What is Risk Assessment?
Within the OHSAS 18000 guidelines (see figure 3 below), riskassessment is defined as: Scope, nature and timing to ensure it is proactive rather than reactive; Identification of hazards Determination/evaluation of risks with existing (or proposed) control measures in place (taking into account exposure to specific hazards, the likelihood of failure of the control measures, and the potential consequences of injury or damage) Description of, or reference to,...
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