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Case Studies of Successful Risk Management

Introduction, risk management.

Risk management involves identifying, assessing, and mitigating risks to minimize their impact on an organization. It aims to protect assets, ensure operational continuity, and support strategic goals. By proactively addressing potential threats, organizations can reduce the likelihood of adverse events and enhance their resilience.

Importance of Successful Risk Management

Successful risk management is crucial for any organization. It helps prevent financial losses, safeguard reputations, and ensure regulatory compliance. Effective risk management supports decision-making by providing insights into potential threats and opportunities. It enables organizations to respond swiftly to unexpected challenges, maintaining stability and operational efficiency.

Introducing Case Studies in Risk Management

Case studies are valuable tools for understanding successful risk management practices. They offer real-world examples of how organizations identify and address risks. By examining these cases, businesses can learn from others’ experiences and apply similar strategies. Case studies highlight practical applications of risk management theories and provide insights into effective risk mitigation techniques. In this session, we will explore case studies that demonstrate successful risk management in action. These examples will illustrate how organizations tackle various risks and implement strategies to ensure their continued success.

Case Study 1: Apple Inc.

Overview of apple’s successful risk management strategies.

Apple Inc. has implemented effective risk management strategies to navigate its complex global operations. The company faces various risks, including supply chain disruptions, cybersecurity threats, and regulatory compliance. Apple’s approach to risk management involves comprehensive planning and proactive measures. By addressing these risks, Apple maintains its market leadership and ensures operational stability.

Key Risks Identified by Apple

Apple identifies several key risks that could impact its business. Supply chain disruptions pose a significant risk, especially given Apple’s reliance on global suppliers. The company also faces cybersecurity threats, with potential risks to its data and customer information. Regulatory compliance is another critical area, as Apple operates in multiple jurisdictions with varying regulations. Market competition and technological changes add further complexity to its risk landscape.

How Apple Mitigated These Risks Effectively

Apple employs several strategies to mitigate these risks effectively. To address supply chain disruptions, Apple diversifies its supplier base and establishes strong relationships with key partners. The company also invests in supply chain visibility and flexibility, enabling it to adapt quickly to changes. For cybersecurity threats, Apple implements robust security measures, including encryption and multi-factor authentication. The company continuously monitors its systems for vulnerabilities and conducts regular security audits. This proactive approach helps protect sensitive data and maintain customer trust. In terms of regulatory compliance, Apple closely monitors regulatory changes in all operating regions. The company maintains a dedicated team to ensure compliance with local and international laws. This team also works on adjusting policies and practices to meet evolving regulatory requirements. Apple also invests heavily in research and development to stay ahead of technological changes and market competition. By innovating and adapting its product offerings, Apple reduces the risk of obsolescence and maintains its competitive edge. Apple’s risk management strategies effectively address key risks such as supply chain disruptions, cybersecurity threats, and regulatory compliance. Through diversification, robust security measures, regulatory vigilance, and continuous innovation, Apple manages to stay resilient in a dynamic global environment. These strategies help Apple maintain its market position and operational excellence, setting a benchmark for successful risk management practices.

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Case Study 2: Toyota

Examination of toyota’s risk management practices.

Toyota’s risk management practices have become a benchmark in the automotive industry. The company employs a comprehensive risk management framework to handle various risks. Toyota integrates risk assessment into its corporate strategy, focusing on both internal and external factors. The company uses a centralized risk management team to oversee global operations. This team identifies potential risks and develops mitigation strategies. Toyota also emphasizes continuous improvement and learning from past experiences. They use advanced technologies to monitor and manage risks effectively. By incorporating risk management into every aspect of their operations, Toyota ensures resilience and adaptability in a rapidly changing environment.

Major Risk Event Faced by Toyota

One major risk event Toyota faced was the 2010 vehicle recall crisis. The company recalled millions of vehicles due to safety issues with accelerator pedals and braking systems. This recall impacted Toyota’s reputation and financial performance significantly. The crisis emerged from reports of unintended acceleration, which raised concerns about vehicle safety. The widespread recall affected not only Toyota’s brand image but also its customer trust. The event highlighted the critical need for robust risk management practices in addressing safety issues. It posed significant challenges to Toyota’s operational and reputational stability.

Evaluation of Toyota’s Response and Recovery Strategies

Toyota’s response to the recall crisis was swift and comprehensive. The company initiated a large-scale recall to address the safety concerns promptly. They worked closely with regulatory agencies to ensure compliance and transparency. Toyota also implemented improved quality control measures to prevent future issues. The company increased its focus on customer communication and support during the crisis. They launched a public relations campaign to restore consumer trust and confidence. Additionally, Toyota invested in enhancing its risk assessment processes and crisis response strategies. These efforts helped the company recover its reputation and rebuild customer trust. Toyota’s proactive and transparent approach demonstrated their commitment to addressing and managing risks effectively. Their response and recovery strategies contributed to long-term resilience and stability in the face of significant challenges.

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Case Study 3: Amazon

Overview of amazon’s risk management framework.

Amazon employs a comprehensive risk assessment framework to navigate its vast and complex operations. This framework integrates risk identification, assessment, and mitigation strategies. Amazon’s approach involves a combination of proactive and reactive measures. The company uses data-driven insights to anticipate and address potential risks. Key components include robust cybersecurity measures, supply chain management , and compliance with regulations. Amazon’s risk assessment practices are designed to protect its global operations and maintain business continuity.

Case Study: Supply Chain Disruptions

A notable risk scenario faced by Amazon was the disruption of its supply chain during the COVID-19 pandemic. The pandemic caused significant challenges in logistics and inventory management. Amazon experienced delays in order fulfillment, increased shipping times, and shortages of essential products. To address these challenges, Amazon implemented several risk assessment strategies. First, the company increased its inventory levels to buffer against supply chain interruptions. Amazon also diversified its supplier base to reduce dependence on any single source. The company invested in advanced forecasting tools to better predict demand and manage stock levels. Additionally, Amazon expanded its logistics network, including increasing warehouse capacity and adding new delivery routes. These measures helped Amazon adapt to the rapidly changing conditions and mitigate the impact of the disruption.

Analyzing the Impact of Effective Risk Management on Amazon’s Success

Effective risk assessment played a crucial role in Amazon’s ability to handle the supply chain disruption. By swiftly implementing risk mitigation strategies, Amazon maintained customer trust and satisfaction. The company’s proactive approach to increasing inventory and diversifying suppliers minimized the negative effects on its operations. The expansion of its logistics network allowed Amazon to continue fulfilling orders despite significant challenges. This resilience contributed to maintaining its market position and customer loyalty. The ability to adapt quickly and efficiently in the face of disruptions showcased Amazon’s robust risk management capabilities. Overall, Amazon’s successful management of the supply chain crisis highlighted the importance of a well-structured risk assessment framework. The company’s actions ensured continuity in its operations and reinforced its reputation as a reliable retailer. Effective risk assessment not only helped Amazon navigate the immediate challenges but also positioned it for long-term success. Amazon’s risk assessment framework is comprehensive, incorporating proactive and reactive measures to address various risks. The case study of supply chain disruptions during the COVID-19 pandemic illustrates the company’s ability to handle significant challenges effectively. By implementing strategic risk assessment practices, Amazon maintained its operational efficiency and customer trust. The success of these initiatives underscores the value of a robust risk management framework in achieving long-term business success.

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Key Factors in Successful Risk Management

Common elements in successful risk management case studies.

Successful risk assessment case studies reveal several common elements. Each case highlights the importance of a structured risk management framework. Key elements include thorough risk identification, comprehensive risk assessment, and effective mitigation strategies. Organizations that succeed in managing risks typically use these practices to address potential issues before they escalate. One common element is the establishment of clear risk management policies. These policies guide decision-making and ensure that risk management is integrated into all aspects of the organization. Effective communication of these policies to all employees is also crucial for successful risk management. Another element is the use of advanced risk management tools and techniques. Successful organizations often employ sophisticated software and methodologies to assess and manage risks. They continuously monitor risks and adjust their strategies based on new information and changing conditions.

Role of Leadership in Risk Management

Leadership plays a pivotal role in successful risk management. Leaders set the tone for how risk assessment is approached within an organization. They must champion risk management initiatives and ensure that resources are allocated appropriately. Effective leaders actively promote a culture of risk awareness. They encourage open communication about risks and foster an environment where employees feel comfortable reporting potential issues. Leaders also play a critical role in making informed decisions based on risk assessments and mitigation strategies. Leadership is essential for driving the implementation of risk assessment strategies. Leaders must ensure that risk assessment practices are not only planned but also executed effectively. Their involvement in overseeing and reviewing risk assessment processes helps maintain accountability and ensures that the strategies are achieving their intended outcomes.

Importance of Proactive Risk Assessment and Planning

Proactive risk assessment and planning are vital components of successful risk management. Identifying potential risks before they occur allows organizations to prepare and implement mitigation strategies in advance. This proactive approach minimizes the impact of risks and enhances overall resilience. Effective risk management involves regularly updating risk assessments and planning based on new information and emerging threats. Organizations that anticipate risks and develop contingency plans are better equipped to handle unexpected challenges. Proactive planning helps in adapting strategies quickly and effectively when risks materialize. Additionally, proactive risk assessment encourages continuous improvement. Organizations that regularly review and refine their risk assessment processes can better address future risks. This iterative approach ensures that risk assessment strategies remain relevant and effective over time. In short, successful risk assessment case studies share common elements such as structured frameworks and advanced tools. Leadership is crucial in promoting a culture of risk awareness and ensuring effective execution of strategies. Proactive risk assessment and planning are essential for minimizing risk impact and enhancing organizational resilience.

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Challenges in Risk Management

Potential obstacles to effective risk management.

Effective risk management can face several obstacles that organizations must address to ensure success. One significant obstacle is a lack of data. Incomplete or inaccurate data can hinder the ability to identify and assess risks accurately. Organizations must invest in robust data collection and analysis systems to overcome this challenge. Another obstacle is resistance to change. Employees and stakeholders may be resistant to new risk management processes or tools. To address this, organizations should focus on clear communication and training to build acceptance and understanding. Limited resources can also impede effective risk management. Budget constraints or a shortage of skilled personnel can affect the implementation of comprehensive risk management strategies. Organizations should prioritize risk management within their budgets and seek external expertise when necessary.

The Dynamic Nature of Risks

Today’s business environment presents a dynamic landscape of risks. Rapid technological advancements, changing regulations, and global economic fluctuations continually introduce new risks. This dynamic nature means that risk management strategies must be agile and adaptable. For example, the rise of cyber threats has introduced new challenges in managing data security risks. Organizations must continuously update their cybersecurity measures to address evolving threats. Similarly, global trade uncertainties can impact supply chain risks, requiring businesses to adjust their strategies frequently. The rapid pace of change in the business environment means that risk assessment cannot be static. Organizations must regularly review and update their risk assessment strategies to keep pace with new and emerging risks.

Strategies for Overcoming Challenges in Risk Management

To overcome the challenges in risk assessment, organizations can adopt several effective strategies. First, investing in advanced riskassessment technologies can enhance data accuracy and analysis capabilities. Tools like predictive analytics and artificial intelligence can help identify and assess risks more effectively. Second, fostering a culture of risk awareness is crucial. Encouraging open communication about risks and involving employees in risk assessment processes can reduce resistance to change. Regular training and awareness programs can help employees understand and embrace risk management practices. Third, building flexibility into risk assessment strategies allows organizations to adapt to changing conditions. Implementing a dynamic risk assessment framework enables businesses to respond quickly to new risks and adjust strategies as needed. This flexibility is essential for managing risks in today’s fast-paced environment. Finally, leveraging external expertise can address resource limitations. Engaging consultants or partnering with risk assessment firms can provide additional support and insights. These external resources can help organizations implement best practices and overcome internal constraints. Addressing obstacles to effective risk assessment requires a proactive approach. Understanding the dynamic nature of risks and implementing strategies to overcome challenges can enhance an organization’s risk assessment capabilities. By investing in technology, fostering a risk-aware culture, and maintaining flexibility, businesses can navigate the complexities of today’s risk environment successfully.

Best Practices in Risk Management

Industry best practices in risk management.

Effective risk assessment relies on adopting industry best practices to address potential threats. Organizations across various sectors use proven strategies to successfully manage risks. Implementing comprehensive risk assessment processes and establishing clear risk policies are fundamental practices. Regular training and communication ensure employees understand their roles in risk assessment. Additionally, developing and continuously reviewing robust contingency plans prepares organizations for unforeseen challenges. Sharing these practices across industries enhances overall risk assessment standards and offers valuable insights for improvement.

The Role of Technology in Enhancing Risk Management

Technology significantly enhances risk assessment capabilities by providing real-time data and analytical insights. Advanced tools such as artificial intelligence, machine learning, and data analytics help identify patterns and predict potential risks. Predictive analytics, for example, forecasts future risks based on historical data and current trends, enabling proactive risk mitigation. Risk assessment software integrates various data sources, offering a comprehensive view of risk exposure and facilitating informed decision-making. Cybersecurity tools also play a crucial role by monitoring networks, detecting vulnerabilities, and responding to potential breaches, ensuring data security and integrity. Automation tools streamline risk assessment processes, reducing manual errors and increasing efficiency.

Successful Risk Management Techniques Used by Top Organizations

Successful risk assessment techniques from leading organizations illustrate the effectiveness of various strategies. General Electric (GE) employs a risk assessment framework that integrates advanced analytics and real-time data monitoring. This approach allows GE to use predictive analytics for assessing operational risks and implementing preventive measures, effectively managing risks across its global operations. JPMorgan Chase utilizes comprehensive risk management practices, including advanced technology for monitoring financial risks. The bank’s use of machine learning algorithms to analyze transaction data helps detect fraudulent activities and prevent financial losses. Procter & Gamble (P&G) implements a multi-layered risk assessment strategy, including regular risk assessments and contingency planning. The company leverages data-driven insights to anticipate supply chain disruptions and develop response plans, maintaining operational stability. Amazon uses technology to enhance its logistics and supply chain management. Real-time tracking systems and predictive analytics optimize inventory management, reducing operational risks and ensuring smooth operations. Adopting industry best practices, leveraging technology, and learning from successful case studies strengthen risk management strategies. These approaches enhance the ability to manage risks effectively and ensure operational resilience. By embracing proven techniques and advanced tools, organizations can navigate uncertainties and achieve long-term success.

The Importance of Successful Risk Management

Successful risk management is crucial for organizational stability and growth. It helps identify potential threats and mitigate their impact. Effective risk management protects a company’s reputation and financial health. It enables organizations to respond proactively to emerging risks. By managing risks well, companies can ensure resilience and long-term success.

Key Takeaways from the Case Studies

Case studies of successful risk management highlight several key points. Toyota’s handling of the 2010 recall crisis demonstrates the value of a swift, transparent response. The company’s proactive measures and improved quality controls showcase the importance of learning from past issues. Another case study might illustrate how effective risk management strategies can prevent operational disruptions and protect brand reputation. These examples underline the need for comprehensive risk assessment and robust response plans.

Encouraging Organizations to Prioritize Risk Management

Organizations should prioritize risk assessment to achieve long-term success. Developing a strong risk management framework helps in anticipating and addressing potential threats. Investing in risk assessment tools and processes safeguards against unexpected challenges. Effective risk assessment not only protects assets but also enhances operational efficiency.

Global Opportunities for Risk Managers

Future of Risk Management in Finance

Common Misconceptions About Risk Management

Differences Between Financial and Business Risk Managers

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Table of Contents

Understanding project risk management, definition and explanation of project risk management, 4 key components of project risk management, risk identification, risk assessment, risk response planning, risk monitoring and control, 5 project risk management case studies, gordie howe international bridge project, fujitsu’s early-career project managers, vodafone’s complex technology project, fehmarnbelt project, lend lease project, project risk management at designveloper, how we manage project risks, advancements in project risk management, project risk management: 5 case studies you should not miss.

May 21, 2024

Exploring project risk management, one can see how vital it is in today’s business world. This article from Designveloper, “Project Risk Management: 5 Case Studies You Should Not Miss”, exists in order to shed light on this important component of project management.

We’ll reference some new numbers and facts that highlight the significance of risk management in projects. These data points are based on legit reports and will help create a good basis of understanding on the subject matter.

In addition, we will discuss specific case studies when risk management was successfully applied and when it was not applied in project management. These real world examples are very much important for project managers and teams.

It is also important to keep in mind that each project has associated risks. However through project risk management these risks can be identified, analyzed, prioritized and managed in order to make the project achieve its objectives. Well then, let’s take this journey of understanding together. Watch out for an analysis of the five case studies you must not miss.

Risk management is a very critical component of any project. Risk management is a set of tools that allow determining the potential threats to the success of a project and how to address them. Let’s look at some more recent stats and examples to understand this better.

Statistics show that as high as 70% of all projects are unsuccessful . This high failure rate highlights the need for efficient project risk management. Surprisingly, organizations that do not attach much importance to project risk management face 50% chances of their project failure. This results in huge losses of money and untapped business potential.

Additionally, poor performance leads to approximated 10% loss of every dollar spent on projects. This translates to a loss of $99 for every $1 billion invested. These statistics demonstrate the importance of project risk management in improving project success rates and minimizing waste.

Let us consider a project management example to demonstrate the relevance of the issue discussed above. Consider a new refinery being constructed in the Middle East. The project is entering a key phase: purchasing. Poor risk management could see important decisions surrounding procurement strategy, or the timing of the tendering process result in project failure.

Project risk management in itself is a process that entails the identification of potential threats and their mitigation. It is not reactionary but proactive.

This process begins with the identification of potential risks. These could be any time from budget overruns to delayed deliveries. After the risks are identified they are then analyzed. This involves estimating the probability of each risk event and the potential consequences to the project.

The next stage is risk response planning. This could be in the form of risk reduction, risk shifting or risk acceptance. The goal here is to reduce the impact of risks on the project.

Finally, the process entails identifying and tracking these risks throughout the life of a project. This helps in keeping the project on course and any new risks that might arise are identified and managed.

Let’s dive into the heart of project risk management: its four key components. These pillars form the foundation of any successful risk management strategy. They are risk identification, risk analysis, risk response planning, and risk monitoring and control. Each plays a crucial role in ensuring project success. This section will provide a detailed explanation of each component, backed by data and real-world examples. So, let’s embark on this journey to understand the four key components of project risk management.

Risk identification is the first process in a project risk management process. It’s about proactively identifying risks that might cause a project to fail. This is very important because a recent study has shown that 77% of companies had operational surprises due to unidentified risks.

There are different approaches to risk identification such as brainstorming, Delphi technique, SWOT analysis, checklist analysis, flowchart. These techniques assist project teams in identifying all potential risks.

Risk identification is the second stage of the project risk management process. It is a systematic approach that tries to determine the probability of occurrence and severity of identified risks. This step is very important; it helps to rank the identified risks and assists in the formation of risk response strategies.

Risk assessment involves two key elements: frequency and severity of occurrence. As for risk probability, it estimates the chances of a risk event taking place, and risk impact measures the impact associated with the risk event.

This is the third component of project risk management. It deals with planning the best ways to deal with the risks that have been identified. This step is important since it ensures that the risk does not have a substantial effect on the project.

One of the statistics stated that nearly three-quarters of organizations have an incident response plan and 63 percent of these organizations conduct the plan regularly. This explains why focusing only on risks’ identification and analysis without a plan of action is inadequate.

Risk response planning involves four key strategies: risk acceptance, risk sharing, risk reduction, and risk elimination. Each strategy is selected depending on the nature and potential of the risk.

Risk monitoring and control is the last step of project risk management. It’s about monitoring and controlling the identified risks and making sure that they are being addressed according to the plan.

Furthermore, risk control and management involve managing identified risks, monitoring the remaining risk, identifying new risks, implementing risk strategies, and evaluating their implementation during the project life cycle.

It is now high time to approach the practical side of project risk management. This section provides selected five case studies that explain the need and application of project risk management. Each case study gives an individual approach revealing how risk management can facilitate success of the project. Additionally, these case studies include construction projects, technology groups, among other industries. They show how effective project risk management can be, by allowing organizations to respond to uncertainties and successfully accomplish their project objectives. Let us now examine these case studies and understand the concept of risk in project management.

The Gordie Howe International Bridge is one of the projects that demonstrate the principles of project risk management. This is one of the biggest infrastructure projects in North America which includes the construction of a 6 lane bridge at the busiest commercial border crossing point between the U.S. and Canada.

The project scope can be summarized as: New Port of Entry and Inspection facilities for the Canadian and US governments; Tolls Collection Facilities; Projects and modifications to multiple local bridges and roadways. The project is administered via Windsor-Detroit Bridge Authority, a nonprofit Canadian Crown entity.

Specifically, one of the project challenges associated with the fact that the project was a big one in terms of land size and the community of interests involved in the undertaking. Governance and the CI were fundamental aspects that helped the project team to overcome these challenges.

The PMBOK® Guide is the contractual basis for project management of the project agreement. This dedication to following the best practices for project management does not end with bridge construction: It spreads to all other requirements.

However, the project is making steady progress to the objective of finishing the project in 2024. This case study clearly demonstrates the role of project risk management in achieving success with large and complicated infrastructure projects.

Fujitsu is an international company that deals with the provision of a total information and communication technology system as well as its products and services. The typical way was to employ a few college and school leavers and engage them in a two-year manual management training and development course. Nevertheless, this approach failed in terms of the following.

Firstly, the training was not comprehensive in its coverage of project management and was solely concerned with generic messaging – for example, promoting leadership skills and time management. Secondly it was not effectively reaching out to the need of apprentices. Thirdly the two year time frame was not sufficient to allow for a deep approach to the development of the required project management skills for this job. Finally the retention problems of employees in the train program presented a number of issues.

To tackle these issues, Fujitsu UK adopted a framework based on three dimensions: structured learning, learning from others, and rotation. This framework is designed to operate for the first five years of a participant’s career and is underpinned by the 70-20-10 model for learning and development. Rogers’ model acknowledges that most learning occurs on the job.

The initial training process starts with a three-week formal learning and induction program that includes the initial orientation to the organization and its operations, the fundamentals of project management, and business in general. Lastly, the participants are put on a rotational assignment in the PMO of the program for the first six to eight months.

Vodafone is a multinational mobile telecommunications group that manages telecommunications services in 28 countries across five continents and decided to undertake a highly complex technology project to replace an existing network with a fully managed GLAN in 42 locations. This project was much complex and thus a well grounded approach to risk management was needed.

The project team faced a long period of delay in signing the contract and frequent changes after the contract was signed until the project is baselined. These challenges stretched the time frame of the project and enhanced the project complexity.

In order to mitigate the risks, Vodafone employed PMI standards for their project management structure. This approach included conducting workshops, developing resource and risk management plan and tailoring project documentations as well as conducting regular lesson learned.

Like any other project, the Vodafone GLAN project was not an easy one either but it was completed on time and in some cases ahead of the schedule that the team had anticipated to complete the project. At the first stage 90% of migrated sites were successfully migrated at the first attempt and 100% – at second.

The Fehmarnbelt project is a real-life example of the strategic role of project risk management. It provides information about a mega-project to construct the world’s longest immersed tunnel between Germany and Denmark. It will be a four-lane highway and two-rail electrified tunnel extending for 18 kilometers and it will be buried 40 meters under the Baltic Sea.

This project is managed by Femern A/S which is a Danish government-owned company with construction value over more than €7 billion (£8. 2 billion). It is estimated to provide jobs for 3,000 workers directly in addition to 10,000 in the suppliers. Upon its completion, its travel between Denmark and Germany will be cut to 10 minutes by automobile and 7 minutes by rail.

The Femern risk management functions and controls in particular the role of Risk Manager Bo Nygaard Sørensen then initiated the process and developed some clear key strategic objectives for the project. They formulated a simple, dynamic, and comprehensive risk register to give a more complete risk view of the mega-project. They also created a risk index in order to assess all risks in a consistent and predictable manner, classify them according to their importance, and manage and overcome the risks in an appropriate and timely manner.

Predict! is a risk assessment and analysis tool that came in use by the team, which helps determine the effect of various risks on the cost of the construction of the link and to calculate the risk contingency needed for the project. This way they were able to make decisions on whether an immersed tunnel could be constructed instead of a bridge.

Lend Lease is an international property and infrastructure group that operates in over 20 countries in the world; the company offers a better example of managing project risks. The company has established a complex framework called the Global Minimum Requirements (GMRs) to identify risks to which it is exposed.

The GMRs have scope for the phase of the project before a decision to bid for a job is taken. This framework includes factors related to flooding, heat, biodiversity, land or soil subsidence, water, weathering, infrastructure and insurance.

The GMRs are organized into five main phases in line with the five main development stages of a project. These stages guarantee that vital decisions are made at the ideal time. The stages include governance, investment, design and procurement, establishment, and delivery.

For instance, during the design and procurement stage, the GMRs identify requisite design controls that will prevent environment degradation during design as well as fatal risk elimination during planning and procurement. This approach aids in effective management of risks and delivery of successful projects in Lend Lease.

Let’s take a closer look at what risk management strategies are used here at Designveloper – a top web & software development firm in Vietnam. We also provide a range of other services, so it is essential that we manage risks on all our projects in similar and effective ways. The following part of the paper will try to give a glimpse of how we manage project risk in an exemplary manner using research from recent years and include specific cases.

The following steps explain the risk management process that we use—from the identification of potential risks to managing them: Discovering the risks. We will also mention here how our experience and expertise has helped us in this area.

Risk management as a function in project delivery is well comprehended at Designveloper. Our method of managing the project risk is proactive and systematic, which enables us to predict possible problems and create successful solutions to overcome them.

One of the problems we frequently encounter is the comprehension of our clients’ needs. In most cases, clients come to us with a basic idea or concept. To convert these ideas into particular requirements and feature lists, the business analysts of our company have to collaborate with the client. The whole process is often a time-waster, and having a chance is missed.

To solve this problem, we’ve created a library of features with their own time and cost estimate. This library is based on data of previous projects that we have documented, arranged, and consolidated. At the present time when a client approaches us with a request, we can search for similar features in our library and give an initial quote. This method has considerably cut the period of providing the first estimations to our clients and saving the time for all participants.

This is only one of the techniques we use to mitigate project risks at Designveloper. The focus on effective project risk management has been contributing significantly to our successful operation as a leading company in web and software development in Vietnam. It is a mindset that enables us to convert challenges into opportunities and provide outstanding results for our clients.

In Designveloper, we always aim at enhancing our project risk management actions. Below are a couple examples of the advancements we’ve made.

To reduce the waiting time, we have adopted continuous deployment. This enables us to provide value fast and effectively. We release a minimum feature rather than a big feature. It helps us to collect the input from our customers and keep on improving. What this translates into for our customers is that they start to derive value from the product quickly and that they have near-continuous improvement rather than have to wait for a “perfect” feature.

We also hold regular “sync-up” meetings between teams to keep the information synchronized and transparent from input (requirements) to output (product). Changes are known to all teams and thus teams can prepare to respond in a flexible and best manner.

Some of these developments in project risk management have enabled us to complete projects successfully, and be of an excellent service to our clients. They show our support of the never-ending improving and our capability to turn threats into opportunities. The strength of Designveloper is largely attributed to the fact that we do not just control project risks – we master them.

To conclude, project risk management is an important element of nearly all successful projects. It is all about identification of possible problems and organization necessary measures that will result in the success of the project. The case studies addressed in this article illustrate the significance and implementation of project risk management in different settings and fields. They show what efficient risk management can result in.

We have witnessed the advantages of solid project risk management at Designveloper. The combination of our approach, powered by our track record and professionalism, has enabled us to complete projects that met all client’s requirements. We are not only managing project risks but rather mastering them.

We trust you have found this article helpful in understanding project risk management and its significance in the fast-changing, complicated project environment of today. However, one needs to mind that proper project management is not only about task and resource management but also risk management. And at Designveloper, our team is there to guide you through those risks and to help you realize your project’s objectives.

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Enterprise Risk Management Case Studies: Heroes and Zeros

By Andy Marker | April 7, 2021

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We’ve compiled more than 20 case studies of enterprise risk management programs that illustrate how companies can prevent significant losses yet take risks with more confidence.   

Included on this page, you’ll find case studies and examples by industry , case studies of major risk scenarios (and company responses), and examples of ERM successes and failures .

Enterprise Risk Management Examples and Case Studies

With enterprise risk management (ERM) , companies assess potential risks that could derail strategic objectives and implement measures to minimize or avoid those risks. You can analyze examples (or case studies) of enterprise risk management to better understand the concept and how to properly execute it.

The collection of examples and case studies on this page illustrates common risk management scenarios by industry, principle, and degree of success. For a basic overview of enterprise risk management, including major types of risks, how to develop policies, and how to identify key risk indicators (KRIs), read “ Enterprise Risk Management 101: Programs, Frameworks, and Advice from Experts .”

Enterprise Risk Management Framework Examples

An enterprise risk management framework is a system by which you assess and mitigate potential risks. The framework varies by industry, but most include roles and responsibilities, a methodology for risk identification, a risk appetite statement, risk prioritization, mitigation strategies, and monitoring and reporting.

To learn more about enterprise risk management and find examples of different frameworks, read our “ Ultimate Guide to Enterprise Risk Management .”

Enterprise Risk Management Examples and Case Studies by Industry

Though every firm faces unique risks, those in the same industry often share similar risks. By understanding industry-wide common risks, you can create and implement response plans that offer your firm a competitive advantage.

Enterprise Risk Management Example in Banking

Toronto-headquartered TD Bank organizes its risk management around two pillars: a risk management framework and risk appetite statement. The enterprise risk framework defines the risks the bank faces and lays out risk management practices to identify, assess, and control risk. The risk appetite statement outlines the bank’s willingness to take on risk to achieve its growth objectives. Both pillars are overseen by the risk committee of the company’s board of directors.  

Risk management frameworks were an important part of the International Organization for Standardization’s 31000 standard when it was first written in 2009 and have been updated since then. The standards provide universal guidelines for risk management programs.  

Risk management frameworks also resulted from the efforts of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The group was formed to fight corporate fraud and included risk management as a dimension. 

Once TD completes the ERM framework, the bank moves onto the risk appetite statement. 

The bank, which built a large U.S. presence through major acquisitions, determined that it will only take on risks that meet the following three criteria:

• The risk fits the company’s strategy, and TD can understand and manage those risks. 
• The risk does not render the bank vulnerable to significant loss from a single risk.
• The risk does not expose the company to potential harm to its brand and reputation. 

Some of the major risks the bank faces include strategic risk, credit risk, market risk, liquidity risk, operational risk, insurance risk, capital adequacy risk, regulator risk, and reputation risk. Managers detail these categories in a risk inventory. 

The risk framework and appetite statement, which are tracked on a dashboard against metrics such as capital adequacy and credit risk, are reviewed annually. 

TD uses a three lines of defense (3LOD) strategy, an approach widely favored by ERM experts, to guard against risk. The three lines are as follows:

• A business unit and corporate policies that create controls, as well as manage and monitor risk
• Standards and governance that provide oversight and review of risks and compliance with the risk appetite and framework 
• Internal audits that provide independent checks and verification that risk-management procedures are effective

Enterprise Risk Management Example in Pharmaceuticals

Drug companies’ risks include threats around product quality and safety, regulatory action, and consumer trust. To avoid these risks, ERM experts emphasize the importance of making sure that strategic goals do not conflict. 

For Britain’s GlaxoSmithKline, such a conflict led to a breakdown in risk management, among other issues. In the early 2000s, the company was striving to increase sales and profitability while also ensuring safe and effective medicines. One risk the company faced was a failure to meet current good manufacturing practices (CGMP) at its plant in Cidra, Puerto Rico. 

CGMP includes implementing oversight and controls of manufacturing, as well as managing the risk and confirming the safety of raw materials and finished drug products. Noncompliance with CGMP can result in escalating consequences, ranging from warnings to recalls to criminal prosecution. 

GSK’s unit pleaded guilty and paid $750 million in 2010 to resolve U.S. charges related to drugs made at the Cidra plant, which the company later closed. A fired GSK quality manager alerted regulators and filed a whistleblower lawsuit in 2004. In announcing the consent decree, the U.S. Department of Justice said the plant had a history of bacterial contamination and multiple drugs created there in the early 2000s violated safety standards.

According to the whistleblower, GSK’s ERM process failed in several respects to act on signs of non-compliance with CGMP. The company received warning letters from the U.S. Food and Drug Administration in 2001 about the plant’s practices, but did not resolve the issues. 

Additionally, the company didn’t act on the quality manager’s compliance report, which advised GSK to close the plant for two weeks to fix the problems and notify the FDA. According to court filings, plant staff merely skimmed rejected products and sold them on the black market. They also scraped by hand the inside of an antibiotic tank to get more product and, in so doing, introduced bacteria into the product.

Enterprise Risk Management Example in Consumer Packaged Goods

Mars Inc., an international candy and food company, developed an ERM process. The company piloted and deployed the initiative through workshops with geographic, product, and functional teams from 2003 to 2012. 

Driven by a desire to frame risk as an opportunity and to work within the company’s decentralized structure, Mars created a process that asked participants to identify potential risks and vote on which had the highest probability. The teams listed risk mitigation steps, then ranked and color-coded them according to probability of success. 

Larry Warner, a Mars risk officer at the time, illustrated this process in a case study . An initiative to increase direct-to-consumer shipments by 12 percent was colored green, indicating a 75 percent or greater probability of achievement. The initiative to bring a new plant online by the end of Q3 was coded red, meaning less than a 50 percent probability of success. 

The company’s results were hurt by a surprise at an operating unit that resulted from a so-coded red risk identified in a unit workshop. Executives had agreed that some red risk profile was to be expected, but they decided that when a unit encountered a red issue, it must be communicated upward when first identified. This became a rule. 

This process led to the creation of an ERM dashboard that listed initiatives in priority order, with the profile of each risk faced in the quarter, the risk profile trend, and a comment column for a year-end view. 

According to Warner, the key factors of success for ERM at Mars are as follows:

• The initiative focused on achieving operational and strategic objectives rather than compliance, which refers to adhering to established rules and regulations.
• The program evolved, often based on requests from business units, and incorporated continuous improvement. 
• The ERM team did not overpromise. It set realistic objectives.
• The ERM team periodically surveyed business units, management teams, and board advisers.

Enterprise Risk Management Example in Retail

Walmart is the world’s biggest retailer. As such, the company understands that its risk makeup is complex, given the geographic spread of its operations and its large number of stores, vast supply chain, and high profile as an employer and buyer of goods. 

In the 1990s, the company sought a simplified strategy for assessing risk and created an enterprise risk management plan with five steps founded on these four questions:

• What are the risks?
• What are we going to do about them?
• How will we know if we are raising or decreasing risk?
• How will we show shareholder value?

The process follows these five steps:

• Risk Identification: Senior Walmart leaders meet in workshops to identify risks, which are then plotted on a graph of probability vs. impact. Doing so helps to prioritize the biggest risks. The executives then look at seven risk categories (both internal and external): legal/regulatory, political, business environment, strategic, operational, financial, and integrity. Many ERM pros use risk registers to evaluate and determine the priority of risks. You can download templates that help correlate risk probability and potential impact in “ Free Risk Register Templates .”
• Risk Mitigation: Teams that include operational staff in the relevant area meet. They use existing inventory procedures to address the risks and determine if the procedures are effective.
• Action Planning: A project team identifies and implements next steps over the several months to follow.
• Performance Metrics: The group develops metrics to measure the impact of the changes. They also look at trends of actual performance compared to goal over time.
• Return on Investment and Shareholder Value: In this step, the group assesses the changes’ impact on sales and expenses to determine if the moves improved shareholder value and ROI.

To develop your own risk management planning, you can download a customizable template in “ Risk Management Plan Templates .”

Enterprise Risk Management Example in Agriculture

United Grain Growers (UGG), a Canadian grain distributor that now is part of Glencore Ltd., was hailed as an ERM innovator and became the subject of business school case studies for its enterprise risk management program. This initiative addressed the risks associated with weather for its business. Crop volume drove UGG’s revenue and profits. 

In the late 1990s, UGG identified its major unaddressed risks. Using almost a century of data, risk analysts found that extreme weather events occurred 10 times as frequently as previously believed. The company worked with its insurance broker and the Swiss Re Group on a solution that added grain-volume risk (resulting from weather fluctuations) to its other insured risks, such as property and liability, in an integrated program. 

The result was insurance that protected grain-handling earnings, which comprised half of UGG’s gross profits. The greater financial stability significantly enhanced the firm’s ability to achieve its strategic objectives. 

Since then, the number and types of instruments to manage weather-related risks has multiplied rapidly. For example, over-the-counter derivatives, such as futures and options, began trading in 1997. The Chicago Mercantile Exchange now offers weather futures contracts on 12 U.S. and international cities. 

Weather derivatives are linked to climate factors such as rainfall or temperature, and they hedge different kinds of risks than do insurance. These risks are much more common (e.g., a cooler-than-normal summer) than the earthquakes and floods that insurance typically covers. And the holders of derivatives do not have to incur any damage to collect on them.

These weather-linked instruments have found a wider audience than anticipated, including retailers that worry about freak storms decimating Christmas sales, amusement park operators fearing rainy summers will keep crowds away, and energy companies needing to hedge demand for heating and cooling.

This area of ERM continues to evolve because weather and crop insurance are not enough to address all the risks that agriculture faces. Arbol, Inc. estimates that more than $1 trillion of agricultural risk is uninsured. As such, it is launching a blockchain-based platform that offers contracts (customized by location and risk parameters) with payouts based on weather data. These contracts can cover risks associated with niche crops and small growing areas.

Enterprise Risk Management Example in Insurance

Switzerland’s Zurich Insurance Group understands that risk is inherent for insurers and seeks to practice disciplined risk-taking, within a predetermined risk tolerance. 

The global insurer’s enterprise risk management framework aims to protect capital, liquidity, earnings, and reputation. Governance serves as the basis for risk management, and the framework lays out responsibilities for taking, managing, monitoring, and reporting risks. 

The company uses a proprietary process called Total Risk Profiling (TRP) to monitor internal and external risks to its strategy and financial plan. TRP assesses risk on the basis of severity and probability, and helps define and implement mitigating moves. 

Zurich’s risk appetite sets parameters for its tolerance within the goal of maintaining enough capital to achieve an AA rating from rating agencies. For this, the company uses its own Zurich economic capital model, referred to as Z-ECM. The model quantifies risk tolerance with a metric that assesses risk profile vs. risk tolerance. 

To maintain the AA rating, the company aims to hold capital between 100 and 120 percent of capital at risk. Above 140 percent is considered overcapitalized (therefore at risk of throttling growth), and under 90 percent is below risk tolerance (meaning the risk is too high). On either side of 100 to 120 percent (90 to 100 percent and 120 to 140 percent), the insurer considers taking mitigating action. 

Zurich’s assessment of risk and the nature of those risks play a major role in determining how much capital regulators require the business to hold. A popular tool to assess risk is the risk matrix, and you can find a variety of templates in “ Free, Customizable Risk Matrix Templates .”

In 2020, Zurich found that its biggest exposures were market risk, such as falling asset valuations and interest-rate risk; insurance risk, such as big payouts for covered customer losses, which it hedges through diversification and reinsurance; credit risk in assets it holds and receivables; and operational risks, such as internal process failures and external fraud.

Enterprise Risk Management Example in Technology

Financial software maker Intuit has strengthened its enterprise risk management through evolution, according to a case study by former Chief Risk Officer Janet Nasburg. 

The program is founded on the following five core principles:

• Use a common risk framework across the enterprise.
• Assess risks on an ongoing basis.
• Focus on the most important risks.
• Clearly define accountability for risk management.
• Commit to continuous improvement of performance measurement and monitoring. 

ERM programs grow according to a maturity model, and as capability rises, the shareholder value from risk management becomes more visible and important. 

The maturity phases include the following:

• Ad hoc risk management addresses a specific problem when it arises.
• Targeted or initial risk management approaches risks with multiple understandings of what constitutes risk and management occurs in silos. 
• Integrated or repeatable risk management puts in place an organization-wide framework for risk assessment and response. 
• Intelligent or managed risk management coordinates risk management across the business, using common tools. 
• Risk leadership incorporates risk management into strategic decision-making. 

Intuit emphasizes using key risk indicators (KRIs) to understand risks, along with key performance indicators (KPIs) to gauge the effectiveness of risk management. 

Early in its ERM journey, Intuit measured performance on risk management process participation and risk assessment impact. For participation, the targeted rate was 80 percent of executive management and business-line leaders. This helped benchmark risk awareness and current risk management, at a time when ERM at the company was not mature.

Conduct an annual risk assessment at corporate and business-line levels to plot risks, so the most likely and most impactful risks are graphed in the upper-right quadrant. Doing so focuses attention on these risks and helps business leaders understand the risk’s impact on performance toward strategic objectives. 

In the company’s second phase of ERM, Intuit turned its attention to building risk management capacity and sought to ensure that risk management activities addressed the most important risks. The company evaluated performance using color-coded status symbols (red, yellow, green) to indicate risk trend and progress on risk mitigation measures.

In its third phase, Intuit moved to actively monitoring the most important risks and ensuring that leaders modified their strategies to manage risks and take advantage of opportunities. An executive dashboard uses KRIs, KPIs, an overall risk rating, and red-yellow-green coding. The board of directors regularly reviews this dashboard.

Over this evolution, the company has moved from narrow, tactical risk management to holistic, strategic, and long-term ERM.

Enterprise Risk Management Case Studies by Principle

ERM veterans agree that in addition to KPIs and KRIs, other principles are equally important to follow. Below, you’ll find examples of enterprise risk management programs by principles.

ERM Principle #1: Make Sure Your Program Aligns with Your Values

Raytheon Case Study U.S. defense contractor Raytheon states that its highest priority is delivering on its commitment to provide ethical business practices and abide by anti-corruption laws.

Raytheon backs up this statement through its ERM program. Among other measures, the company performs an annual risk assessment for each function, including the anti-corruption group under the Chief Ethics and Compliance Officer. In addition, Raytheon asks 70 of its sites to perform an anti-corruption self-assessment each year to identify gaps and risks. From there, a compliance team tracks improvement actions. 

Every quarter, the company surveys 600 staff members who may face higher anti-corruption risks, such as the potential for bribes. The survey asks them to report any potential issues in the past quarter.

Also on a quarterly basis, the finance and internal controls teams review higher-risk profile payments, such as donations and gratuities to confirm accuracy and compliance. Oversight and compliance teams add other checks, and they update a risk-based audit plan continuously.

ERM Principle #2: Embrace Diversity to Reduce Risk

State Street Global Advisors Case Study In 2016, the asset management firm State Street Global Advisors introduced measures to increase gender diversity in its leadership as a way of reducing portfolio risk, among other goals. 

The company relied on research that showed that companies with more women senior managers had a better return on equity, reduced volatility, and fewer governance problems such as corruption and fraud. 

Among the initiatives was a campaign to influence companies where State Street had invested, in order to increase female membership on their boards. State Street also developed an investment product that tracks the performance of companies with the highest level of senior female leadership relative to peers in their sector. 

In 2020, the company announced some of the results of its effort. Among the 1,384 companies targeted by the firm, 681 added at least one female director.

ERM Principle #3: Do Not Overlook Resource Risks

Infosys Case Study India-based technology consulting company Infosys, which employees more than 240,000 people, has long recognized the risk of water shortages to its operations. 

India’s rapidly growing population and development has increased the risk of water scarcity. A 2020 report by the World Wide Fund for Nature said 30 cities in India faced the risk of severe water scarcity over the next three decades. 

Infosys has dozens of facilities in India and considers water to be a significant short-term risk. At its campuses, the company uses the water for cooking, drinking, cleaning, restrooms, landscaping, and cooling. Water shortages could halt Infosys operations and prevent it from completing customer projects and reaching its performance objectives. 

In an enterprise risk assessment example, Infosys’ ERM team conducts corporate water-risk assessments while sustainability teams produce detailed water-risk assessments for individual locations, according to a report by the World Business Council for Sustainable Development .

The company uses the COSO ERM framework to respond to the risks and decide whether to accept, avoid, reduce, or share these risks. The company uses root-cause analysis (which focuses on identifying underlying causes rather than symptoms) and the site assessments to plan steps to reduce risks. 

Infosys has implemented various water conservation measures, such as water-efficient fixtures and water recycling, rainwater collection and use, recharging aquifers, underground reservoirs to hold five days of water supply at locations, and smart-meter usage monitoring. Infosys’ ERM team tracks metrics for per-capita water consumption, along with rainfall data, availability and cost of water by tanker trucks, and water usage from external suppliers. 

In the 2020 fiscal year, the company reported a nearly 64 percent drop in per-capita water consumption by its workforce from the 2008 fiscal year. 

The business advantages of this risk management include an ability to open locations where water shortages may preclude competitors, and being able to maintain operations during water scarcity, protecting profitability.

ERM Principle #4: Fight Silos for Stronger Enterprise Risk Management

U.S. Government Case Study The terrorist attacks of September 11, 2001, revealed that the U.S. government’s then-current approach to managing intelligence was not adequate to address the threats — and, by extension, so was the government’s risk management procedure. Since the Cold War, sensitive information had been managed on a “need to know” basis that resulted in data silos. 

In the case of 9/11, this meant that different parts of the government knew some relevant intelligence that could have helped prevent the attacks. But no one had the opportunity to put the information together and see the whole picture. A congressional commission determined there were 10 lost operational opportunities to derail the plot. Silos existed between law enforcement and intelligence, as well as between and within agencies. 

After the attacks, the government moved toward greater information sharing and collaboration. Based on a task force’s recommendations, data moved from a centralized network to a distributed model, and social networking tools now allow colleagues throughout the government to connect. Staff began working across agency lines more often.

Enterprise Risk Management Examples by Scenario

While some scenarios are too unlikely to receive high-priority status, low-probability risks are still worth running through the ERM process. Robust risk management creates a culture and response capacity that better positions a company to deal with a crisis.

In the following enterprise risk examples, you will find scenarios and details of how organizations manage the risks they face.

Scenario: ERM and the Global Pandemic While most businesses do not have the resources to do in-depth ERM planning for the rare occurrence of a global pandemic, companies with a risk-aware culture will be at an advantage if a pandemic does hit. 

These businesses already have processes in place to escalate trouble signs for immediate attention and an ERM team or leader monitoring the threat environment. A strong ERM function gives clear and effective guidance that helps the company respond.

A report by Vodafone found that companies identified as “future ready” fared better in the COVID-19 pandemic. The attributes of future-ready businesses have a lot in common with those of companies that excel at ERM. These include viewing change as an opportunity; having detailed business strategies that are documented, funded, and measured; working to understand the forces that shape their environments; having roadmaps in place for technological transformation; and being able to react more quickly than competitors. 

Only about 20 percent of companies in the Vodafone study met the definition of “future ready.” But 54 percent of these firms had a fully developed and tested business continuity plan, compared to 30 percent of all businesses. And 82 percent felt their continuity plans worked well during the COVID-19 crisis. Nearly 50 percent of all businesses reported decreased profits, while 30 percent of future-ready organizations saw profits rise. 

Scenario: ERM and the Economic Crisis  The 2008 economic crisis in the United States resulted from the domino effect of rising interest rates, a collapse in housing prices, and a dramatic increase in foreclosures among mortgage borrowers with poor creditworthiness. This led to bank failures, a credit crunch, and layoffs, and the U.S. government had to rescue banks and other financial institutions to stabilize the financial system.

Some commentators said these events revealed the shortcomings of ERM because it did not prevent the banks’ mistakes or collapse. But Sim Segal, an ERM consultant and director of Columbia University’s ERM master’s degree program, analyzed how banks performed on 10 key ERM criteria. 

Segal says a risk-management program that incorporates all 10 criteria has these characteristics: 

• Risk management has an enterprise-wide scope.
• The program includes all risk categories: financial, operational, and strategic. 
• The focus is on the most important risks, not all possible risks. 
• Risk management is integrated across risk types.
• Aggregated metrics show risk exposure and appetite across the enterprise.
• Risk management incorporates decision-making, not just reporting.
• The effort balances risk and return management.
• There is a process for disclosure of risk.
• The program measures risk in terms of potential impact on company value.
• The focus of risk management is on the primary stakeholder, such as shareholders, rather than regulators or rating agencies.

In his book Corporate Value of Enterprise Risk Management , Segal concluded that most banks did not actually use ERM practices, which contributed to the financial crisis. He scored banks as failing on nine of the 10 criteria, only giving them a passing grade for focusing on the most important risks. 

Scenario: ERM and Technology Risk  The story of retailer Target’s failed expansion to Canada, where it shut down 133 loss-making stores in 2015, has been well documented. But one dimension that analysts have sometimes overlooked was Target’s handling of technology risk. 

A case study by Canadian Business magazine traced some of the biggest issues to software and data-quality problems that dramatically undermined the Canadian launch. 

As with other forms of ERM, technology risk management requires companies to ask what could go wrong, what the consequences would be, how they might prevent the risks, and how they should deal with the consequences. 

But with its technology plan for Canada, Target did not heed risk warning signs. 

In the United States, Target had custom systems for ordering products from vendors, processing items at warehouses, and distributing merchandise to stores quickly. But that software would need customization to work with the Canadian dollar, metric system, and French-language characters. 

Target decided to go with new ERP software on an aggressive two-year timeline. As Target began ordering products for the Canadian stores in 2012, problems arose. Some items did not fit into shipping containers or on store shelves, and information needed for customs agents to clear imported items was not correct in Target's system. 

Target found that its supply chain software data was full of errors. Product dimensions were in inches, not centimeters; height and width measurements were mixed up. An internal investigation showed that only about 30 percent of the data was accurate. 

In an attempt to fix these errors, Target merchandisers spent a week double-checking with vendors up to 80 data points for each of the retailer’s 75,000 products. They discovered that the dummy data entered into the software during setup had not been altered. To make any corrections, employees had to send the new information to an office in India where staff would enter it into the system. 

As the launch approached, the technology errors left the company vulnerable to stockouts, few people understood how the system worked, and the point-of-sale checkout system did not function correctly. Soon after stores opened in 2013, consumers began complaining about empty shelves. Meanwhile, Target Canada distribution centers overflowed due to excess ordering based on poor data fed into forecasting software. 

The rushed launch compounded problems because it did not allow the company enough time to find solutions or alternative technology. While the retailer fixed some issues by the end of 2014, it was too late. Target Canada filed for bankruptcy protection in early 2015. 

Scenario: ERM and Cybersecurity System hacks and data theft are major worries for companies. But as a relatively new field, cyber-risk management faces unique hurdles.

For example, risk managers and information security officers have difficulty quantifying the likelihood and business impact of a cybersecurity attack. The rise of cloud-based software exposes companies to third-party risks that make these projections even more difficult to calculate. 

As the field evolves, risk managers say it’s important for IT security officers to look beyond technical issues, such as the need to patch a vulnerability, and instead look more broadly at business impacts to make a cost benefit analysis of risk mitigation. Frameworks such as the Risk Management Framework for Information Systems and Organizations by the National Institute of Standards and Technology can help.  

Health insurer Aetna considers cybersecurity threats as a part of operational risk within its ERM framework and calculates a daily risk score, adjusted with changes in the cyberthreat landscape. 

Aetna studies threats from external actors by working through information sharing and analysis centers for the financial services and health industries. Aetna staff reverse-engineers malware to determine controls. The company says this type of activity helps ensure the resiliency of its business processes and greatly improves its ability to help protect member information.

For internal threats, Aetna uses models that compare current user behavior to past behavior and identify anomalies. (The company says it was the first organization to do this at scale across the enterprise.) Aetna gives staff permissions to networks and data based on what they need to perform their job. This segmentation restricts access to raw data and strengthens governance. 

Another risk initiative scans outgoing employee emails for code patterns, such as credit card or Social Security numbers. The system flags the email, and a security officer assesses it before the email is released.

Examples of Poor Enterprise Risk Management

Case studies of failed enterprise risk management often highlight mistakes that managers could and should have spotted — and corrected — before a full-blown crisis erupted. The focus of these examples is often on determining why that did not happen. 

ERM Case Study: General Motors

In 2014, General Motors recalled the first of what would become 29 million cars due to faulty ignition switches and paid compensation for 124 related deaths. GM knew of the problem for at least 10 years but did not act, the automaker later acknowledged. The company entered a deferred prosecution agreement and paid a $900 million penalty. 

Pointing to the length of time the company failed to disclose the safety problem, ERM specialists say it shows the problem did not reside with a single department. “Rather, it reflects a failure to properly manage risk,” wrote Steve Minsky, a writer on ERM and CEO of an ERM software company, in Risk Management magazine. 

“ERM is designed to keep all parties across the organization, from the front lines to the board to regulators, apprised of these kinds of problems as they become evident. Unfortunately, GM failed to implement such a program, ultimately leading to a tragic and costly scandal,” Minsky said.

Also in the auto sector, an enterprise risk management case study of Toyota looked at its problems with unintended acceleration of vehicles from 2002 to 2009. Several studies, including a case study by Carnegie Mellon University Professor Phil Koopman , blamed poor software design and company culture. A whistleblower later revealed a coverup by Toyota. The company paid more than $2.5 billion in fines and settlements.

ERM Case Study: Lululemon

In 2013, following customer complaints that its black yoga pants were too sheer, the athletic apparel maker recalled 17 percent of its inventory at a cost of $67 million. The company had previously identified risks related to fabric supply and quality. The CEO said the issue was inadequate testing. 

Analysts raised concerns about the company’s controls, including oversight of factories and product quality. A case study by Stanford University professors noted that Lululemon’s episode illustrated a common disconnect between identifying risks and being prepared to manage them when they materialize. Lululemon’s reporting and analysis of risks was also inadequate, especially as related to social media. In addition, the case study highlighted the need for a system to escalate risk-related issues to the board. 

ERM Case Study: Kodak 

Once an iconic brand, the photo film company failed for decades to act on the threat that digital photography posed to its business and eventually filed for bankruptcy in 2012. The company’s own research in 1981 found that digital photos could ultimately replace Kodak’s film technology and estimated it had 10 years to prepare. 

Unfortunately, Kodak did not prepare and stayed locked into the film paradigm. The board reinforced this course when in 1989 it chose as CEO a candidate who came from the film business over an executive interested in digital technology. 

Had the company acknowledged the risks and employed ERM strategies, it might have pursued a variety of strategies to remain successful. The company’s rival, Fuji Film, took the money it made from film and invested in new initiatives, some of which paid off. Kodak, on the other hand, kept investing in the old core business.

Case Studies of Successful Enterprise Risk Management

Successful enterprise risk management usually requires strong performance in multiple dimensions, and is therefore more likely to occur in organizations where ERM has matured. The following examples of enterprise risk management can be considered success stories. 

ERM Case Study: Statoil 

A major global oil producer, Statoil of Norway stands out for the way it practices ERM by looking at both downside risk and upside potential. Taking risks is vital in a business that depends on finding new oil reserves. 

According to a case study, the company developed its own framework founded on two basic goals: creating value and avoiding accidents.

The company aims to understand risks thoroughly, and unlike many ERM programs, Statoil maps risks on both the downside and upside. It graphs risk on probability vs. impact on pre-tax earnings, and it examines each risk from both positive and negative perspectives. 

For example, the case study cites a risk that the company assessed as having a 5 percent probability of a somewhat better-than-expected outcome but a 10 percent probability of a significant loss relative to forecast. In this case, the downside risk was greater than the upside potential.

ERM Case Study: Lego 

The Danish toy maker’s ERM evolved over the following four phases, according to a case study by one of the chief architects of its program:

• Traditional management of financial, operational, and other risks. Strategic risk management joined the ERM program in 2006. 
• The company added Monte Carlo simulations in 2008 to model financial performance volatility so that budgeting and financial processes could incorporate risk management. The technique is used in budget simulations, to assess risk in its credit portfolio, and to consolidate risk exposure. 
• Active risk and opportunity planning is part of making a business case for new projects before final decisions.
• The company prepares for uncertainty so that long-term strategies remain relevant and resilient under different scenarios. 

As part of its scenario modeling, Lego developed its PAPA (park, adapt, prepare, act) model. 

• Park: The company parks risks that occur slowly and have a low probability of happening, meaning it does not forget nor actively deal with them.
• Adapt: This response is for risks that evolve slowly and are certain or highly probable to occur. For example, a risk in this category is the changing nature of play and the evolution of buying power in different parts of the world. In this phase, the company adjusts, monitors the trend, and follows developments.
• Prepare: This category includes risks that have a low probability of occurring — but when they do, they emerge rapidly. These risks go into the ERM risk database with contingency plans, early warning indicators, and mitigation measures in place.
• Act: These are high-probability, fast-moving risks that must be acted upon to maintain strategy. For example, developments around connectivity, mobile devices, and online activity are in this category because of the rapid pace of change and the influence on the way children play. 

Lego views risk management as a way to better equip itself to take risks than its competitors. In the case study, the writer likens this approach to the need for the fastest race cars to have the best brakes and steering to achieve top speeds.

ERM Case Study: University of California 

The University of California, one of the biggest U.S. public university systems, introduced a new view of risk to its workforce when it implemented enterprise risk management in 2005. Previously, the function was merely seen as a compliance requirement.

ERM became a way to support the university’s mission of education and research, drawing on collaboration of the system’s employees across departments. “Our philosophy is, ‘Everyone is a risk manager,’” Erike Young, deputy director of ERM told Treasury and Risk magazine. “Anyone who’s in a management position technically manages some type of risk.”

The university faces a diverse set of risks, including cybersecurity, hospital liability, reduced government financial support, and earthquakes.  

The ERM department had to overhaul systems to create a unified view of risk because its information and processes were not linked. Software enabled both an organizational picture of risk and highly detailed drilldowns on individual risks. Risk managers also developed tools for risk assessment, risk ranking, and risk modeling. 

Better risk management has provided more than $100 million in annual cost savings and nearly $500 million in cost avoidance, according to UC officials. 

UC drives ERM with risk management departments at each of its 10 locations and leverages university subject matter experts to form multidisciplinary workgroups that develop process improvements.

APQC, a standards quality organization, recognized UC as a top global ERM practice organization, and the university system has won other awards. The university says in 2010 it was the first nonfinancial organization to win credit-rating agency recognition of its ERM program.

Examples of How Technology Is Transforming Enterprise Risk Management

Business intelligence software has propelled major progress in enterprise risk management because the technology enables risk managers to bring their information together, analyze it, and forecast how risk scenarios would impact their business.

ERM organizations are using computing and data-handling advancements such as blockchain for new innovations in strengthening risk management. Following are case studies of a few examples.

ERM Case Study: Bank of New York Mellon 

In 2021, the bank joined with Google Cloud to use machine learning and artificial intelligence to predict and reduce the risk that transactions in the $22 trillion U.S. Treasury market will fail to settle. Settlement failure means a buyer and seller do not exchange cash and securities by the close of business on the scheduled date. 

The party that fails to settle is assessed a daily financial penalty, and a high level of settlement failures can indicate market liquidity problems and rising risk. BNY says that, on average, about 2 percent of transactions fail to settle.

The bank trained models with millions of trades to consider every factor that could result in settlement failure. The service uses market-wide intraday trading metrics, trading velocity, scarcity indicators, volume, the number of trades settled per hour, seasonality, issuance patterns, and other signals. 

The bank said it predicts about 40 percent of settlement failures with 90 percent accuracy. But it also cautioned against overconfidence in the technology as the model continues to improve. 

AI-driven forecasting reduces risk for BNY clients in the Treasury market and saves costs. For example, a predictive view of settlement risks helps bond dealers more accurately manage their liquidity buffers, avoid penalties, optimize their funding sources, and offset the risks of failed settlements. In the long run, such forecasting tools could improve the health of the financial market. 

ERM Case Study: PwC

Consulting company PwC has leveraged a vast information storehouse known as a data lake to help its customers manage risk from suppliers.

A data lake stores both structured or unstructured information, meaning data in highly organized, standardized formats as well as unstandardized data. This means that everything from raw audio to credit card numbers can live in a data lake. 

Using techniques pioneered in national security, PwC built a risk data lake that integrates information from client companies, public databases, user devices, and industry sources. Algorithms find patterns that can signify unidentified risks.

One of PwC’s first uses of this data lake was a program to help companies uncover risks from their vendors and suppliers. Companies can violate laws, harm their reputations, suffer fraud, and risk their proprietary information by doing business with the wrong vendor. 

Today’s complex global supply chains mean companies may be several degrees removed from the source of this risk, which makes it hard to spot and mitigate. For example, a product made with outlawed child labor could be traded through several intermediaries before it reaches a retailer. 

PwC’s service helps companies recognize risk beyond their primary vendors and continue to monitor that risk over time as more information enters the data lake.

ERM Case Study: Financial Services

As analytics have become a pillar of forecasting and risk management for banks and other financial institutions, a new risk has emerged: model risk . This refers to the risk that machine-learning models will lead users to an unreliable understanding of risk or have unintended consequences.

For example, a 6 percent drop in the value of the British pound over the course of a few minutes in 2016 stemmed from currency trading algorithms that spiralled into a negative loop. A Twitter-reading program began an automated selling of the pound after comments by a French official, and other selling algorithms kicked in once the currency dropped below a certain level.

U.S. banking regulators are so concerned about model risk that the Federal Reserve set up a model validation council in 2012 to assess the models that banks use in running risk simulations for capital adequacy requirements. Regulators in Europe and elsewhere also require model validation.

A form of managing risk from a risk-management tool, model validation is an effort to reduce risk from machine learning. The technology-driven rise in modeling capacity has caused such models to proliferate, and banks can use hundreds of models to assess different risks. 

Model risk management can reduce rising costs for modeling by an estimated 20 to 30 percent by building a validation workflow, prioritizing models that are most important to business decisions, and implementing automation for testing and other tasks, according to McKinsey.

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Case Study: Companies Excelling in Risk Management

In this article

In the modern business landscape, navigating uncertainties and pitfalls is essential for sustainable growth and longevity. Effective risk management emerges as a shield against potential threats – and it also unlocks opportunities for innovation and advancement. In this article, we will explore risk management and its significance and criteria for excellence. We will also examine case studies of two companies that have excelled in this domain. Through these insights, we aim to glean valuable lessons and best practices. As such, businesses across diverse industries can fortify their risk management frameworks.

The Significance of Risk Management

Risk management is vital for the sustenance and prosperity of companies, regardless of their size or industry. At its core, it is the identification, assessment and mitigation of potential risks that may impede organisational objectives or lead to adverse outcomes. Having a robust risk management approach means businesses can safeguard their assets, reputation and bottom line. 

The statistics are somewhat alarming. According to research , 69% of executives are not confident with their current risk management policies and practices. What’s more, only 36% of organisations have a formal enterprise risk management (ERM) programme. 

Proactive risk management isn’t just a defensive measure; rather, it is necessary for sustainability and growth. With 62% of organisations experiencing a critical risk event in the last three years, it is important to be proactive. By identifying and addressing potential risks, organisations can become more resilient to external shocks and internal disruptions. This means they’re better able to survive through difficult times and maintain operational continuity. Moreover, a proactive stance enables companies to seize strategic advantages. It allows them to innovate, expand into new markets and capitalise on emerging trends with confidence.

Criteria for Excellence in Risk Management

Achieving excellence in risk management means adhering to several key criteria:  

• Ability to Identify Risks: Exceptional risk management begins with identifying potential risks comprehensively. This involves a thorough understanding of both internal and external factors that could impact the organisation. It includes market volatility, regulatory changes, cybersecurity threats and operational vulnerabilities.
• Assessment of Risks: Once identified, risks must be assessed to gauge their potential impact and likelihood of occurrence. This involves using risk assessment methodologies like quantitative analysis, scenario planning and risk heat mapping, to prioritise risks based on their severity and urgency.
• Mitigation Strategies and Control Measures: Effective risk management relies on proactive mitigation strategies to minimise the likelihood of risk occurrence and mitigate its potential impact. This may involve implementing control measures, diversifying risk exposure, investing in risk transfer mechanisms such as insurance and enhancing resilience through business continuity planning.
• Adaptability to Change: Organisations need to be ready to adapt to emerging risks and changing circumstances. This requires a culture of continuous learning and improvement. This means lessons are learned from past experiences to enhance risk management practices and anticipate future challenges.
• Leadership Commitment: Effective leaders demonstrate a clear understanding of the importance of risk management. They know how to allocate adequate resources, support and incentives to prioritise risk management initiatives.
• Strong Risk Culture: A strong risk culture permeates every level of the organisation. This involves a mindset where risk management is viewed as everyone’s responsibility.
• Robust Risk Management Frameworks: Finally, excellence in risk management requires robust frameworks and processes to guide risk identification, assessment and mitigation efforts. This includes defining clear roles and responsibilities, implementing effective governance structures and leveraging technology and data analytics to enhance risk visibility and decision-making.

Company A: Case Study in Risk Management Excellence

Now, let’s take a look at a case study that highlights risk management excellence in practice.

ApexTech Solutions is a company known for its exemplary risk management practices. Founded in 2005 by visionary entrepreneur Sarah Lawson, ApexTech began as a small start-up in the tech industry. It specialises in software development and IT consulting services. 

Over the years, under Lawson’s leadership, the company expanded its offerings and diversified into various sectors, including cybersecurity solutions, cloud computing and artificial intelligence. Today, ApexTech is a prominent player in the global technology market, serving clients ranging from small businesses to Fortune 500 companies.

Risk management strategies and successes

ApexTech’s journey to risk management excellence can be attributed to several key strategies and initiatives:

• Comprehensive Risk Assessment: ApexTech conducts regular and thorough risk assessments to identify potential threats and vulnerabilities across its operations.
• Investment in Technology and Innovation: ApexTech prioritises investments in cutting-edge technologies such as AI-driven analytics, predictive modelling and threat intelligence solutions.
• Customer-Centric Approach: ApexTech tailors its risk management solutions to meet specific needs and preferences. This fosters trust and long-term partnerships.
• Cybersecurity Measures: ApexTech has made cybersecurity a top priority. The company employs a multi-layered approach to cybersecurity to mitigate the risk of cyberattacks.
• Continual Improvement and Adaptation: ApexTech fosters a culture of continual improvement and adaptation. The company encourages feedback and collaboration among employees at all levels so they can identify areas for improvement and implement solutions to mitigate risks effectively.

By proactively identifying and addressing operational risks, such as supply chain disruptions and regulatory compliance challenges, ApexTech has maintained operational continuity and minimised potential disruptions to its business operations.

ApexTech Solutions serves as a compelling example of a company that has excelled in risk management excellence by embracing proactive strategies, leveraging advanced technologies and fostering a culture of innovation and adaptation. 

Company B: Case Study in Risk Management Excellence

TerraSafe Pharmaceuticals is a renowned company in the pharmaceutical industry, dedicated to developing and manufacturing innovative medications to improve global health outcomes. Established in 1998 by Dr Elena Chen, TerraSafe initially focused on the production of generic drugs to address critical healthcare needs. 

Over the years, the company has expanded its portfolio to include novel biopharmaceuticals and speciality medications.

TerraSafe Pharmaceuticals has a holistic approach to identifying, assessing and mitigating risks across its operations:

• Rigorous Quality Assurance Standards: TerraSafe prioritises stringent quality assurance measures throughout the drug development and manufacturing process. This ensures product safety, efficacy and compliance with regulatory requirements.
• Investment in Research and Development (R&D): TerraSafe allocates significant resources to research and development initiatives. These are aimed at advancing scientific knowledge and discovering breakthrough therapies. With its culture of innovation and collaboration, the company mitigates the risk of product obsolescence.
• Regulatory Compliance and Risk Monitoring: TerraSafe maintains a dedicated regulatory affairs department. This team stays abreast of evolving regulatory requirements and industry standards. They monitor regulatory changes proactively and engage with regulatory authorities to ensure timely compliance with applicable laws and standards. This reduces the risk of non-compliance penalties and legal disputes.
• Supply Chain Resilience: TerraSafe works closely with its suppliers and logistics partners to assess and mitigate supply chain risks like raw material shortages, transportation disruptions and geopolitical instability. It implements contingency planning and diversification of sourcing strategies.
• Focus on Patient Safety and Ethical Practices: The company adheres to stringent ethical guidelines and clinical trial protocols to protect patient welfare and maintain public trust in its products and services.

By investing in R&D and adhering to rigorous quality assurance standards, TerraSafe has successfully developed and commercialised several breakthrough medications that address unmet medical needs and improve patient outcomes. What’s more, the company’s proactive approach to regulatory compliance has facilitated the timely approval and market authorisation of its products in key global markets. This has enabled the company to expand its geographic footprint and reach new patient populations.

Key Takeaways and Best Practices

Despite being in different industries, both companies share similarities. Both ApexTech and TerraSafe Pharmaceuticals know the importance of proactive risk management. They have procedures in place that work to identify, assess and mitigate risks before they escalate. What’s more, both companies are led by visionary leaders who set the tone for decision-making. They prioritise building a strong risk culture with all employees knowing their role in risk management.

Best practices and strategies employed

• Conducting Regular Risk Assessments: Both companies conduct regular and comprehensive risk assessments to identify potential threats and vulnerabilities across their operations.
• Investing in Training and Education: Both invest in training and education programmes so that employees are equipped with the knowledge and skills necessary to identify and manage risks effectively. Employees at all levels contribute to risk management efforts.
• Collaboration and Communication: Both companies know the importance of collaboration and communication in risk management. They create channels for open dialogue and information sharing. Stakeholders collaborate on risk identification, assessment and mitigation efforts.
• Continual Improvement: Both companies have a culture of continual improvement. They encourage feedback and innovation to adapt to changing circumstances and emerging risks.
• Tailored Risk Management Approaches: Both companies develop customised risk management frameworks and strategies that align with their objectives and priorities.

Emerging Trends in Risk Management

One of the most prominent trends in risk management is the increasing integration of technology into risk management processes. Advanced technologies such as artificial intelligence (AI), machine learning and automation are revolutionising risk assessment, prediction and mitigation. These technologies mean companies can analyse vast amounts of data in real time. This allows them to identify patterns and trends and predict potential risks more accurately.

Data analytics is another key trend reshaping risk management practices. Companies are leveraging big data analytics tools and techniques to gain deeper insights. By analysing historical data and real-time information, they can identify emerging risks, detect anomalies and make more informed risk management decisions.

Cybersecurity risks have become a major concern. Threats such as data breaches, ransomware attacks and phishing scams pose significant risks to companies’ data, operation and reputation. Companies are investing heavily in cybersecurity measures and adopting proactive approaches to protect their digital assets and mitigate cyber risks.

Companies are integrating global risk management into their overall risk management strategy too. They are monitoring global developments, assessing the impact of global risks on their business operations and developing contingency plans.

The Role of Leadership

Leadership plays a pivotal role in shaping organisational culture and driving initiatives that promote risk management excellence. Effective leaders recognise the importance of risk management but also actively champion its integration into the fabric of the organisation. Effective leaders:

• Set the Tone: Leaders set the tone by articulating a clear vision and commitment to risk management from the top down.
• Lead by Example: Leaders demonstrate their own commitment to risk management through their actions and decisions.
• Empower Employees: Leaders empower employees at all levels to actively participate in risk management efforts. They encourage employees to voice their concerns and contribute.
• Provide Resources and Support: Effective leaders invest in training and development programmes to enhance employees’ risk management skills and knowledge.
• Encourage Innovation: Leaders encourage employees to think creatively and experiment with new approaches to risk management.
• Promote Continuous Improvement: Leaders create opportunities for reflection and evaluation to identify areas for improvement and drive learning.

Encouraging a Risk-Aware Culture

For organisations to identify, assess and mitigate risks at all levels effectively, they need to encourage a risk-aware culture. Here are some tips for encouraging a risk-aware culture:

Communication and transparency:

• Encourage open communication channels where employees feel comfortable discussing risks and raising concerns.
• Provide regular updates on the organisation’s risk landscape, including emerging risks and mitigation strategies.
• Foster transparency in decision-making processes, particularly regarding risk-related decisions.

Education and training:

• Provide comprehensive training programmes on risk management principles, processes and tools for employees at all levels.
• Offer specialised training sessions on specific risk areas relevant to employees’ roles and responsibilities.
• Incorporate real-life case studies and examples to illustrate the importance of risk awareness and effective risk management.

Empowerment and ownership:

• Empower employees to take ownership of risk management within their respective areas of expertise.
• Encourage employees to identify and assess risks in their day-to-day activities and propose mitigation strategies.
• Recognise and reward employees who demonstrate proactive risk awareness and contribute to effective risk management practices.

Integration into performance management:

• Include risk management objectives and key performance indicators (KPIs) in employee performance evaluations.
• Link performance bonuses or incentives to successful risk management outcomes and adherence to risk management protocols.
• Provide feedback and coaching to employees on their risk management performance, highlighting areas for improvement and best practices.

Challenges in Risk Management

Challenges in risk management are inevitable, even for companies excelling in this domain. Despite their proactive efforts, all organisations encounter obstacles that can impede their risk management practices. Here are some common challenges and strategies for addressing them:

Complexity and interconnectedness:

• Challenge: The modern business environment is increasingly complex and interconnected, making it challenging for organisations to anticipate and mitigate all potential risks comprehensively.
• Strategy: Implement a holistic risk management approach that considers both internal and external factors impacting the organisation. Create cross-functional collaboration and information sharing to gain a comprehensive understanding of risks across departments and business units.

Rapidly evolving risks:

• Challenge: Risks are constantly evolving due to technological advancements, regulatory changes and global events such as pandemics or geopolitical shifts. Organisations may struggle to keep pace with emerging risks and adapt their risk management strategies accordingly.
• Strategy: Stay informed about emerging trends and developments that may impact the organisation’s risk landscape. Maintain flexibility and agility in risk management processes to respond promptly to new challenges.

Resource constraints:

• Challenge: Limited resources, including budgetary constraints and staffing limitations, can hinder organisations’ ability to invest adequately in risk management initiatives and tools.
• Strategy: Prioritise risk management activities based on their potential impact on organisational objectives and allocate resources accordingly. Leverage technology and automation to streamline risk management processes and maximise efficiency.

Compliance and regulatory burden:

• Challenge: Meeting regulatory requirements and compliance standards can be burdensome and complex.
• Strategy: Stay abreast of regulatory developments and ensure compliance with applicable laws and regulations. Implement robust governance frameworks and internal controls to demonstrate regulatory compliance and mitigate legal and reputational risks. Invest in compliance training and education for employees.

Human factors and behavioural biases:

• Challenge: Human factors such as cognitive biases, organisational politics and resistance to change can undermine effective risk management practices, leading to decision-making errors and oversight of critical risks.
• Strategy: Raise awareness about common cognitive biases and behavioural tendencies that may influence risk perception and decision-making. Create a culture of psychological safety where employees feel comfortable challenging assumptions and raising concerns about potential risks.

Conclusion: Striving for Excellence

In this article, we have explored the importance of effective risk management for businesses. We have delved into the criteria for excellence in risk management, showcasing companies such as ApexTech Solutions and TerraSafe Pharmaceuticals that exemplify these principles through their proactive strategies and robust frameworks.

From embracing technology and fostering a culture of innovation to prioritising regulatory compliance and empowering employees, these companies have demonstrated remarkable achievements in navigating complex risk landscapes and achieving sustainable success.

However, it’s essential to recognise that even companies excelling in risk management face challenges. By acknowledging these and implementing strategies to address them, organisations can enhance their resilience and effectiveness in managing risks over the long term.

Assessing Risk

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About the author

Louise Woffindin

Louise is a writer and translator from Sheffield. Before turning to writing, she worked as a secondary school language teacher. Outside of work, she is a keen runner and also enjoys reading and walking her dog Chaos.

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A case study exploring field-level risk assessments as a leading safety indicator

Lead research behavioral scientist and research behavioral scientist, respectively, National Institute for Occupational Safety and Health, Pittsburgh, PA, USA

B.P. Connor

J. vendetti.

Manager, mining operations, Solvay Soda Ash & Derivatives North America, Green River, WY, USA

CSP, Mine production superintendent, Solvay Chemicals Inc., Green River, WY, USA

Health and safety indicators help mine sites predict the likelihood of an event, advance initiatives to control risks, and track progress. Although useful to encourage individuals within the mining companies to work together to identify such indicators, executing risk assessments comes with challenges. Specifically, varying or inaccurate perceptions of risk, in addition to trust and buy-in of a risk management system, contribute to inconsistent levels of participation in risk programs. This paper focuses on one trona mine’s experience in the development and implementation of a field-level risk assessment program to help its organization understand and manage risk to an acceptable level. Through a transformational process of ongoing leadership development, support and communication, Solvay Green River fostered a culture grounded in risk assessment, safety interactions and hazard correction. The application of consistent risk assessment tools was critical to create a participatory workforce that not only talks about safety but actively identifies factors that contribute to hazards and potential incidents. In this paper, reflecting on the mine’s previous process of risk-assessment implementation provides examples of likely barriers that sites may encounter when trying to document and manage risks, as well as a variety of mini case examples that showcase how the organization worked through these barriers to facilitate the identification of leading indicators to ultimately reduce incidents.

Introduction

Work-related health and safety incidents often account for lost days on the job, contributing to organizational/financial and personal/social burdens ( Blumenstein et al., 2011 ; Pinto, Nunes and Ribeiro, 2011 ). Accompanying research demonstrates that risk and ambiguity around risk contribute to almost every decision that individuals make throughout the day ( Golub, 1997 ; Suijs, 1999 ). In response, understanding individual attitudes toward risk has been linked to predicting health and safety behavior ( Dohmen et al., 2011 ). Although an obvious need exists to identify more comprehensive methods to assess and mitigate potential hazards, some argue that risk management is not given adequate attention in occupational health and safety ( Haslam et al., 2016 ). Additionally, research suggests that a current lack of knowledge, skills and motivation are primary barriers to worker participation in mitigating workplace risks ( Dohmen et al., 2011 ; Golub, 1997 ; Haslam et al., 2016 ; Suijs, 1999 ). Therefore, enhancing knowledge and awareness around risk-based decisions, including individuals’ abilities to understand, measure and assign levels of risk to determine an appropriate response, is increasingly important in hazardous environments to predict and prevent incidents.

This paper focuses on one field-level risk assessment (FLRA) program, including a matrix that anyone can use to assess site-wide risks and common barriers to participating in such activities. We use a trona mine in Green River, WY, to illustrate that a variety of methods may be needed to successfully implement a proactive risk management program. By discussing the mine’s tailored FLRA program, this paper contributes to the literature by providing (1) common barriers that may prevent proactive risk assessment programs in the workplace and (2) case examples in the areas of teamwork, front-line leadership development, and tangible and intangible communication efforts to foster a higher level of trust and empowerment among the workforce.

Risk assessment practices to reveal leading indicators

Risk assessment is a process used to gather knowledge and information around a specific health threat or safety hazard ( Smith and Harrison, 2005 ). Based on the probability of a negative incident, risk assessment also includes determining whether or not the level of risk is acceptable ( Lindhe et al., 2010 ; International Electrotechnical Commission, 1995 ; Pinto, Nunes and Ribeiro, 2011 ). Risk assessments can occur quantitatively or qualitatively. Research values both types in high-risk occupations to ensure that all possible hazards and outcomes have been identified, considered and reduced, if needed ( Boyle, 2012 ; Haas and Yorio, 2016 ; Hallenbeck, 1993 ; International Council on Mining & Metals (ICMM), 2012 ; World Health Organization (WHO), 2008 ). Quantitative methods are commonly found where the site is trying to reduce a specific health or environmental exposure, such as respirable dust or another toxic substance ( Van Ryzin, 1980 ). These methods focus on a specific part of an operation or task within a system, rather than the system as a whole ( Lindhe et al., 2010 ). Conversely, a qualitative approach is useful for potential or recently identified risks to decide where more detailed assessments may be needed and prioritize actions ( Boyle, 2012 ; ICMM, 2012 ; WHO, 2008 ).

Although mine management can use risk assessments to inform procedural decisions and policy changes, they are more often used by workers to identify, assess and respond to worksite risks. A common risk assessment practice is to formulate a matrix that prompts workers to identify and consider the likelihood of a hazardous event and the severity of the outcome to yield a risk ranking ( Pinto, Nunes and Ribeiro, 2011 ). After completing such a matrix and referring to the discretized scales, any organizational member should be able to determine and anticipate the risk of a hazard, action or situation, from low to high ( Bartram, 2009 ; Hokstad et al., 2010 ; Rosén et al., 2006 ). The combination of these two “scores” is used to determine whether the risk is acceptable, and subsequently, to identify an appropriate response. For example, a list of hazards may be developed and evaluated for future interventions, depending upon the severity and probability of the hazards. Additionally, risk assessments often reveal a prioritization of identified risks that inform where risk-reduction actions are more critical ( Lindhe et al., 2010 ), which may result in changes to a policy or protocol ( Boyle, 2012 ).

If initiated and completed consistently, risk assessments allow root causes of accidents and patterns of risky behavior to emerge — in other words, leading indicators ( Markowski, Mannan and Bigoszewska, 2009 ). Leading indicators demonstrate pre-incident trends rather than direct measures of performance, unlike lagging indicators such as incident rates, and as a result, are useful for worker knowledge and motivation ( Juglaret et al., 2011 ). Recently, high-risk industries have allocated more resources to preventative activities — not only to prevent injuries but also to avoid the financial costs associated with incidents — which has produced encouraging results ( Maniati, 2014 ; Robson et al., 2007 ). However, research has pointed to workers’ general confusion about the interpretation of hazards and assignment of probabilities as a hindrance to appropriate risk identification and response ( Apeland, Aven and Nilsen, 2002 ; Reason, 2013 ). In response, better foresight into the barriers of risk management is needed to (1) engage workers in risk identification and assessment, and (2) develop pragmatic solutions to prevent incidents.

Methods and materials

In December 2015, Haas and Connor, two U.S. National Institute for Occupational Safety and Health (NIOSH) researchers, traveled to Solvay Green River’s mine in southwest Wyoming. This trona mine produces close to 3 Mt/a of soda ash using a combination of longwall and solution mining and borer miners ( Fiscor, 2015 ). A health, safety and risk management framework had been introduced in phases during 2009 and 2010 to the mine’s workforce of more than 450 to help reduce risks to an acceptable level, and NIOSH wanted to understand all aspects of this FLRA program and how it became integrated into everyday work processes. We collected an extensive amount of qualitative data, analyzed the material and triangulated the results to inform a case study in health and safety system implementation ( Denzin and Lincoln, 2000 ; Pattson, 2002 ; Yin, 2014 ). The combination of expert interviews, existing documentary materials, and observation of onsite activities provided a holistic view of both post-hoc and current data points, allowing for various contexts to be compared and contrasted to determine consistency and saturation of the data ( Wrede, 2013 ).

Participants

We collected several qualitative data points, including all-day expert interviews and discussions with mine-site senior-level management such as the mine manager, health and safety manager, and mine foremen/supervisors, some of whom were hourly workers at the time of the risk assessment program implementation ( Flick, 2009 ). Additionally, we heard presentations from the mine managers and site supervisors, received archived risk assessment documents and were able to engage in observations on the surface and in the underground mine operation during the visit, where several mineworkers engaged in conversations about the FLRA, hazard interactions, and general safety culture on site.

Retrospective data analysis of risk assessment in action

Typically, qualitative analysis and triangulation of case study data use constant comparison techniques, sometimes within a grounded theory framework ( Corbin and Strauss, 2008 ; Glaser and Strauss, 1967 ). We employed the constant comparison method within a series of iterative coding steps. First, we typed the field notes and interview notes, and scanned the various risk assessment example documents received during the visit. Each piece of data was coded for keywords and themes through an initial, focused and then constant comparison approach ( Boyatzis, 1998 ; Fram, 2013 ).

Throughout the paper, quotes and examples from employees who participated in the visit are shared to better demonstrate their process to establish the FLRA program. To address the reliability and validity of our interpretation of the data, the two primary, expert information providers during the field visit, Vendetti and Heiser, became coauthors and served as member checkers of the data to ensure all information was described in a way that is accurate and appropriate for research translation to other mine sites ( Kitchener, 2002 ).

It is important to know that in 2009 Solvay experienced a sharp increase in incidents in its more-than-450-employee operation. Although no fatalities occurred, there were three major amputations and injury frequencies that were increasing steadily. The root causes of these incidents — torn ligaments/tendons/muscles requiring surgical repair or restricted duty; lacerations requiring sutures; and fractures ( Mine Safety and Health Administration, 2017 ) — showed that inconsistent perceptions of risk and mitigation efforts were occurring on site among all types of work positions, from bolters to maintenance workers. These incidents caused frustration and disappointment among the workforce.

Intervention implementation, pre- and post-FLRA program

Faced with inconsistencies in worker knowledge of risks and varying levels of risk tolerance, management could have taken a punitive, “set an example” response, based on an accountability framework. Instead, they began a process in 2009 to bring new tools, methods and mindset to safety performance at the site. Specifically, based on previous research and experience, such as from 1998, they saw the advantages of creating a common, site-wide set of tools and metrics to guide workers in a consistent approach to risk assessment in the field. This involvement trickled down to hourly workers in the form of a typical risk assessment matrix ( Table 1 ) described earlier to identify, assess and evaluate risks. Management indicated that if everyone had tools, then “It doesn’t matter what you knew or what you didn’t, you had tools to assess and manage a situation.” They hypothesized that matrices populated by workers would reveal leading indicators to proactively identify and prevent incidents that had been occurring on site. Workers were expected to utilize this matrix daily to help identify and evaluate risks.

Risk assessment matrix used by Solvay ( Heiser and Vendetti, 2015 ).

To complete the matrix, workers rate consequences of a risk using the scales/key depicted in Table 2 . As shown in the color-coded matrix, multiplying the scores for these two areas yields a risk ranking of low, moderate, high or critical, thereby providing guidance on what energies or hazards to mitigate immediately. Although the matrix approach, specifically, may not be new to the industry, the implementation and evaluation of such efforts offer value in the form of heightened engagement, leadership and eventually behavior change.

Evaluation matrix key ( Heiser and Vendetti, 2015 ).

Observing incidents post-implementation of the FLRA intervention during 2009 and front-line leadership efforts during 2010, much can be learned to understand where and how impact occurred on site. Figure 1 shows Green River’s 2009 spike in non-fatal days lost (NFDL) incidents with a consistent drop thereafter, providing cursory support of the program.

Solvay non-fatal days lost operator injuries, 2006–2016 ( MSHA, 2017 ).

Seeing a drop in incidents provides initial support for the FLRA program that Solvay introduced. Knowing that many covariates may account for a drop in incidents, however, additional data were garnered from MSHA’s website to account for hours worked. Still, the incident rate declined consistently, as shown in Fig. 2 .

Non-fatal days lost operator injury incidence rate (injuries by hours worked), 2006–2016 ( MSHA, 2017 ).

From a quantitative tracking effort of these lagging indicators, it can be gleaned that the implemented program was successful. However, it is important to understand what, how and why incidents decreased over time to maintain consistency in implementation and evaluation efforts. In response, this paper focuses on the qualitative data that NIOSH collected in hopes of sharing how common barriers to risk assessment can be addressed to identify leading indicators on site.

During the iterative analysis of the data, researchers sorted the initial and ongoing barriers to continuous risk assessment. The results provide insight into promising ways to measure and document as well as support and manage a risk-based program over several years. After common barriers to risk assessment implementation are discussed, mini case examples to illustrate how the organization improved and used their FLRA process to identify leading indicators follow. Ultimately, these barriers and organizational responses show that an FLRA program can help (1) measure direct/indirect precursors to harm and provide opportunities for preventative action, (2) allow the discovery of proactive leadership risk reduction strategies, and (3) provide warning before an undesired event occurs and develop a database of response strategies ( Blumenstein et al., 2011 ; ICMM, 2012 ).

Barrier to risk assessment intervention: Varying levels of risk tolerance and documentation

An initial challenge, not uncommon in occupational health and safety, was the varying levels of risk tolerance possessed by the workforce. Research shows that individuals have varying levels of knowledge, awareness and tolerance in their abilities to recognize and perceive risks as unacceptable ( Brun, 1992 ; Reason, 2013 ; Ruan, Liu and Carchon, 2003 ). Managers and workers reflected that assessments of a risk were quite broad, having an impact on the organization’s ability to consistently identify and categorize hazards. One employee who was an hourly worker at the time of the FLRA implementation said, “It took time to establish a sensitivity to potential hazards.” This is not particularly surprising; as individuals gain experience, they can become complacent with health and safety risks and, eventually, have a lower sense of perceived susceptibility and severity of a negative outcome ( Zohar and Erev, 2006 ). As a result, abilities to consistently notice and believe that a hazard poses threat to their personal health and safety decreases. The health and safety manager said, “It took a long time to get through to people that this isn’t the same as what they do every day. To really assess a risk you have to mentally stop what you’re doing and consider something.”

Eventually, management developed an understanding that risk tolerance differed individually and generationally onsite, acknowledging that sources of risk are always changing in some regard and tend to be more complicated for some employees to see than others. In response, discussions about the importance of encouraging conscious efforts of risk management became ongoing to support a new level of awareness on site. Additionally, the value of documenting risk assessment efforts on an individual and group level became more apparent. One area emphasized was encouraging team communication around risk assessment if it was warranted. An example of this process and outcome is detailed below to help elucidate how Solvay overcame disparate perceptions of risk through teamwork.

Case example: FLRA discussion and documentation in action

An example of the FLRA in action as a leading indicator was provided by the maintenance supervisor during the visit. This example included an installation of a horizontal support beam. Workers collectively completed an FLRA to determine if they could simply remove the gantry system without compromising the integrity of the headframe. As part of their FLRA process, workers were expected to identify energies/hazards that could exist during this job task. Hazards that they recorded for this process for consideration within the matrix as possible indicators included:

• Working from heights/falling.
• Striking against/being struck by objects.
• Pinch points.
• Traction and balance.
• Hand placement.
• Caught in/on/between objects.

An initial risk rank was provided for each of the identified hazards, based on the matrix ( Tables 1 and ​ and2). 2 ). Based on the initial risk rank, workers decided which controls to implement to minimize the risk to an acceptable level. Examples of controls implemented included:

• Review the critical lift plan.
• Conduct a pre-job safety and risk assessment meeting.
• Inspect all personal protective equipment (PPE) fitting and harnesses.
• Understand structural removal sequence.
• Communicate between crane operator and riggers.
• Assure 100 percent of tie-off protocol is followed.
• Watch out for coworkers.
• Participate in housekeeping activities.

Upon determining and implementing controls, a final risk rank was rendered to make a decision for the job task: whether or not the headframe could be removed in one section. Ultimately, workers decided it could safely be done. However, management emphasized the importance of staying true to their FLRA. They said that 50 percent of their hoisting capabilities are based on wind and that if the wind is too high, they shut down the task, which happened one day during this process. So, although an FLRA was completed and provided a documented measurement and direction about what decisions to carry out, the idea of staying true to a minute-by-minute risk assessment was important and adhered to for this task.

In this sense, the FLRAs served as a communication platform to share a common language and ultimately, common proactive behavior. In general, vagueness of data on health and safety risks can prevent hazard recognition, impair decision-making, and disrupt risk-based decisions among workers ( Ruan, Liu and Carchon, 2003 ). This example showed that the more workers understood what constitutes an acceptable level of risk, the greater sense of shared responsibility they had to prevent hazards and make protective decisions on the job ( Reason, 1998 ) such as shutting down a procedure due to potential problems. Now, workers have the ability to implement their own check-and-balance system to determine if a response is needed and their decision is supported. Treating the FLRA as a check-and-balance system allowed workers to improve their own risk assessment knowledge, skills and motivation, a common barrier to hazard identification ( Haslam et al., 2016 ). In theory, as FLRAs are increasingly used to predetermine possible incidents and response strategies are developed and referenced, the occurrence of lagging indicators should decrease, as has been the case at Solvay in recent years.

Barrier to risk assessment intervention: Resisting formal risk assessment methods

Worksites often face challenges of determining the best ways to measure and develop suitable tools to facilitate consistent risk measurement ( Boyle, 2012 ; Haas and Yorio, 2016 ; Haas, Willmer and Cecala, 2016 ). For example, research shows that assessing site risks using a series of checklists or general observations during site walkthroughs is more common ( Navon and Kolten, 2006 ). Although practical, checklists and observations require little cognitive investment and have more often been insufficient in revealing potential safety problems ( Jou et al., 2009 ). Due to familiarity with “the way things were,” implementing the system of risk assessments at Solvay came with challenges. Workers experienced initial resistance to moving toward something more formal.

For example, at the outset, hourly workers said they felt, “I do this in my head all the time. I just don’t write it down.” Particularly, individuals who were hourly workers at the time of the FLRA program implementation felt that they already did some form of risk identification and that they did not need to go into more detail to assess the risk. Just as some workers did not see a difference with what they did implicitly, and so discounted the value of conducting an FLRA, others did not think they needed to take action based on their matrix risk ranking. As one worker reflected on the previous mindset, he said, “It would be okay to be in the red, so long as you knew you were in the red.” Because of the varying levels of initial acceptance, there were inconsistencies in the quality of the completed risk assessment matrices. Management noted, “Initially, people were doing them, but not to the quality they could have been.” In response, Solvay management focused on strengthening their frontline leadership skills to help facilitate hourly buy-in, as described in the following case example.

Case example: Starting with frontline leadership to facilitate buy-in, “The Club”

To facilitate wider commitment and buy-in, senior-level management took additional steps with their frontline supervisors. To train frontline leaders on how to understand rather than punish worker actions, Solvay management started a working group in 2010 called “The Club.” This group consisted of supervisory personnel within various levels of the organization. The purpose of The Club was to develop leaders and a different sort of accountability with respect to safety. One of its first actions was to, as a group, agree on qualities of a safety leader. From there, they eventually executed a quality leadership program that embraced the use of the risk assessment tools and their outcomes ( Fiscor, 2015 ; Heiser and Vendetti, 2015 ).

After receiving this leadership training and engaging in discussions about FLRA, the execution of model leadership from The Club started. Specifically, the frontline foremen that the researchers talked with indicated that they were better able to communicate about and manage safety across the site. Prior to The Club and adapting to the FLRA, one of these supervisors reflected, “No one wanted to make a safety decision.” Senior management acknowledged with their frontline leadership that the FLRA identifies steps that anyone might miss because they are interlocked components of a system. Because of the complex risks present on site, they discussed the importance of sitting down and reviewing with hourly workers if something happened or went wrong. They shared the importance of supportive language: “We say ‘let’s not do this again,’ but they don’t get in trouble.”

To further illustrate the leadership style and communicative focus, one manager shared a conversation conducted with a worker after an incident. Rather than reprimanding the worker’s error in judgement, the manager asked: “What was going through your mind before, during this task? I just want to understand you, your choices, your thought process, so we can prevent someone else from doing the same thing, making those same choices.” After the worker acknowledged he did not have the right tools but tried to improvise, the manager asked him what other risky choices he had made that turned out okay. This process engaged the worker, and he “really opened up” about his perceptions and behaviors on site. This incident is an example of site leaders establishing accountability for action but ensuring that adequate resources and site support were available to facilitate safer practice in the future ( Yorio and Willmer, 2015 ; Zohar and Luria, 2005 ). In other words, management used these conversations not only to educate the workers about hazards involved in complex systems, but also to enact their positive safety culture.

Importantly, this communication and documentation among The Club allowed insight into how employees think, serving as a leading indicator for health and safety management. The stack of FLRAs that were pulled out — completed between 2009 and 2015 — were filled out with greater detail as the years progressed. It was apparent that the hourly workforce continually adapted, resulting in an improved sense of organizational motivation, culture and trust. Management indicated to NIOSH that workers now have an increased sense of empowerment to identify and mitigate risks. Contrary to how workers used to document their risk assessments, a management member said: “You pull one out today, and even if it isn’t perfect, the fundamentals are all there, even if it isn’t exactly how we would do it. And more likely than not, you’d pull out one and find it to be terrific.”

Barrier to risk assessment intervention: Communicate and show tangible support for risk assessment methods

A lack of management commitment, poor communication and poor worker involvement have all been identified as features of a safety climate that inhibit workers’ willingness to proactively identify risks ( Rundmo, 2000 ; Zohar and Luria, 2005 ). Therefore, promoting these organizational factors was needed to encourage workers to identify hazards and prevent incidents ( Pinto et al., 2011 ). When first rolling out their FLRA process, Solvay management knew that if they were going to transform safety practices at the mine, there had to be open communication between hourly and salary workers about site conditions and practices ( Fiscor, 2015 ; Heiser and Vendetti, 2015 ; Neal and Griffin, 2006 ; Reason, 1998 ; Rundmo, 2000 ; Wold and Laumann, 2015 ; Zohar and Luria, 2005 ). They discussed preparing themselves to be “exposed” to such information and commit as a group to react in a way that would maintain buy-in, use and behavior.

Creating a process of open sharing meant that, especially at the outset, management was likely to hear things that they didn’t necessarily want to hear. Despite perhaps not wanting to hear feedback against a policy in place or attitude of risk acceptance, all levels of management wanted to communicate their understanding for changing risks and hazards, and the need to sometimes adapt policies in place based on changing energies in the environment, as revealed by the FLRAs that the workers were taking time to complete. The following case example showcases the value of ongoing communication to maintain a risk assessment program and buy-in from workers.

Case example: Illustrating flexibility with site procedures

During the visit, managers and workers both discussed the conscious efforts made during group meetings and one-on-one interactions to improve their organizational leadership and communication, noting the difficulty of incorporating the FLRA as a complement to existing rules and regulations on site: “We needed to continually stress the importance of utilizing the risk assessment tool, and if something were to occur, to evaluate the level of controls implemented during a reassessment of the task.” To encourage worker accountability, the managers wanted to show their commitment to the FLRA process and that they could be flexible in changing a rule or policy if the risk assessment showed a need. As an example, they showed NIOSH a “general isolation” procedure about lock-out/tag-out that was distributed at their preshift safety meeting that morning. They handed out a piece of paper saying that, “While a visual disconnect secured with individual locks is always the preferred method of isolation, there are specific isolation procedures for tasks unique to underground operations.” The handout went on to state: “In rare circumstances, when a visual disconnect with lock is not used and circumstances other than those specifically identified are encountered, a formal documented risk assessment will be performed. All potential energies will be identified and understood, every practical barrier at the appropriate level will be identified and implemented, and the foreman in charge of the task will approve with his/her signature prior to performing the work. All personnel involved in the job or task must review and understand the energies and barriers implemented prior to any work being performed…”

This example shows the site’s commitment to risk assessment while also showing that, if leading indicators are identified, a policy can be changed to avoid a potential incident. Noting that they would change a procedure if workers identified something, the document illustrated management’s confidence and value in the FLRA process. Workers indicated that these behaviors are a support mechanism for them and their hazard identification efforts. Along the same lines, the managers we talked with noted the importance of not just training to procedure but also to emphasize: “High-level policies complement but don’t drive safety.” This example showcases their leadership and communicative commitment.

The lock-out/tag-out example is just one safety share that occurred at a preshift meeting. These shares “might be no more than five minutes, they might go a half-hour, but they’re allowed to take as long as they need,” one manager said. This continued commitment to foster the use of leading indicators to support a health and safety management program has shown that the metrics used to assess risks are only as good as the response to those metrics to support and encourage health and safety as well as afforded workers an opportunity to engage in improving the policies and rules on site. This continued consistency in communication helped to create a sense of ownership among workers, which led them to recognize the need for a minute-to-minute thought process that helped them foresee consequences, probabilities, and deliberate different response options. As one manager said, “You can have a defined plan but an actual risk assessment shows the dynamics of a situation and allows different plans to emerge.”

Limitations and conclusions

The purpose of this paper was to illustrate an example in which everyone could participate to identify leading safety indicators. In everyone’s judgment, it took about four to five years until Solvay actually saw the change in action, meaning that the process was sustained by workers and they were using the risk assessment terminology in their everyday discussions. In addition to providing how leading indicators can be developed or look “in action,” this paper advanced the discussion to provide insight into common barriers to risk assessment, and potential responses to these barriers. As Figs. 1 and ​ and2 2 show, incidents had been down at Solvay since the implementation of the FLRA program and enhanced leadership training of frontline supervisors, showing the impact of the FLRAs as a strong leading indicator for health and safety. Additionally, hourly workers discussed how much better the culture is on site now than it was several years ago, noting their appreciation for having a common language on site to communicate about risks. It is rare that both sides — hourly and salary — see benefits in a written tool from an operational and behavioral standpoint. The cooperation on site speaks to the positive attributes discussed within this case study and mini examples provided that cannot be shown in a graph.

Although the results of this study are only part of a small case study and cannot be generalized across the industry, data support the argument that poor leadership and an overall lack of trust on site can inhibit workers’ willingness to participate in risk measurement, documentation and decision-making. Obviously, the researchers could not talk with every worker and manager present on site, so not all opinions are reflected in this paper. However, the consistency in messages from both levels of the organization showed saturation of insights that reflect the impact of the FLRAs. It is acknowledged that some of this information may already be known and utilized by mine site leadership. However, because the focus of the study was not only on the development and use of specific risk measurement tools, but the organizational practices that are needed to foster such proactive behavior, the results provide several potential areas of improvement for the industry in terms of formal risk assessment over a period of time.

In lieu of these limitations, mine operators should consider this information when interpreting the results in terms of (1) how to establish formal risk assessment on site, especially when trying to identify and mitigate hazards, (2) what the current mindset of frontline leadership may be and how they could support (or hinder) such an risk assessment program and (3) methods to consistently support a participatory risk assessment program. Gaining an in-depth view of Solvay’s own health and safety journey provides expectations and a possible roadmap for encouraging worker participation in risk management at other mine sites to proactively prevent health and safety incidents.

Acknowledgments

The authors wish to thank the Solvay Green River operation for its participation and cooperation in this case study and for openly sharing their experiences.

The findings and conclusions in this paper are those of the authors and do not necessarily represent the views of NIOSH. Reference to specific brand names does not imply endorsement by NIOSH.

Contributor Information

E.J. Haas, Lead research behavioral scientist and research behavioral scientist, respectively, National Institute for Occupational Safety and Health, Pittsburgh, PA, USA.

B.P. Connor, Lead research behavioral scientist and research behavioral scientist, respectively, National Institute for Occupational Safety and Health, Pittsburgh, PA, USA.

J. Vendetti, Manager, mining operations, Solvay Soda Ash & Derivatives North America, Green River, WY, USA.

R. Heiser, CSP, Mine production superintendent, Solvay Chemicals Inc., Green River, WY, USA.

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Behavioural Risk Management

By René Doff

First published:

ISBN:  9781782724230

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Case Studies on Risk Management Failure

An Introduction to Behavioural Risk Management

Risk Management Context

Value-at-Risk as the Dominant Risk Management Tool in the Financial Industry

The Role of Regulation in Risk Management

Advances in Behavioural Economics and Finance

Behavioural Issues with Probability

Systems Theory

Using Scenarios

Making Robust Decisions

Advances in the Risk Management Process

Behavioural Risk Management in the Financial Markets

Countervailing Power

Behavioural Risk Management: Closing Thoughts

Appendix: Selective list of Behavioural Biases

Bibliography

Having understood the advantages and disadvantages of traditional risk management in the previous chapter, this chapter will analyse five case studies. In each of them, traditional risk management activities fell short because unwanted risks materialised with significant financial effect. The chapter will also provide some generic guidance that will help prepare us for the analysis in the remainder of this book. Despite the knowledge of hindsight, it is worth emphasising that none of the stakeholders involved in these examples would have stated at the time that risk management was unimportant for them. They all practiced some form of risk management to keep abreast of developments, and what really matters is the underlying belief of how risk management would be practised.

CASE STUDY 1: LEHMAN BROTHERS

Amid the global financial crisis, Lehman Brothers filed for bankruptcy on September 15, 2008. It is said to be the largest and most complex bankruptcy in US history. At the time, Lehman Brothers was the fourth largest investment bank in the world and was over 150 years old, being founded as a trading company in 1850. It evolved well and played an important role in the creation

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Risk Management in Banking: Case Studies

These case studies involving risk management in banking demonstrate how to handle complex situations successfully. Learn more today.

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Risk Management in banking comes with a significant number of challenges, as banks must stay compliant with endlessly changing rules while making transactions seamless for customers. Eliassen Group is known for our considerable risk and compliance experience in the financial services industry, and we can support teams that must respond to Matters Requiring Attention (MRAs) and other regulatory actions. For proof, look no further than these recent case studies for two top 25 global banks.

Case Study #1: Deployment of Enterprise-Wide Risk Management Framework and Supporting Capabilities

To respond to regulatory actions and MRAs, this global bank needed to deploy an enhanced enterprise-level Risk Management Framework and supporting capabilities across all Front-Line Units with requirements that impacted all lines of business. This would be a daunting task for any company. Luckily, the client had worked with Eliassen Group in the past, and they knew that we could help them embed sustainable, repeatable controls into the client's processes.

We led the deployment of key Risk Management Framework process, system, and policy components across one of the lines of business. Not only did we meet immediate deadlines and go beyond expectations, but aspects of our approach were also adopted by all business groups across the enterprise. During the engagement, we successfully transitioned the program to new executive and workstream leadership as the client made broad organizational changes.

"We focus on helping our clients implement and execute their risk management program, which is why they continue to reach out to us when they need help," said Bill Gienke, Managing Director at Eliassen Group. "I am especially proud of how we collaborated with this client to prioritize and deliver a complex program that met evolving regulatory and internal requirements."

Case Study #2: End-to-End High Risk Client Review via the Enhanced Due Diligence Process To Meet Regulatory Requirements

A second global bank asked Eliassen Group for support with a different but equally difficult scenario – regulators required their wealth management division to improve its Enhanced Due Diligence (EDD) reviews of high-risk customers. After working with Eliassen Group on key risk and compliance initiatives, the client knew that Eliassen Group had financial crimes experience and could help stand up a team to work on the backlog of reviews, train team members, handle quality assurance of risk assessments, make decisions to retain or exit customers, and build a sustainable business as usual process.

Eliassen Group made a powerful impact – the client upgraded their internal audit rating of the Anti-Money Laundering (AML) within their Investment Division for the first time in several years. In addition, we achieved a 99% Quality Control pass rate, and we were recognized as a role model for other teams.

"We are in the business of becoming that trusted strategic partner building client relationships to stand the test of time because when our clients win, we all win," said Jay Gentile, Principal, Client Solutions, at Eliassen Group. "Our progressive delivery models are designed to ensure consistent, repeatable, and sustainable results across processes and teams."

Our in-depth knowledge and willingness to collaborate so we can ultimately train your team to stay on top of regulations help us stand out. Interested in hearing more? Contact us today.

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How to Do a Risk Assessment: A Case Study

Healthy , Organizational Leadership , Winning Strategy | Execution , Organizational Health Management , Risk management , Strategic planning

Christian Leadership Reflections

An exploration of Christian ministry leadership led by CCCC's CEO John Pellowe

There’s no shortage of consultants and authors to tell boards and senior leaders that risk assessment is something that should be done. Everyone knows that. But in the chronically short-staffed world of the charitable sector, who has time to do it well? It’s too easy to cross your fingers and hope disaster won’t happen to you!

If that’s you crossing your fingers, the good news is that risk assessment isn’t as complicated as it sounds, so don’t be intimidated by it. It doesn’t have to take a lot of time, and you can easily prioritize the risks and attack them a few at a time. I recently did a risk assessment for CCCC and the process of creating it was quite manageable while also being very thorough.

I’ll share my experience of creating a risk assessment so you can see how easy it is to do.

Step 1: Identify Risks

The first step is obvious – identify the risks you face. The trick is how you identify those risks. On your own, you might get locked into one way of thinking about risk, such as people suing you, so you become fixated on legal risk. But what about technological risks or funding risks or any other kind of risk?

I found a helpful way to identify the full range of risks is to address risk from three perspectives:

• Two of the mission-related risks we identified at CCCC were 1) if we gave wrong information that a member relied upon to their detriment; and 2) if a Certified member had a public scandal.
• We listed several risks to organization health for CCCC. Among them were 1) a disaster that would shut down our operations at least temporarily, and 2) a major loss from an innovation that did not work.
• We identified a risk related to the sociopolitical environment.

I began the risk assessment by reviewing CCCC from these three perspectives on my own. I scanned our theory of change, our strategy map, and our programs to identify potential risks. I then reviewed everything we had that related to organizational health, which included our Vision 2020 document (written to proactively address organizational health over the next five years),  financial trends, a consultant’s report on a member survey, and a review of our operations by an expert in Canadian associations. I also thought about our experience over the past few years and conversations I’ve had with people. Finally, I went over everything we know about our environments and did some Internet research to see what else was being said that might affect us.

With all of this information, I then answered questions such as the following:

• What assumptions have I made about current or future conditions? How valid are the assumptions?
• What are my nightmare scenarios?
• What do I avoid thinking about or just hope never happens?
• What have I heard that went wrong with other organizations like ours?
• What am I confident will never happen to us? Hubris is the downfall of many!
• What is becoming more scarce or difficult for us?

At this point, I created a draft list of about ten major risks and distributed it to my leadership team for discussion. At that meeting we added three additional risks. Since the board had asked for a report from staff for them to review and discuss at the next board meeting, we did not involve them at this point.

Step 2: Probability/Impact Assessment

Once you have the risks identified, you need to assess how significant they are in order to prioritize how you deal with them. Risks are rated on two factors:

• How likely they are to happen (That is, their Probability )
• How much of an effect could they have on your ministry (Their anticipated Impact )

Each of these two factors can be rated High , Medium , or Low . Here’s how I define those categories:

• High : The risk either occurs regularly (such as hurricanes in Florida) or something specific is brewing and becoming more significant over time, such that it could affect your ministry in the next few years.
• Medium : The risk happens from time to time each year, and someone will suffer from it (such as a fire or a burglary). You may have an elevated risk of suffering the problem or you might have just a general risk, such as everyone else has. There may also be a general trend that is not a particular problem at present but it could affect you over the longer term,
• Low : It’s possible that it could happen, but it rarely does. The risk is largely hypothetical.
• High : If the risk happened, it would be a critical life or death situation for the ministry. At the least, if you survive it would change the future of the ministry and at its worst, the ministry may not be able to recover from the damage and closure would be the only option.
• Medium : The risk would create a desperate situation requiring possibly radical solutions, but there would be a reasonable chance of recovering from the effects of the risk without long term damage.
• Low : The risk would cause an unwelcome interruption of normal activity, but the damage could be overcome with fairly routine responses. There would be no question of what to do, it would just be a matter of doing it.

I discussed my assessments of the risks with staff and then listed them in the agreed-upon priority order in six Probability/Impact combinations:

• High/High – 2 risks
• High/Medium – 1 risk
• Medium/High – 2 risks
• Medium/Medium – 3 risks
• Low/High – 3 risks
• Low/Medium – 2 risks

I felt that the combinations High/Low, Medium/Low, and Low/Low weren’t significant enough to include in the assessment. The point of prioritizing is to help you be a good steward as you allocate time and money to address the significant risks. With only thirteen risks, CCCC can address them all, but we know which ones need attention most urgently.

Step 3: Manage Risk

After you have assessed the risks your ministry faces (steps 1 and 2), you arrive at the point where you can start managing  the risks. The options for managing boil down to three strategies:

• Prevent : The risk might be avoided by changing how you do things. It may mean purchasing additional equipment or redesigning a program. In most cases, though, you probably won’t actually be able to prevent the risk from ever happening. More likely you will only be able to mitigate the risk.
• Mitigate : Mitigate means to make less severe, serious, or painful. There are two ways to mitigate risk: 1) find ways to make it less likely to happen; and 2) lessen the impact of the risk if it happens. Finding ways to mitigate risk and then implementing the plan will take up most of the time you spend on risk assessment and management. This is where you need to think creatively about possible strategies and action steps. You will also document the mitigating steps you have already taken.
• Transfer  or Eliminate : If you can’t prevent the risk from happening or mitigate the likelihood or impact of the risk, you are left with either transferring the risk to someone else (such as by purchasing insurance) or getting rid of whatever is causing the risk so that the risk is no longer applicable. For example, a church with a rock climbing wall might purchase insurance to cover the risk or it might simply take the wall down so that the risk no longer exists.

Step 4: Final Assessment

Armed with all this information, it’s time to prepare a risk report for final review by management and then the board. I’ve included a download in this post to help you write the report. It is a template document with an executive summary and then a detailed report. They are partially filled out so you can see how it is used.

After preparing your report, review it and consider whether or not the mitigating steps and recommendations are sufficient, Do you really want to eliminate some aspect of your ministry to avoid risk? Do you believe that whatever action has been recommended is satisfactory and in keeping with the ministry’s mission and values? Are there any other ways to get the same goal achieved or purpose fulfilled without attracting risk?

Finally, after all the risk assessment and risk management work has been done, the ministry is left with two choices:

• Accept whatever risk is left and get on with the ministry’s work
• Reject the remaining risk and eliminate it by getting rid of the source of the risk

Step 5: Ongoing Risk Management

On a regular basis, in keeping with the type of risk and its threat, the risk assessment and risk management plan should be reviewed to see if it is still valid. Have circumstances changed? Are the plans working? Review the plan and adjust as necessary.

Key Thought: You have to deal with risk to be a good steward, and it is not hard to do.

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The Titanic: A Case Study in Flawed Risk Management

How Poor Risk Management Sunk the Unsinkable, and Lessons Learned in Identifying Blind Spots in the Modern Threatscape

The story of the Titanic is one of the most infamous disasters in history. Yet, beyond the tragic loss of life, it serves as a compelling analogy for understanding and managing risk in today’s business environment. The ship’s demise was not due to a single failure, but rather a combination of risks — external and internal — that collectively brought about the disaster. As organizations strive to navigate the complex waters of today’s risk landscape, there is much to learn from how various factors contributed to the sinking of the Titanic.

From Luxury to Lifeboats: The Titanic’s Missteps in Risk Mitigation

Consider the following lessons the Titanic teaches about . . .

[The rest of this blog can be read on the Mitratech blog, where GRC 20/20’s Michael Rasmussen is a Guest Blogger]

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• Introduction
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Relative risks are calculated compared with mean annual PM 2.5 exposure of 10.6 μg/m 3 . Tick marks indicate distribution of exposure in the total sample; shading, 95% CI.

eTable. Frequency of Tremor-Predominant and Akinetic Rigid PD Subtypes by Average PM 2.5 Exposure Prior to PD Symptom Onset

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Krzyzanowski B , Mullan AF , Turcano P , Camerucci E , Bower JH , Savica R. Air Pollution and Parkinson Disease in a Population-Based Study. JAMA Netw Open. 2024;7(9):e2433602. doi:10.1001/jamanetworkopen.2024.33602

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Air Pollution and Parkinson Disease in a Population-Based Study

• 1 Barrow Neurological Institute, Phoenix, Arizona
• 2 Department of Neurology, Mayo Clinic, Rochester, Minnesota
• 3 Department of Neurology, University of Kansas Medical Center, Kansas City
• 4 Department of Quantitative Health Sciences, Mayo Clinic, Rochester, Minnesota

Question   Is air pollution in the form of particulate matter with a diameter of 2.5 µm or less (PM 2.5 ) and nitrogen dioxide (NO 2 ) associated with the risk and clinical characteristics of Parkinson disease (PD)?

Findings   This case-control study including 346 patients with PD matched with 4813 controls found that PM 2.5 and NO 2 exposure was associated with statistically significant increases in PD risk and risk of developing dyskinesia. Higher exposure to PM 2.5 was associated with a statistically significant increase in risk of the akinetic rigid PD subtype in subcohort analysis among patients with PD.

Meaning   These findings suggest that a reduction in air pollution may help reduce PD risk, modifying the PD phenotype and the risk of dyskinesia in patients with PD.

Importance   The role of air pollution in risk and progression of Parkinson disease (PD) is unclear.

Objective   To assess whether air pollution is associated with increased risk of PD and clinical characteristics of PD.

Design, Setting, and Participants   This population-based case-control study included patients with PD and matched controls from the Rochester Epidemiology Project from 1998 to 2015. Data were analyzed from January to June 2024.

Exposures   Mean annual exposure to particulate matter with a diameter of 2.5 µm or less (PM 2.5 ) from 1998 to 2015 and mean annual exposure to nitrogen dioxide (NO 2 ) from 2000 to 2014.

Main Outcomes and Measures   Outcomes of interest were PD risk, all-cause mortality, presence of tremor-predominant vs akinetic rigid PD, and development of dyskinesia. Models were adjusted for age, sex, race and ethnicity, year of index, and urban vs rural residence.

Results   A total of 346 patients with PD (median [IQR] age 72 [65-80] years; 216 [62.4%] male) were identified and matched on age and sex with 4813 controls (median [IQR] age, 72 [65-79] years, 2946 [61.2%] male). Greater PM 2.5 exposure was associated with increased PD risk, and this risk was greatest after restricting to populations within metropolitan cores (odds ratio [OR], 1.23; 95% CI, 1.11-1.35) for the top quintile of PM 2.5 exposure compared with the bottom quintile. Greater NO 2 exposure was also associated with increased PD risk when comparing the top quintile with the bottom quintile (OR, 1.13; 95% CI, 1.07-1.19). Air pollution was associated with a 36% increased risk of akinetic rigid presentation (OR per each 1-μg/m 3 increase in PM 2.5 , 1.36; 95% CI, 1.02-1.80). In analyses among patients with PD only, higher PM 2.5 exposure was associated with greater risk for developing dyskinesia (HR per 1-μg/m 3 increase in PM 2.5 , 1.42; 95% CI, 1.17-1.73), as was increased NO 2 exposure (HR per 1 μg/m 3 increase in NO 2 , 1.13; 95% CI, 1.06-1.19). There was no association between PM 2.5 and all-cause mortality among patients with PD.

Conclusions and Relevance   In this case-control study of air pollution and PD, higher levels of PM 2.5 and NO 2 exposure were associated with increased risk of PD; also, higher levels of PM 2.5 exposure were associated with increased risk of developing akinetic rigid PD and dyskinesia compared with patients with PD exposed to lower levels. These findings suggest that reducing air pollution may reduce risk of PD, modify the PD phenotype, and reduce risk of dyskinesia.

Parkinson disease (PD) is a degenerative disease that affects 2% of the population aged 70 years and older. 1 The number of individuals with PD within the population is estimated to triple in the next 20 years. 2 Several theories have been formulated to explain the progressive increase in the incidence of PD. Complex interactions among environmental factors, genetic predisposition, and known risk factors have been reported through the years as possible causes. 3 , 4 Among environmental exposures, studies have suggested air pollution, in the form of aerosolized particulate matter with a diameter 2.5 µm or less (PM 2.5 ), is associated with increased risk of PD. 5 - 14 The ultrafine particles (≤0.1 µm) contained within PM 2.5 may cross the blood brain barrier in humans, 15 leading to inflammation, oxidative stress, and microglia activation, which are potential pathogenic mechanisms for the development of PD. 15 - 19 At this time, there are no available national datasets on ultrafine particles contained in traffic pollution; however, ultrafine particles are traffic-related pollutants, 20 along with nitrogen dioxide (NO 2 ), for which nationwide data exist. 21 Additionally, previous studies have implicated NO 2 exposure as a PD risk factor. 22 Thus, assessing the association of PM 2.5 and NO 2 with PD may help provide insight into the roles of different sources of air pollution in PD risk. In addition to potentially increasing the risk of developing PD, we hypothesize that air pollution exposure may also be associated with phenotypical manifestations and treatment outcomes. To our knowledge, no studies have explored the association between PM 2.5 exposure and clinical phenotypes of PD. For this reason, we conducted a population-based study using data from the Rochester Epidemiology Project (REP) medical records linkage system to explore the association between PD and air pollution exposure. We also studied the association of air pollution exposure with patient mortality, different clinical characteristics, and presence of dyskinesia.

This case-control study was granted an exemption from review and informed consent by the Mayo Clinic institutional reviewer board. All patients and controls had Minnesota research authorization for use of medical records. This study is reported following the Strengthening the Reporting of Observational Studies in Epidemiology ( STROBE ) reporting guideline.

We identified patients with PD in Olmstead County, Minnesota, from 1991 to 2015 using International Classification of Diseases, Ninth Revision ( ICD-9 ) (332.0, 333.0, 331.82) and International Statistical Classification of Diseases and Related Health Problems, Tenth Revision ( ICD-10 ) (G20, G21, G23.1, G23.2, G31.83) codes within the Rochester Epidemiology Project (REP) medical records linkage system. 23 The records of all patients identified by ICD-9 and ICD-10 codes were reviewed by a movement disorder specialist (R.S.) to confirm the diagnosis of PD and determine the date of motor symptom onset. Cognitive symptoms were also reviewed for the diagnosis of PD. Details regarding the methods have been reported elsewhere. 23 Although patients with PD were required to be living in Olmsted County at diagnosis date, they were not required to have lived in Olmsted County before that date. Therefore, our analysis includes patients with PD who lived outside of Olmsted County during the exposure window of interest (10 years prior to the date of PD symptom onset), and exposures were linked based on their prior addresses.

Controls were identified from the 27-county REP region in Minnesota, Iowa, and Wisconsin. 24 Controls were screened for the same ICD-9 and ICD-10 codes for PD as were used to identify patients with PD in the case cohort. Controls were matched (using a randomly sorted greedy algorithm) to patients with PD 20:1 on sex and age within an index date that was 3 years prior to motor symptom onset for the matched patient with PD. All controls were required to not have any ICD-9 or ICD-10 codes for PD prior to the index date or up to 5 years after to ensure that no control developed PD motor symptoms. Patients with PD were divided into 2 subgroups (akinetic rigid and tremor-predominant PD subtypes) according to their most prominent feature on examination. 23 Due to a low number of patients with tremor-predominant PD in the cohort, patients presenting with rest tremor and either bradykinesia or rigidity were considered tremor predominant in the analysis.

Mean annual PM 2.5 exposure data were collected from 1998 to 2019 from the Washington University in St Louis Atmospheric Composition Analysis Group. 25 In addition, mean annual nitrogen dioxide (NO 2 ) exposure data were collected from 2000 to 2014 from the Socioeconomic Data and Application Center. 26 The PM 2.5 and NO 2 values for each patient and control were identified each year up to 10 years prior to the index date based on the 1-km 2 area containing their home address of residency each year. Patients with PD with missing data for all 10 years before the index date were excluded, along with their corresponding matched controls.

As a sensitivity analysis, we restricted our patient population to metropolitan cores. In doing so, we ensure that our cases and controls were more comparable in terms of the spectrum of pollution they might have been exposed to. Metropolitan populations were defined as those living in a Rural Urban Commuting Area (RUCA) classification of metropolitan area core (RUCA = 1).

Our primary outcome was risk of incident PD. Secondary outcomes were assessed only among patients with PD and included all-cause mortality following PD symptom onset, presence of tremor-predominant vs akinetic rigid PD, and development of dyskinesia.

We included 2 study designs: a case-control study design to assess the association of PM 2.5 exposure with incidence of PD and a cohort study design focusing on PD subtypes and outcomes (dyskinesia and mortality) within our case group. All statistical analyses were performed during the January to June 2024. P values were 2-sided, and statistical significance was set at P  ≤ .05. All analyses were conducted using R software version 4.2.2 (R Project for Statistical Computing).

In our case-control study, we modeled exposure in quintiles and using 2 linear splines, similar to prior studies of PM 2.5 . 5 The placement of the knot was determined using bootstrap sampling to maximize the area under the receiver operating characteristics curve. Logistic regression was used with PD as the outcome and PM 2.5 (or NO 2 ) as the risk factor, adjusting for age, sex, race, ethnicity, year of index, and residency RUCA. All race and ethnicity information was taken directly from categories used in medical records. The other race category was reported directly in the medical record and not otherwise defined. We adjust for demographics that are well-established risk factors of PD. We adjust for year of index to diminish the potential impact of historical cohort effects. We adjust for RUCA to diminish the impact of differences that exist between urban and rural air pollution composition profiles. We further expect that our RUCA adjustment also diminishes the impact of differences that exist between urban and rural populations regarding other toxic exposures, including prior occupational exposures. RUCA designation was categorized as metropolitan area cores (RUCA = 1) and not metropolitan area cores (RUCA = 2-10). Results were reported as odds ratios (ORs) with 95% CIs.

For our PD-specific cohort study of secondary outcomes, the risk of akinetic rigid subtype was assessed using logistic regression and the risk of all-cause mortality, and risk of dyskinesia was assessed using Cox proportional hazards regression. All models were adjusted for age, sex, race, ethnicity, and residency RUCA. Patient follow-up was censored at last available medical encounter or death, and PM 2.5 was considered as a linear risk factor per 1 μg/m 3 . Model results were reported with ORs or hazard ratios (HRs) with 95% CIs. Differences in outcome based on PM 2.5 exposure were highlighted using Kaplan-Meier cumulative incidence curves with PM 2.5 divided into tertiles for patients with PD.

Of the 450 incident cases of PD identified from Olmsted County, 9 patients (2.0%) were excluded for missing address information and 95 patients (21.1%) were excluded for missing PM 2.5 exposure data, resulting in 346 PD cases (76.9%; median [IQR] age 72 [65-80] years; 216 [62.4%] male) included for analysis, with 1 American Indian or Alaskan Native patient (0.3%), 6 Asian patients (1.7%), 5 Black or African American patients (1.4%), 1 Hawaiian or Pacific Islander patient (0.3%), 330 White patients (95.4%), and 3 patients identifying as other race (0.9%); 7 patients identified as Hispanic or Latino (2.0%) and 339 patients identified as not Hispanic or Latino (98.0%). Among 6920 controls matched to these included PD cases, 1875 (27.1%) were excluded for missing address information and 232 (3.4%) were excluded for missing PM 2.5 exposure data, for a total of 4183 controls (69.6%; median [IQR] age, 72 [65-79] years, 2946 [61.2%] male), including 9 American Indian or Alaskan Native individuals (0.2%), 49 Asian individuals (1.0%), 33 Black or African American individuals (0.7%), 1 Hawaiian or Pacific Islander individual (<0.1%), 4164 White individuals (86.5%), 69 individuals identifying as other race (1.4%), and 488 individuals with unknown or undisclosed race (10.1%); 50 individuals identified as Hispanic or Latino (1.0%) and 4278 individuals identified as not Hispanic or Latino (88.9%). The median (IQR) time lived at these the current address was 15.9 (5.0-39.8) years. Most patients with PD lived inside metropolitan area cores (79.5%) compared with approximately one-third of controls (32.7%), which is why we include our metropolitan-restricted sensitivity analysis ( Table 1 ; eTable in Supplement 1 ).

Median (IQR) PM 2.5 exposure prior to the index date was 10.07 (9.35-10.69) μg/m 3 among patients with PD and 9.44 (8.69-10.22) μg/m 3 among controls (Wilcoxon rank-sum P  < .001). There was a positive association between PM 2.5 and risk of PD: compared with the lowest quintile of PM 2.5 exposure, the increased risk of PD associated with PM 2.5 exposure ranged from 4% in the second quintile (OR, 1.04; 95% CI, 1.02-1.06) to 14% in the top quintile (OR, 1.14; 95% CI, 1.11-1.18) ( Table 2 ). The median (IQR) NO 2 exposure prior to the index date was 17.47 (15.46-19.99) μg/m 3 for patients with PD and 17.17 (14.31-19.46) μg/m 3 for controls (Wilcoxon rank-sum P  = .27). There was a positive association between NO 2 and risk of PD, but only for the top 2 quintiles of NO 2 exposure. Compared with the lowest quintile of NO 2 exposure, the odds of PD were increased by 5% in the fourth quintile (OR, 1.05; 95% CI, 1.01-1.10) and by 13% in the top quintile (OR, 1.13; 95% CI, 1.07-1.19) ( Table 2 ).

The trend in odds ratios across PM 2.5 exposure was positive and linear with some tapering at the higher levels ( Figure 1 ). This was observed in linear splines with a regression knot optimized at 10.6 μg/m 3 , with a 4.9% increase per 1-μg/m 3 increase in PM 2.5 exposure (OR per 1-μg/m 3 increase, 1.05; 95% CI, 1.04-1.06) up to the knot at 10.6 μg/m 3 and then a 1.7% increase per 1 μg/m 3 above the knot (OR, 1.02; 95% CI, 1.00-1.03). A likelihood ratio test comparing the spline model to a linear model favored the nonlinear spline for modeling risk of PD ( P  < .001).

Overall, there was a significant association between PM 2.5 exposure and the development of akinetic rigid PD ( Table 3 ). After accounting for patient age, sex, and residency RUCA classification, increased PM 2.5 exposure was associated with a 36% increased risk of akinetic rigid presentation (OR per 1-μg/m 3 increase, 1.36; 95% CI, 1.02-1.80, P  = .03). The median (IQR) annual PM 2.5 exposure for patients with tremor-predominant PD was 9.98 (9.31-10.65) μg/m 3 , compared with 10.51 (9.90-10.83) μg/m 3 for patients with akinetic rigid PD.

Among 346 patients with PD included in the study, 259 (74.9%) were deceased at the time of data abstraction, with a median (IQR) of 9.0 (6.0-11.8) years from PD symptom onset to death. After accounting for patient demographics (age, sex, race, and ethnicity) and RUCA, there was no significant association between level of PM 2.5 exposure and mortality risk (HR per 1-μg/m 3 increase, 0.93; 95% CI, 0.82-1.05; P  = .23).

A total of 54 patients with PD (15.6%) developed dyskinesia at any time during the disease course. The median (IQR) time from PD symptom onset to dyskinesia was 5.6 (4.4-7.9) years. The Kaplan-Meier cumulative incidence for dyskinesia is shown in Figure 2 , with PM 2.5 classified by tertiles (high, medium, low). After accounting for patient demographics and RUCA, each 1-μg/m 3 increase in PM 2.5 was associated with 42% greater risk for developing dyskinesia (HR, 1.42; 95% CI, 1.17-1.73; P  < .001).

Our analysis restricted to metropolitan core populations provided larger estimates compared with our primary analysis that included both metropolitan and nonmetropolitan populations ( Table 1 ). In metropolitan populations, there was a positive association between PM 2.5 exposure and PD risk. Compared with the lowest quintile of PM 2.5 exposure, metropolitan populations had 10% to 23% increased odds of PD (second quintile: OR, 1.10; 95% CI, 1.00-1.21; fifth quintile: OR, 1.23; 95% CI, 1.11-1.35) ( Table 2 ). However, our metropolitan-restricted analysis of dyskinesia (274 patients with PD; 37 dyskinesia events) found a lower risk compared with the analysis that included both metropolitan and nonmetropolitan populations. Specifically, we found that each 1-μg/m 3 increase in PM 2.5 was associated with 35% greater risk for dyskinesia (HR, 1.35; 95% CI, 1.06-1.72; P  = .01) after accounting for patient demographics.

In this population-based case-control study, PM 2.5 exposure was associated with an increased risk of developing PD, particularly the akinetic-rigid phenotype, and risk was higher with increasing PM 2.5 levels. Exposure to NO 2 was also associated with an increased risk of developing PD. Additionally, higher levels of PM 2.5 and NO 2 were associated with an increased risk of developing dyskinesia following the onset of PD. Contrary to our hypothesis and prior research, 27 PD mortality was not associated with PM 2.5 exposure. We speculate that patients with PD in our study area may have better access to medical care compared to individuals with PD in the general population.

Several studies have reported an association between PM 2.5 exposure and adverse neurological outcomes. 5 , 28 , 29 The ultrafine particles (≤0.1 µm) contained within PM 2.5 cross the blood brain barrier, 15 and PM 2.5 in particular has been reported to be associated with inflammation, oxidative stress, and microglia activation, which are potential pathogenic mechanisms for the development of PD. 15 - 19 Moreover, studies have demonstrated that higher levels of PM 2.5 result in greater neurotoxic effects. 30 Similar to other studies, 5 , 6 , 11 , 31 , 32 we observed that the association between PM 2.5 and PD risk tapered off at the highest levels of PM 2.5 . The reason for this plateauing remains unclear; however, some researchers have suggested that differences in PM 2.5 composition in high-PM 2.5 and low-PM 2.5 regions may account for these findings . 5 Specifically, PM 2.5 composition may be more heterogeneous in regions with the relatively high PM 2.5 , making PM 2.5 alone a less reliable indicator of exposure to specific neurotoxic subcomponents in those regions. Nevertheless, we also acknowledge the possibility that the observed ceiling effect might be tied to a potential biological limit on the mechanisms of neuronal damage occurring in individuals chronically exposed to higher levels of PM 2.5 .

It is possible that PM 2.5 may have varied effects on the development and progression of neurodegenerative disease based on its composition. A multicountry study in Europe confirmed the importance of considering the subcomponents of PM 2.5 . 7 In our study, we were unable to explore broader ranges of PM 2.5 , since the range of PM 2.5 in our study area (parts of Minnesota, Wisconsin, and Iowa) was relatively small compared with the range of PM 2.5 observed nationwide. However, a 2022 study 33 identified notable geographical variation of PM 2.5 subcomponents in the Midwest, finding a north-south gradient in PM 2.5 , nitrite, and organic carbon composition, as well as an inverse gradient of sulfate composition. Additionally, the detected association with NO 2 and the larger effect size observed in metropolitan core populations suggest the possibility that the PM 2.5 association may be driven by traffic-related particulates. Unfortunately, without complete information of prior toxic exposures, we are limited in our ability to draw causal conclusions.

Importantly, in 2024, the US Environmental Protection Agency reduced the annual PM 2.5 standard from 12 μg/m 3 to 9 μg/m 3 due to growing evidence of negative health effects at levels below the previously set standard. 34 Our study not only supports the findings that led to this change, but suggests that the upper limit should be lowered to 8 μg/m 3 —a level previously advocated for by the American Lung Association and other health organizations. Notably, the World Health Organization recommends a more stringent limit than this, setting their standard to 5 μg/m 3 . 35

Individuals with PD who were exposed to higher levels of PM 2.5 were more likely to develop the akinetic rigid subtype of PD. Bradykinesia and rigidity are the predominant findings in these individuals, and this subtype has been linked to faster disease progression. Studies suggest that akinesia and resting tremor may result from different neurobiological processes, with the former resulting from both tonic (sustained) and phasic (intermittent) dopamine levels, and the latter from tonic release of dopamine and dopamine receptor responsiveness. 36 We speculate that these differences may result from differences in PM 2.5 subcomponents and subfractions. Interestingly, similar findings have been reported when using the neurotoxin 1-methyl-4-phenyl-1,2,3,6-tetrahydropyridine (MPTP) as a model for PD. 37 Indeed, MPTP has been shown to produce both phasic and tonic dopamine dysregulation in the basal ganglia. 38 - 40 In humans, MPTP can produce all major Parkinsonian symptoms, including akinesia and rest tremor; however, in many primate models, MPTP produces akinesia and rigidity without low-frequency tremor. 41 Although MPTP is not found naturally in the environment, it is often referenced when exploring the role of environmental toxins that might cause neurodegeneration by a mechanism similar to MPTP. 42 Thus our finding that PM 2.5 exposure was associated with greater risk of the akinetic rigid PD subtype aligns with the possible evidence of a different clinical manifestations of the disease secondary to an external neurotoxin exposures (MPTP). 41 This work provides insight into the role of PM 2.5 exposure in the development of the different PD phenotypes. Furthermore, our study may offer a new explanation for the onset of dyskinesias that is not solely based on patient demographics, genetics, clinical characteristics, or drug response. 43 - 46 In fact, it possible that environmental factors may lead to an increased risk of developing dyskinesia.

Our study has several strengths. First, we used population-based incidence data, which allows us to better answer questions of PD etiology. Second, rather than relying on ICD-9 and ICD-10 codes alone, all identified cases were screened by a movement disorder specialist to confirm diagnosis of PD. Third, we used address-level data to assign exposure, which is a stronger proxy for patient-level PM 2.5 exposure compared with less precise geographies (eg, zip codes or census tracts). Fourth, our REP data also allowed us to assign PM 2.5 and NO 2 exposure based on multiple years of address information for each patient, meaning that we were able to follow our patients forward through time.

This study also has some limitations. Our population-based dataset had a limited geographical extent. However, the REP captures data from patients for all health systems within our study area, making it a comprehensive population-based dataset. 24 Our study was limited in that the REP population is predominantly White, given the demographics of the study region; however, our results reflect what other studies have found using diverse cohorts, including the nationwide Medicare population. 5 We acknowledge that in our subtype analysis of PD cases, the distribution of PM 2.5 among our PD cases was relatively small. Additionally, we were unable to adjust for all additional clinical characteristics associated with dyskinesia (eg, body weight, disease severity, and levodopa treatment). We did not have information on occupational history, work address, or activity space information; therefore, our results may be vulnerable to exposure misclassification errors (eg, for patients who spend more time at locations other than their home address). Long-term neurotoxic exposures are likely key in PD development. Due to the long prodromal period of PD, 47 we used PM 2.5 estimates for up to 10 years prior to symptom onset date. The relevant exposure window may extend back further, but PM 2.5 estimates prior to 1998 are unavailable. Additionally, a limitation of many epidemiological studies is the use of clinical criteria that do not necessarily correlate with pathology findings and, usually, do not consider the presence of copathology. Importantly, it is possible that the toxicant role of PM 2.5 may interfere with a change in the pathology cascade. On the other hand, we previously reported an clinicopathology concordance of 86.7% synucleoinopathies, supporting our case identification and classiffication. 48

This population-based case-control study provides evidence in support of an association of PM 2.5 and NO 2 exposure with the risk of developing PD. Higher levels of PM 2.5 exposure were associated with increased risk of developing akinetic rigid disease and dyskinesias compared with lower levels of exposure. These findings suggest that a reduction in PM 2.5 may help reduce the risk of PD and affect the clinical profile of PD and disease complications (modifying the PD phenotype and the risk of dyskinesia in patients with PD).

Accepted for Publication: July 19, 2024.

Published: September 16, 2024. doi:10.1001/jamanetworkopen.2024.33602

Open Access: This is an open access article distributed under the terms of the CC-BY License . © 2024 Krzyzanowski B et al. JAMA Network Open .

Corresponding Author: Brittany Krzyzanowski, PhD, Barrow Neurological Institute, 240 W Thomas Rd, Phoenix, AZ 85013 ( [email protected] ); Rodolfo Savica MD, PhD, Department of Neurology, Mayo Clinic, 200 First St SW, Rochester, MN 55905 ( [email protected] ).

Author Contributions: Drs Krzyzanowski and Mullan had full access to all of the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

Concept and design: Krzyzanowski, Mullan, Savica.

Acquisition, analysis, or interpretation of data: Krzyzanowski, Mullan, Turcano, Camerucci, Bower.

Drafting of the manuscript: Krzyzanowski, Mullan, Savica.

Critical review of the manuscript for important intellectual content: All authors.

Statistical analysis: Krzyzanowski, Mullan, Savica.

Administrative, technical, or material support: Mullan.

Supervision: Turcano, Camerucci, Bower, Savica.

Conflict of Interest Disclosures: Dr Savica reported receiving support from the National Institute on Aging, the National Institute of Neurological Disorders and Stroke, the Parkinson’s Disease Foundation, Acadia Pharmaceuticals, and Michael J. Fox Foundation outside the submitted work.

Data Sharing Statement: See Supplement 2 .

Additional Contributions: We thank the staff of Neuroscience Publications at Barrow Neurological Institute for assistance with manuscript preparation.

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Back to Journals » Risk Management and Healthcare Policy » Volume 17

Risk Factors and Profiles of Falls Among Inpatients in Vietnam: A Multicenter Nested Case–Control Study

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Authors Nguyen LT   , To KG , Tang TC , Pham TN , Thanh LBN , Thai TT  

Received 2 April 2024

Accepted for publication 11 September 2024

Published 18 September 2024 Volume 2024:17 Pages 2229—2239

DOI https://doi.org/10.2147/RMHP.S471895

Checked for plagiarism Yes

Review by Single anonymous peer review

Peer reviewer comments 2

Editor who approved publication: Dr Jongwha Chang

Luan Thanh Nguyen, 1 Kien Gia To, 1 Thuong Chi Tang, 2 Tuan Nhat Pham, 1 Long Bui Nguyen Thanh, 2 Truc Thanh Thai 1 1 University of Medicine and Pharmacy at Ho Chi Minh City, Ho Chi Minh City, 700000, Vietnam; 2 Ho Chi Minh City Department of Health, Ho Chi Minh City, 700000, Vietnam Correspondence: Truc Thanh Thai, Faculty of Public Health, University of Medicine and Pharmacy at Ho Chi Minh City, Ho Chi Minh City, 700000, Vietnam, Tel +84908381266, Email [email protected] Purpose: Falls among inpatients represent a significant global health concern and are among the leading causes of accidental death. However, hospital falls are context- and population dependent. This study aimed to investigate the risk factors contributing to falls and the fall profiles among Vietnamese inpatients. Methods: A nested case–control study was conducted at nine public hospitals in Ho Chi Minh City. For every fall identified through the medical fall incident reporting system, four controls (ie, nonfall patients) were also selected from medical records within the same department and timeframe. Medical records were extracted, which included detailed information about the falls. Results: Among 101 fall cases and 404 nonfall controls, several risk factors for falls were found, including reduced strength and mobility (OR=3.08, 95% 1.30– 7.30), nocturia (OR=9.08, 95% CI 4.04– 20.45), having more than two diseases (OR=2.76, 95% CI 1.53– 4.98), using walking aids (OR=23.26, 95% CI 10.20– 53.03), using medical devices (OR=3.44, 95% CI 1.92– 6.15) and using antiepileptics (OR=3.94, 95% CI 1.22– 12.77). About 19.8% of the falls occurred within the first 24 hours from admission and the most common time of falls was from 0:00 am to 5:59 am (44.6%). The patient bed and bathroom were the most frequent locations for falls, accounting for 44.55% and 37.62% of the cases, respectively. More than 40% of the falls occurred when the patients were with their personal caregivers. Conclusion: Although intervention programs can use these risk factors to target those who have a high risk of falling, to optimize resources, such programs should consider the fall patterns found in our study. Keywords: falls, associated factors, inpatients, profile, Vietnam

Introduction

Falls represent a significant global health concern and are the second leading cause of accidental death worldwide. Annually, approximately 684,000 individuals die due to injuries from falls, with 80% of these fatalities occurring in low- and middle-income countries, especially prevalent in the Western Pacific and Southeast Asian regions. 1 This alarming statistic underscores a critical global health disparity and emphasizes the need for targeted fall prevention strategies in these regions.

Hospital falls, a subset of this broader issue, merit particular attention. Recognized by the Joint Commission International as one of the six pivotal areas necessitating proactive prevention, hospital falls are not merely accidents. 2 Instead, they are often indicative of broader systemic issues within healthcare facilities. In the United States, falls are the third leading cause of hospital-related incidents. The Agency for Healthcare Research and Quality reports an estimated 700,000–1,000,000 hospital fall incidents annually. 3 This trend is mirrored in the United Kingdom, where the National Health Service records nearly 209,000 reported fall cases in hospitals yearly, with approximately 61,000 cases resulting in varying degrees of injury. Importantly, falls are the principal cause of injury-related hospital admissions among individuals over 65 years old, incurring significant costs of about 2.3 billion pounds annually. 4 This demographic trend highlights the vulnerability of the aging population and the consequential strain on healthcare resources.

Although Vietnam, along with countries like Cambodia, Indonesia, and Myanmar, has some of the highest mortality-to-incidence ratios for falls in Southeast Asia, 5 fall-related data in the country, especially within healthcare facilities, are notably scarce. One plausible explanation is that medical incidents, particularly falls, are sensitive issues that have the potential to impact the reputation and credibility of healthcare facilities. Consequently, it is not that data on falls is entirely absent, but rather that healthcare facilities may be reluctant to disclose or report such data. An estimate of about 1.5–1.9 million people over 65 years old experience falls annually in the community, but the incidence rate in healthcare settings remains largely unquantified. Despite the Ministry of Health recognizing falls as a critical patient safety issue, more intensive research on fall prevention within the hospital management paradigm in Vietnam is needed.

Failure to study fall risk factors and fall descriptions can lead to increased morbidity, mortality, and healthcare costs, particularly among vulnerable populations like older adults and stroke survivors. Moreover, without a clear understanding of these risk factors, healthcare systems, especially in low- and middle-income regions like Southeast Asia, may become overwhelmed by the growing burden of fall-related injuries. 5 In contrast, in-depth knowledge about falls can support the development of effective, tailored interventions, which could prevent falls and improve quality of life. Moreover, as the characteristics and contributing factors of falls may vary across different settings and populations, it is crucial to expand research in diverse environments and prioritize the development of effective fall prevention strategies tailored to these specific contexts. 6 Therefore, this study aimed to investigate the risk factors contributing to falls and the fall profiles among Vietnamese inpatients. This research seeks to fill a crucial gap in the existing literature and contribute to the formulation of effective fall prevention strategies within the Vietnamese healthcare context and other similar settings.

Materials and Methods

Setting and participants.

A multicenter nested case–control study was conducted by selecting fall and non-fall cases at multiple hospitals, with retrospective data collection from medical records. This study was conducted at nine public general hospitals in Ho Chi Minh City, Vietnam. The selection encompassed a diverse range of hospital types to ensure a comprehensive representation of the healthcare landscape in the city. This included one University hospital, renowned for its academic and research focus; two tertiary hospitals operating under the direct supervision of the Ministry of Health, known for their high patient influx and complex case profiles; five city hospitals governed by the Department of Health, reflecting the more typical healthcare settings in the city; and one military hospital under the Ministry of Defense, providing insights into the healthcare services for military personnel and their families. These hospitals collectively represent nearly half of the public general hospitals in Ho Chi Minh City and thus our multicenter approach was to improve representativeness and generalizability of the study findings.

This study focused on inpatients over 18 years old admitted to the selected hospitals between January 1, 2019, and December 31, 2022. Patients admitted to obstetrics, pediatrics, or psychiatric departments were excluded because of the unique nature of these departments, where patients are generally at an extremely lower risk of falls because of the high level of care and monitoring they receive. In addition, the obstetrics and pediatrics departments have specific dynamics and risk factors that might skew the general understanding of fall incidents in general hospital settings.

Study Procedures

All patient data were extracted from medical records. This study was reviewed and approved by the Institutional Ethics Committees of the University Medical Center at Ho Chi Minh City. Because of the retrospective nature of this study and that data collection was only based on electronic medical records, written informed consent was waived. The data were anonymized and maintained with confidentiality in accordance with the Declaration of Helsinki.

Measurements

Variables included demographic characteristics, health status, pathological features, and medication usage. Demographic characteristics of the patients encompassed variables such as gender, age, presence of a caregiver during hospitalization, and body mass index (BMI). The BMI of patients was calculated using their weight and height, based on the formula: BMI = weight (kg) / height (m 2 ). The BMI was classified according to the standards of IDI and WPRO, with underweight defined as a BMI <18.5 and overweight or obese as a BMI ≥ 23. Based on a meta-analysis of 32 cohort studies, 9 the BMI classification for patients over 65 years old included underweight (BMI < 23), normal (BMI 24–30), and overweight (BMI > 30). Variables such as history of falls, hypertension, limitations/disorders in mobility, and frequent nocturia were recorded based on patient information at the time of hospital admission. Hypertension was defined as having a systolic blood pressure (SBP) of 140 mmHg or higher or a diastolic blood pressure (DBP) of 90 mmHg or higher. Information about limitations/disorders in mobility was recorded based on observations and assessments by healthcare staff when evaluating the risk of falls for patients. For pathological and medication usage features, we collected information closest to the time of fall occurrence. The pathological characteristics were recorded as per the physician’s notes in the treatment sheet of the medical record, including variables such as pathological condition at admission, comorbidities, surgical indications, use of mobility aids, use of accompanying medical devices, restricted mobility indications, bed bath indications, and physical therapy indications. Regarding medication information, we also based our data on prescribed medication. Drug groups related to falls included anticonvulsants, antidepressants, sedatives, addictive substances, diabetic drugs, and diuretics. The degree of injury of all cases was recorded and classified into almost no, mild, moderate, and severe based on guidelines from Vietnam Ministry of Health. 10

Data Analysis

The statistical analysis was conducted using Pearson’s Chi-squared tests and Fisher’s exact tests to compare the differences in qualitative variables between the two groups. For quantitative variables, t -tests and Mann–Whitney tests were used when appropriate. Univariate and multiple logistic regression analysis was used to identify independent risk factors. Statistically significant variables from univariate analysis (ie p-value < 0.05) were entered in multiple logistic regression. The final model was fitted based on guidelines provided by Kleinbaum et al. 11 The results of logistic regression were reported in the form of Odds Ratio (OR) and its 95% confidence interval. All data analyses were conducted using Stata version 17.

Risk Factors of Falls Among Inpatients

Profiles of Falls Among Inpatients

Our study is among the first to identify risk factors and profiles of fall cases among inpatients across multiple hospitals in Vietnam. In the search for risk factors of falls, in addition to demographic characteristics, potential risk factors reported in previous studies were also included such as health status, pathological characteristics and medication use. Among these, we found that falls were associated with reduced strength and mobility, nocturia, having more than two diseases, using walking aids, using medical devices, and using antiepileptics. We also found the pattern of falls among inpatients.

Regarding health status, consistent with other studies, we also found decreased mobility function and nocturia associated with falls among inpatients. 12–15 Decreased mobility function increases the risk of falls through a series of impacts related to muscle health and balance maintenance. As muscle strength diminishes, patients encounter difficulties maintaining stability while standing or moving, leading to a higher risk of imbalance. This reduction in mobility also affects the ability to coordinate movements, making it challenging to adjust body position as needed, and may even cause issues in quickly responding to sudden changes in the environment, such as avoiding obstacles, thereby increasing the risk of falls. Similarly, nocturia and urinary frequency increase the risk of falls by necessitating patients to wake up and move to the bathroom multiple times, especially at night. In darkness or dim light, reduced visibility combined with fatigue and sleepiness can decrease reflexes and alertness, leading to a higher risk of tripping or slipping. Furthermore, the need to move quickly can increase the risk of imbalance, especially when patients try to avoid disturbing others at night or to reach the bathroom in time. Therefore, nocturia and urinary frequency not only cause inconvenience but also pose a hidden risk of serious fall-related issues, particularly in the unsafe environments of some hospitals. Our finding underscores the critical role of addressing underlying health issues in fall prevention strategies, as impaired physical functioning and frequent movement, particularly at night, significantly exacerbate fall risks.

Regarding pathological conditions, as expected, individuals with two or more diseases and those using walking aids or medical devices had increased fall risks. Multimorbidity is a well-documented factor that impairs physical functioning and reduces balance, making patients more susceptible to falls. 16 , 17 The use of walking aids or medical devices, while necessary for mobility, introduces additional challenges, such as difficulty navigating narrow spaces or uneven surfaces, which increases dependence on hospital infrastructure. For some patients, these conditions are unavoidable and thus, fall prevention relies strongly on the available infrastructure at hospitals. However, due to the inadequate physical infrastructure in some hospitals in Vietnam, these conditions among inpatients can easily result in tripping hazards during patient movement. This finding emphasizes the urgent need for personalized fall-prevention strategies, especially for patients with multimorbidity or those who rely on walking aids or medical devices.

Moreover, a large body of literature indicates that medication use also significantly impacts fall risks. Previous studies suggest that sedatives and antidepressants increase the risk of falls in patients. 18 Many studies have indicated that medications such as anticholinergics and central nervous system drugs (including anxiolytics, hypnotics, sedatives, antipsychotics, opioids, antiepileptics, and antidepressants) can cause inpatient fall incidents. 12–14 , 19–22 Medication side effects, such as orthostatic hypotension from antihypertensive drugs or hypoglycemia from diabetes medications, also increase fall risk. In our study, the use of antiepileptics was significantly associated with patient falls. This finding suggests the importance of regular medication reviews, especially for those who had a high risk of fall. Adjusting dosages, exploring alternative treatments and close supervision could help mitigate the risks associated with these drugs.

Understanding the differences in associated factors of falls across various settings and populations is essential for developing targeted and effective interventions. For instance, while numerous studies have identified gender as a significant risk factor for falls, 21 , 23 our study did not find a statistically significant association between gender and the likelihood of falling. This discrepancy may be attributed to differences in the health conditions, physical activity levels, as well as gender-related cultural factors that influence risk differently. However, our finding is consistent with studies conducted in Switzerland and Norway, where gender was also not seen as a major risk factor for falls. 21 , 22 Similarly, although advanced age (ie ≥65 years) is widely recognized as a significant predictor of falls due to physical decline, balance issues, and the prevalence of chronic health conditions, 17 , 21 , 24 , 25 our study did not find a statistically significant association between advanced age and fall risk. This may be due to the influence of other factors, such as overall functional ability, comorbidities, or the use of assistive devices, which could have played a more prominent role in fall outcomes. These differences suggest that while some factors, such as age and gender, are important in one context, they may not be decisive predictors of fall risk in all populations, underscoring the need for more comprehensive and context-specific approaches to fall prevention. 5 , 6

In addition to identifying risk factors of falls, it is extremely important to understand the patterns of falls to optimize the resources and to target prevention. For example, in our study, although patients with more than two diseases were at a significantly higher risk of fall, it is unknown from that finding where and when the falls would occur. In resource-limited settings such as Vietnam, it is impossible to monitor patients all the time. In our study, a significant proportion of falls occurred within 48 hours after hospital admission. In clinical practice, fall risk assessments are conducted at the time of hospital admission, but are not re-evaluated after the patient undergoes medical examination and is prescribed treatment. It is highly probable that the patient’s risk factors may have increased during this period, and the absence of subsequent assessments means that preventive and supportive measures are not implemented, leading to an elevated fall risk. Moreover, most falls in our study occurred from midnight to early morning. This period is characterized by limited lighting conditions in patient rooms, restricting visibility and posing challenges for moving patients, especially for restroom use. Furthermore, the bedside and restroom areas are high risk locations for patient falls. In Vietnam, restroom facilities often lack safety measures, with the absence of handrails to assist patients in standing, sitting, or leaning, contributing to falls. Wet floors in restrooms are also a contributing factor. Due to budget constraints, most hospital beds are not equipped with height-adjustable features, making it difficult for patients, particularly those of shorter stature, to get on and off the bed. In addition, the bed design often lacks protective side rails, increasing the risk of patients rolling off. These findings align with similar research conducted by other authors globally. 25–27

In some healthcare systems globally, having a personal caregiver continuously providing care and support during a patient’s hospital stay is rare. However, this practice is common in Vietnam, where patients are often cared for by several family members. This phenomenon is partly related to Vietnamese culture, but primarily due to a shortage of healthcare staff in Vietnam, which compromises the provision of comprehensive care for patients. Typically, a patient will have one primary caregiver present during the morning and another taking over, usually during the night. Interestingly, in our study, among 101 fall incidents, the majority occurred between 0:00 am and 5:59 am (44.6%) with the presence of a caregiver (42.6%). This result raises significant concerns regarding caregiver’s capability and support. Health education for patients’ caregivers is a mandatory activity in Vietnamese hospitals, covering from basic assistance such as mobility support, bathing, and dressing, to specific activities such as fall prevention, all communicated by hospital staff to family members in various forms. However, health education is typically conducted only once at the time of admission and for the primary caregiver only. The responsibility of disseminating this information to subsequent caregivers depends on whether the primary caregiver shares it, not on hospital staff. Therefore, based on the study’s findings, we also recommend changes in health education for family members, with particular attention to secondary caregivers.

Another important finding from our study is that 32.7% of patients were initially assessed as low fall risk upon hospital admission but eventually experienced falls, while 49.5% assessed as high risk failed to avoid fall. One possible explanation for this is the use of risk assessment tools. Commonly used adult fall risk assessment tools in Vietnam, such as the Morse and Johns Hopkins scales, have been validated and are widely applied globally. However, these tools were developed based on patient populations and healthcare systems that differ from Vietnam’s and thus may not fully capture specific factors pertinent to Vietnamese patients, with caregivers being one example. Additionally, competency in risk assessment is another issue, as most assessments in hospitals are conducted by nursing staff who may lack specialized knowledge in certain medical conditions and medication, potentially affecting the accuracy of results. The occurrence of falls among high-risk individuals underscores the limitations in the effective implementation of preventive measures and programs in Vietnamese healthcare settings. Current programs mainly focus on health education, while specific intervention measures such as installing handrails in bathrooms, providing beds with suitable guardrails and adjustable heights, or supplying appropriate clothing and footwear for patients are often overlooked and underemphasized. Moreover, the subjective attitudes of patients and the embarrassment associated with receiving assistance for personal tasks, especially from caregivers of the opposite sex, can also hinder intervention programs and increase fall risk. Based on the issues raised, our study proposes the need to develop a fall risk assessment tool specifically tailored for Vietnamese patients and aligned with the professional competencies of nursing evaluators.

Several implications were found in our study. First, as risk factors of fall are context sensitive depending on multiple features of healthcare such as facility, patient condition, the identification of such risk factors should also be specific to population and context. While the risk factors found in our study should be used to identify those who are likely to fall, we encourage further studies in various settings and populations to optimize intervention and prevention. Second, in addition to identifying risk factors, the characteristics of every fall should be recorded and synthesized to understand the pattern of falls and thus target prevention and intervention. Third, health education alone, even for patients and caregivers might not be sufficient. Instead, systematic reform of health care system focusing more on infrastructure, might be more beneficial. However, in a resource limited setting such as Vietnam, such reform would pose more burden and challenge to the health care system.

Although our study is the first in Vietnam to systematically investigate patient falls in hospitals, there are still several limitations. First, the data used in this study were from medical records or the existing fall reporting system at each study hospital. This approach might introduce biases due to potential negative consequences for healthcare workers, as fall incidents could reflect on their performance or care quality. Second, our study primarily focused on the physical factors of patients and did not investigate their knowledge, attitudes, and behaviors towards fall prevention, especially when they identified themselves at high or low risk. These characteristics may also be important risk factors for fall. In addition, variation in intervention measures across different hospitals could influence outcomes. Due to the many variations at the study hospital, we did not add these in the data analysis. These limitations should be considered when interpreting our study results when conducting future studies.

In our study, several risk factors for fall among Vietnamese inpatients were found, including reduced strength and mobility, nocturia, having more than two diseases, use walking aids or medical devices and using antiepileptics. The fall profile provides critical insights, with most of falls occurring within the first 48 hours of admission, primarily during nighttime (from 0:00 am to 5:59 am), and most frequently in the patient's bed or restroom. These patterns highlight key periods and locations where targeted prevention efforts should be concentrated. Although intervention programs can use these risk factors to target those who have a high-risk profile for fall, to optimize resources, such programs should consider the fall pattern found in our study. As fall among inpatients depends significantly on the context and populations, more studies are needed to tailor interventions.

Data Sharing Statement

Collected and analyzed data during the study are available from the corresponding author upon reasonable request.

Acknowledgment

The authors would like to thank all hospitals that participated in this study.

This study received financial support from the University of Medicine and Pharmacy at Ho Chi Minh City through Institutional Grant Theme.

The authors declare that they have no conflicts of interest in this work.

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Economics of Circumfauna: A Fashion Case Study

• First Online: 18 September 2024

Cite this chapter

• Joshua Katcher 4 &
• Tracey Katof 4  

This chapter explores “circumfauna,” the macroeconomic concept describing the growing shift across multiple industries toward bypassing animal inputs. Applying a political economy analysis, we use the global fashion industry as a case study to present the evidence of this phenomenon. We draw upon both historical and contemporary sources to understand the macro changes and economic incentives that are influencing firms to rethink the use of animals in production. We argue that the use of the term “circumfauna” can facilitate more transparent production strategies as it encompasses the vast and varied reasons for animals being removed from commodity chains. We emphasize the importance of distinguishing circumfauna from other terms, such as “vegan” and “cruelty-free,” as a trend that does not necessarily carry ethical or moral implications. We find that recent large-scale moves toward circumfauna production are broadly driven by motives to increase profits and mitigate risks. The chapter concludes by examining how economics, at its core, is a political argument, thereby challenging the assumption of economic inevitability and advocating for economic analysis that centers on profit and power. While circumfaunal innovation and processes are not immune to greenwashing or commodity fetishism, the continued trend of removing animals from supply chains can be symbiotic with efforts to create more equitable and sustainable global production networks.

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MII defines “next-gen materials” as animal-free, direct replacements for conventional animal-based leather, silk, down, fur, wool, and exotic skins. These replacements use a variety of biomimicry approaches to replicate the aesthetics and performance of their animal-based counterparts. We note that “next-gen” can be confusing due to its use in other contexts such as technology, automotive, healthcare, forest conservation, energy and even gaming. MII’s use of next-gen falls under the broader concept of circumfauna; an economic phenomenon at works both inside of and beyond the fashion context, with no technological preferences, only the intention to bypass animal inputs.

One of the most famous economic references is from Adam Smith, the “father” of mainstream economics, who offers the imagery of an invisible hand to signify the all-knowing force that creates a perfect market-place.

“Supply chains are mechanisms to coordinate and combine capital’s diverse commodification strategies not simply ‘in’ space but through the production of uneven development” (Werner, 2022 , p. 241; Smith, 2008 [1984], p. 134).

Labor-value commodity chains as a framework incorporates “an examination of the extraction of surplus from the Global South within a Marxist perspective” (Suwandi et al., 2019 , p. 32).

“Production network analysis speaks to the patterned and contingent geographies of global capitalism” (Werner, 2022 , p. 241).

Fashion buyers choose the products that are sold in stores.

We also believe that preserving and promoting biodiversity will become a main driving force in this context (Oxford Analytica, 2023).

The following are only a few of the strides that have been made for animals in the courtroom: New Zealand (2015), the United Kingdom (2021), and Spain (2021) recognized animals as sentient beings. In 2019, The Swiss government was first to vote on banning factory farming (a milestone and threat to animal agriculture even though it did not pass). In 2021, animals were recognized as legal persons for the first time in US court. Several countries have made moves to decrease or eliminate animal testing, include the US EPA in 2019; and The Nonhuman Rights Project (NhRP) secured the world’s first habeas corpus hearings on behalf of nonhuman animals in chimpanzee and elephant rights cases.

Karl Marx’s ‘commodity fetishism’ represents the alienation of social relations within a capitalist society. Value is perceived to be from objects and commodities themselves rather than from the labor that created them.

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AI tool cuts unexpected deaths in hospital by 26%, Canadian study finds

Researchers say early warning system, launched in 2020 at st. michael's hospital, is 'saving lives'.

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Inside a bustling unit at St. Michael's Hospital in downtown Toronto, one of Shirley Bell's patients was suffering from a cat bite and a fever, but otherwise appeared fine — until an alert from an AI-based early warning system showed he was sicker than he seemed.

While the nursing team usually checked blood work around noon, the technology flagged incoming results several hours beforehand. That warning showed the patient's white blood cell count was "really, really high," recalled Bell, the clinical nurse educator for the hospital's general medicine program.

The cause turned out to be cellulitis, a bacterial skin infection. Without prompt treatment, it can lead to extensive tissue damage, amputations and even death. Bell said the patient was given antibiotics quickly to avoid those worst-case scenarios, in large part thanks to the team's in-house AI technology, dubbed Chartwatch.

"There's lots and lots of other scenarios where patients' conditions are flagged earlier, and the nurse is alerted earlier, and interventions are put in earlier," she said. "It's not replacing the nurse at the bedside; it's actually enhancing your nursing care."

A year-and-a-half-long study on Chartwatch, published Monday in the Canadian Medical Association Journal, found that use of the AI system led to a striking 26 per cent drop in the number of unexpected deaths among hospitalized patients.

"We're glad to see that we're saving lives," said co-author Dr. Muhammad Mamdani, vice-president of data science and advanced analytics at Unity Health Toronto and director of the University of Toronto Temerty Faculty of Medicine Centre for AI Research and Education in Medicine. 

'A promising sign'

The research team looked at more than 13,000 admissions to St. Michael's general internal medicine ward — an 84-bed unit caring for some of the hospital's most complex patients — to compare the impact of the tool among that patient population to thousands of admissions into other subspecialty units. 

• This northern Ontario company is using AI to reduce paperwork at doctors' offices

"At the same time period in the other units in our hospital that were not using Chartwatch, we did not see a change in these unexpected deaths," said lead author Dr. Amol Verma, a clinician-scientist at St. Michael's, one of three Unity Health Toronto hospital network sites, and Temerty professor of AI research and education in medicine at University of Toronto. 

"That was a promising sign."

• AI will be critical for the future of rural health care in Canada, experts say

The Unity Health AI team started developing Chartwatch back in 2017, based on suggestions from staff that predicting deaths or serious illness could be key areas where machine learning could make a positive difference.

The technology underwent several years of rigorous development and testing before it was deployed in October 2020, Verma said.

"Chartwatch measures about 100 inputs from [a patient's] medical record that are currently routinely gathered in the process of delivering care," he explained. "So a patient's vital signs, their heart rate, their blood pressure … all of the lab test results that are done every day."

Working in the background alongside clinical teams, the tool monitors any changes in someone's medical record "and makes a dynamic prediction every hour about whether that patient is likely to deteriorate in the future," Verma told CBC News.

• AI shows major promise in breast cancer detection, new studies suggest

That could mean someone getting sicker, or requiring intensive care, or even being on the brink of death, giving doctors and nurses a chance to intervene. 

In some cases, those interventions involve escalating someone's level of treatment to save their life, or providing early palliative care in situations where patients can't be rescued. 

In either case, the researchers said, Chartwatch appears to complement clinicians' own judgment and leads to better outcomes for fragile patients, helping to avoid more sudden and potentially preventable deaths.

AI on the rise in health care

Beyond its uses in medicine, artificial intelligence is getting plenty of buzz — and blowback — in recent years. 

From controversy around the use of machine learning software to crank out academic essays, to concerns over AI's capacity to create realistic audio and video content mimicking real celebrities, politicians, or average citizens, there have been plenty of reasons to be cautious about this emerging technology.

• Canadian researchers use AI to find a possible treatment for bacteria superbug

Verma himself said he's long been wary. But in health care, he stressed, these tools have immense potential to combat the staff shortages plaguing Canada's health-care system by supplementing traditional bedside care.

How AI could change the future of our health care

It's still the early days for many of those efforts. Various research teams, including private companies, are exploring ways to use AI for earlier cancer detection. Some studies suggest it has potential for flagging hypertension just by listening to someone's voice; others show it could scan brain patterns to detect signs of a concussion .

• From virtual care apps to AI algorithms: the trouble with data collection in healthcare

Chartwatch is notable, Verma stressed, because of its success in keeping actual patients alive.

"Very few AI technologies have actually been implemented into clinical settings yet. This is, to our knowledge, one of the first in Canada that has actually been implemented to help us care for patients every day in our hospital," he said.

'Real world' look at AI's health-care impact

The St. Michael's-based research does have limitations. The study took place during the COVID-19 pandemic, at a time when the health-care system faced an unusual set of challenges. The urban hospital's patient population is also distinct, the team acknowledged, given its high level of complex patients, including individuals facing homelessness, addiction and overlapping health issues.

"Our study was not a randomized controlled trial across multiple hospitals. It was within one organization, within one unit," Verma said. "So before we say that this tool can be used widely everywhere, I think we do need to do research on its use in multiple contexts."

• Opinion Regulating artificial intelligence: Things are about to get a lot more interesting

Dr. John-Jose Nunez, a psychiatrist and researcher with the University of British Columbia — who wasn't involved in the study — agreed the research needs to be replicated elsewhere to get a better sense of how well Chartwatch might work in other facilities. There also needs to be considerations around patient privacy, he added, with the use of any emerging AI technologies.

Still, he praised the study team for providing a "real-world" example of how machine learning can improve patient care.

"I really think of AI tools as becoming one more team member on the clinical care team," he said.

The Unity Health team is hopeful their technology will roll out more widely in the future, within their own Toronto-based hospital network and beyond.

Much of that work is happening through GEMINI , Canada's largest hospital data-sharing network for research and analytics, said Mamdani, Unity Health's vice-president of data science.

• Researchers give a robot hand the power of touch, designing a human-like fingertip

More than 30 hospitals across Ontario are working together, he said, offering opportunities to test Chartwatch and other AI tools in various clinical settings and hospitals. 

"It just sets the groundwork now to be able to deploy these things well beyond our four walls," Mamdani said.

ABOUT THE AUTHOR

Senior Health & Medical Reporter

Lauren Pelley covers the global spread of infectious diseases, pandemic preparedness and the crucial intersection between health and climate change for CBC. She's a two-time Registered Nurses' Association of Ontario Media Award winner for in-depth health reporting in 2020 and 2022 and a silver medallist for best editorial newsletter at the 2024 Digital Publishing Awards for CBC Health's Second Opinion. Contact her at: [email protected]

• @LaurenPelley

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Synergistic impacts of climate change and wildfires on agricultural sustainability—a greek case study.

1. Introduction

1.1. background to the study, 1.2. objectives of the study.

• To examine the effect of extreme weather events on agricultural sustainability in Europe.
• To evaluate the ecosystem disruption caused by climate change and its effect on agricultural sustainability in Europe.
• To evaluate wildlife habitat alteration by wildfires and its influence on agricultural sustainability in Europe.
• To examine the influence of wildfire smoke on the general sustainability of agriculture across Europe.

1.3. Literature Review

1.3.1. extreme weather events, 1.3.2. ecosystem disruption caused by climate change, 1.3.3. habitat alteration by wildfires, 1.3.4. wildfire smoke, 1.3.5. climate change and sustainability of agriculture across europe, 1.4. research questions.

• What is the effect of extreme weather events on agricultural sustainability in Europe?
• How does the ecosystem disruption caused by climate change affect agricultural sustainability in Europe?
• How does wildlife habitat alteration by wildfires influence agricultural sustainability in Europe?
• What is the influence of wildfire smoke on the general sustainability of agriculture across Europe?

1.5. Research Hypotheses

2. methodology, 2.1. research design, 2.2. target population, 2.3. sample size, 2.4. data collection, 2.5. data analysis, 3.1. descriptive results, 3.2. regression analysis, 4. discussion, 5. conclusions, limitations and areas for future research, author contributions, data availability statement, acknowledgments, conflicts of interest.

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Kalogiannidis, S.; Kalfas, D.; Paschalidou, M.; Chatzitheodoridis, F. Synergistic Impacts of Climate Change and Wildfires on Agricultural Sustainability—A Greek Case Study. Climate 2024 , 12 , 144. https://doi.org/10.3390/cli12090144

Kalogiannidis S, Kalfas D, Paschalidou M, Chatzitheodoridis F. Synergistic Impacts of Climate Change and Wildfires on Agricultural Sustainability—A Greek Case Study. Climate . 2024; 12(9):144. https://doi.org/10.3390/cli12090144

Kalogiannidis, Stavros, Dimitrios Kalfas, Maria Paschalidou, and Fotios Chatzitheodoridis. 2024. "Synergistic Impacts of Climate Change and Wildfires on Agricultural Sustainability—A Greek Case Study" Climate 12, no. 9: 144. https://doi.org/10.3390/cli12090144

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