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- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
“Dr. Redinger provides a framework for dealing with integrated risk as well as the processes and tools to help and guide your successful strategy. If risk management is important to you, then I would recommend this book.”
—Malcolm Staves, Global Vice President Health & Safety, L’Oréal
“Dr. Redinger’s framing within a risk management context provides a vital contribution to public policy and organizational governance now and in the future. The book’s Risk Matrix is a brilliant effort in evolving how we can see and work with the diversity of impact-dependency pathways between an organization, and human, social, and natural capitals. A must-read for the risk professionals ready to shape the future.”
—Natalie Nicholles, Executive Director, Capitals Coalition
A hands-on roadmap to creating a risk management platform that integrates leading standards, improves decision-making, and increases organizational resilience
Organizational Risk Management delivers an incisive and practical method for the development, implementation, and maintenance of an integrated risk management system (RMS) that is integrated with ISO 31000:2018, ISO’s high-level management system structure (HLS), and COSO’s ERM.
The book explains how organizational risk management offers a platform and process through which organizational values and culture can be evaluated and reevaluated, which encourages positive organizational change, value creation, and increases in resilience and fulfilment. Readers will find an approach to risk management that involves the latest advances in cognitive and organizational science, as well as institutional theory, and that generates a culture of health and learning.
The book also offers:
- Thorough discussions of the social aspects of organizational risk management, with links to evolving Environmental, Social, and Governance norms and practices
- Detailed frameworks and systems for the measurement and management of risk management
- Insightful explanations of industry standards, including COSO’s ERM and ISO’s risk management standards
Perfect for practicing occupational and environmental health and safety professionals, risk managers, and Chief Risk Officers, Organizational Risk Management will also earn a place in the libraries of students and researchers of OEHS-EHS/S programs, as well as ESG practitioners.
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Veröffentlichungsjahr: 2024
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Table of Contents
Cover
Table of Contents
Title Page
Copyright Page
Dedication Page
Foreword
Preface
Acknowledgments
Acronyms
1 Introduction
Imperatives
Becoming Aware
Postulates and Design Principles
Who You Are
What You Will Learn
1.1 A New Era
1.2 Leverage
1.3 Integration
1.4 Culture of Health
1.5 Leadership and Seat at the Table
1.6 Finding Leverage
1.7 Book Logic and Chapter Summaries
Suggested Reading
Part I: Foundations
2 Risk Logics
Defining Risk Logics
Core Logic
Premises
Uncertainty
2.1 Contexts, Drivers, Orientations
2.2 Defining Risk
2.3 Core Concepts
2.4 Conformity Assessment
2.5 Systems Perspective
2.6 Risk Field
Suggested Reading
3 Frameworks
Power of Structure
Expanding Perspective → Expanding Awareness
Learning Context
“Next Generation” Frameworks – Evolution and Integration
3.1 Types of Frameworks
3.2 National Academy of Sciences and EPA: Risk Decision‐Making Anchors
3.3 International Organization for Standardization (ISO)
3.4 ISO Management System Standards
3.5 COSO Enterprise Risk Management Framework
3.6 Environmental, Social, and Governance
3.7 Transcending Paradigms
Appendix 3.A ISO 3100:2018 Principles
Appendix 3.B COSO ERM (2017) Principles
Suggested Reading
4 Conformity Assessment and Measurement
4.1 Frameworks and Guidelines
4.2 Measurement
4.3 Auditing
Suggested Reading
Part II: Leverage
5 Awareness in Risk Management
5.1 Origins and Development
5.2 Defining Awareness
5.3 Orientations, Perspectives, and Mental Models
5.4 Leverage and Seven Risk Awareness Elements
5.5 Language as Currency
5.6 Shifting Mindset and Paradigms
Suggested Reading
6 Field Leadership – Motive Force
6.1 Motive Force
6.2 Field “Actors” – Individuals, Teams/Departments, Enterprise, Community
6.3 Creating Value
6.4 Leadership and Participation in Frameworks
6.5 Emerging Leadership Paradigms
Suggested Reading
7 Decision‐Making – Expanding Perspective
Awareness – Process, Paradox, and Tension
Types of Decisions
Organizational Learning
Expanded Platform
7.1 Background and Anchors
7.2 Systems Perspective
7.3 Frameworks
7.4 Key Considerations
7.5 Risk Decision‐Making Kernel
Suggested Reading
Part III: Integrating Eras
8 Risk Matrix
Tailoring
8.1 Risk Field to Risk Matrix
8.2 Matrix Structure
8.3 Contexts/Drivers (
y
‐Axis)
8.4 Actors/Motive Force (
z
‐Axis)
8.5 Risk Management Elements (
x
‐Axis)
Suggested Reading
9 Matrix in Action
9.1 Risk Matrix Applications
9.2 Matrix Dynamics
9.3 Integrate and Integration
9.4 Scorecards and Dashboards – Portals for Integration
Suggested Reading
10 Escalate Impact
A → B
10.1 Transcending Paradigms
10.2 Generative Fields
10.3 Leverage – Creating Generative Fields
10.4 Carriers of a Field
28
Suggested Reading
Glossary
Index
End User License Agreement
List of Tables
Chapter 1
Table 1.1 Places to Intervene in a System (in Increasing Order of Effective...
Chapter 2
Table 2.1 Risk field, subfield elements.
Chapter 3
Table 3.1 ISO’s MSS high‐level structure. (Note: XXX refers to a specific t...
Table 3.2 COSO ERM 2004 – ERM as process versus 2017 – ERM as value.
Chapter 5
Table 5.1 Awareness‐based risk management framework v.1.
Table 5.2 Stakeholder domains.
Chapter 7
Table 7.1 Normative versus observed decision processes.
Table 7.2 Properties of Systems 1 and 2.
Chapter 8
Table 8.1 Risk Matrix dimensions and their elements.
Table 8.2 EHSS risk management elements.
Table 8.3 COSO performance measures example.
Chapter 9
Table 9.1 Risk Management Elements dashboard example.
Table 9.2 Contexts/Drivers dashboard example.
Table 9.3 Actors/Motive Force dimension dashboard example.
List of Illustrations
Chapter 1
Figure 1.1 Design realms.
Figure 1.2 Levine’s lever.
Figure 1.3 Leveraging your needs.
Figure 1.4 The capitals assessment spectrum.
Figure 1.5 Book flow.
Chapter 2
Figure 2.1 Risk management outcomes – core logic.
Figure 2.2 Evolution of EHSS/ORM.
Figure 2.3 Framework leverage.
Figure 2.4 Governance of organizations – principles and outcomes.
Figure 2.5 Relationship between risk profile, risk appetite, and risk capaci...
Figure 2.6 System dynamics iceberg.
Figure 2.7 Organizational risk field.
Chapter 3
Figure 3.1 Framework maturity sequence.
Figure 3.2 ILO’s Elements of the national framework for OSH management syste...
Figure 3.3 ISO 31000:2018, principles, framework and process.
Figure 3.4 Relationship between PDCA and ISO 45001.
Figure 3.5 2004 COSO ERM framework.
Figure 3.6 COSO ERM depiction of strategy in context.
Figure 3.7 COSO ERM, risk management components.
Figure 3.8 Double materiality example.
Figure 3.9 Issues relevant to advancing worker well‐being through total work...
Figure 3.10 COH4B practices.
Figure 3.11 Steps of the social and human capital protocol.
Chapter 5
Figure 5.1 Awareness‐Based Risk ManagementTM framework development (v.1).
Figure 5.2 ABRM framework v.1 (2012) and distinguishing first‐ and second‐or...
Figure 5.3 Decision‐making precursors.
Figure 5.4 Double loop learning.
Chapter 6
Figure 6.1 ISO 37000’s organizational value‐generation model.
Chapter 7
Figure 7.1 The hot–cold decision triangle.
Figure 7.2 Decision‐making sequence.
Figure 7.3 Depiction of system elements.
Figure 7.4 Depiction of RDM system elements.
Figure 7.5 ISO 31000’s process component.
Figure 7.6 Risk decision‐making kernel.
Chapter 8
Figure 8.1 Field to matrix.
Figure 8.2 Building a Risk Matrix.
Figure 8.3 Risk Matrix.
Figure 8.4 Cell examples – (a) Foundational cell, and (b) Trim tab cell.
Figure 8.5 Contexts/drivers row example.
Figure 8.6 Actors/motive force row example.
Figure 8.7 Risk management element column example.
Chapter 9
Figure 9.1 Actors/Motive Force dimension row.
Figure 9.2 Contexts/Drivers dimension column.
Figure 9.3 Risk Management Element column (“slice”).
Figure 9.4 Risk Management Elements dimension “slice” example.
Figure 9.5 Contexts/Drivers dimension “slice” example.
Figure 9.6 Actors/Motive Force dimension “slice” example.
Chapter 10
Figure 10.1 New clearing – impact space.
Figure 10.2 Purpose‐based generative field construct.
Figure 10.3 Generative field activation – social–human dimension and Risk Ma...
Figure 10.4 Generative field activation – enterprise/company dimension and R...
Figure 10.5 Generative field activation (trim tab cells) – Risk Management E...
Figure 10.6 Future‐ready company construct.
Guide
Cover Page
Table of Contents
Title Page
Copyright Page
Dedication Page
Foreword
Preface
Acknowledgments
Acronyms
Begin Reading
Glossary
Index
WILEY END USER LICENSE AGREEMENT
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Organizational Risk Management
An Integrated Framework for Environmental, Health, Safety, and Sustainability Professionals, and their C‐Suites
Charles F. Redinger
Institute for Advanced Risk ManagementHarvard, MA, USA
Copyright © 2025 by John Wiley & Sons, Inc. All rights reserved, including rights for text and data mining and training of artificial technologies or similar technologies.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.Published simultaneously in Canada.
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Dedicated to my parents,Rev. Joseph Dallas Redinger, MDiv, and Elaine Van Aken Redinger, MEdChampions of justice, equity, and fairness.Warriors for health and well‐being.Anchors for humanity.On whose shoulders this body‐of‐work builds.
Foreword
There is a vast literature on the topic of organizational or enterprise risk management. Any type of threat that generates uncertainty within an organization – economic, political, regulatory, cybersecurity, climate, culture, and other threats – can create risk and the potential for loss. Many books, business school research papers, and international consensus standards have all been directed to the twin goals of predicting and mitigating the broad spectrum of potential risks to an organization. Risk control efforts can yield the added benefit of promoting innovation and positive organizational growth.
Given the plethora of available books on the organizational risk management topic, is there room for yet another book? Yes, if the book is written by an organizational risk prevention practitioner, and for occupational and environmental health and safety risk prevention practitioners. Organizational Risk Management: An Integrated Framework for Environmental, Health, Safety, and Sustainability Professionals, and Their C‐Suites is a volume that takes the reader through the lifelong learning of Dr. Redinger from the time of his doctorate at the University of Michigan through many schools of risk management practice which he has participated over the decades.
While leaving out none of the rich intellectual history of the environmental, health, safety, and sustainability risk management global literature, the author takes the reader with him as he recounts important stops along his journey to becoming a renowned management systems expert. More than a personal journey, Dr. Redinger teaches the reader about each of the important contributions that scholars and practitioners of the risk management school of practice have made over the decades. The scope of the journey Dr. Redinger takes us on is encyclopedic, with stops along the way to learn about the latest advances in cognitive and organizational science, as well as institutional theory.
Organizational Risk Management will serve as a deeply resourced tool‐box for occupational and environmental health and safety professionals, risk managers and sustainability officers to succeed in the challenging business environment we are in now. More than that, though, Organizational Risk Management expands traditional thinking around risk management to include steps to create a culture of health in the organization by paying close attention to the well‐being of the people who work in the organization from the bottom to the top and all levels in‐between.
Organizational Risk Management has much to offer a broad scope of readers. From risk management students and professors to practitioners who want to enhance their fund of knowledge in the risk sciences, there is much to offer any reader. I think the reader will enjoy the journey Organizational Risk Management provides as it integrates state‐of‐the‐art risk science learning with the author’s compelling professional life story.
John Howard, MD
Director, U.S. National Institute for Occupational Safety and Health
Preface
Modeling from my parents set a trajectory that I had no idea was being set. My earliest memories are of my father’s work in civil rights as an Episcopal minister in South Central Los Angeles, and my mother’s work as a special education teacher. I helped my dad on Sundays at his church, saw the impact of the Watts Riots, threw rice at weddings, rode in the front seat of hearses with him and watched him officiate funerals. I spent days in my mother’s classroom. The term “developmentally challenged” wasn’t in the lexicon, nor had “mainstreaming” become a practice in school districts. The only criterion for her students was being toilet trained. Racial integration was evolving – our school district in Pasadena was one of the first to be “integrated” with bussing.
When I began my doctoral work with Professor Steven Levine at the University of Michigan, he was in the process of metaphorically “throwing his analytical instrumentation out the window.” He was a full professor who had made significant contributions to occupational exposure science. An insight he had early on in our time together was that “we can do better.” He was always on the lookout for ways to impact workplace health, and his attention turned from the analytical to organizational performance‐related research. With his guidance, our group produced groundbreaking work.
The torch Professor Levine passed on began many inquiries. Early in my post‐doctoral travels I read Willis Harman’s book Global Mind Change: The Promise of the 21st Century. This book introduced me to his insight that to impact complex problems – such as workplace health – look to business (companies) for leverage. With a public policy background from master’s work at the University of Colorado’s Graduate School of Public Affairs, I have an orientation toward public policy (e.g. regulatory agency intervention) solutions. Harman’s influence brought me back to the core of Professor Levine’s work, engaging with, and influencing companies.
Publishing is currency in academia. There was a constant drumbeat in our group, and in the Industrial Health Department, to publish. I was the lead author on a management systems chapter we wrote for the fifth edition of Patty’s Industrial Hygiene and Toxicology. Wiley representative Bob Esposito approached me in late 2012 about pursuing this book. He was familiar with my risk management expertise from chapters I had written in Patty’s. I politely declined as I had bandwidth concerns. In addition to my “day job” I had significant volunteer engagements with two organizations; an officer at the American Industrial Hygiene Association (AIHA), serving as the board secretary, and serving on the Center for Safety and Health’s (CSHS) Board of Directors.
Bob circled back in 2017 and I said “yes.” Even though my bandwidth was limited for a project of this magnitude, I sensed an imperative to present a fresh perspective on risk management for environmental, health, safety, and sustainability (EHSS) professionals and their organizations. Professor Levine’s admonition, “we can do better,” was always in the background and impacted the yes to Bob.
The complexities of organizational EHSS risk management are well known and have historically been addressed from a technical and regulatory compliance perspective. In the years leading up to 2020, there was growing sentiment for organizations to focus more on the social dimensions of risk. This became an imperative in 2020 when it was pushed to the top of organization risk profiles. The trajectory I sensed in 2017 obviously didn’t anticipate the pandemic, and all that cascaded from it.
The doctoral work and Professor Levine’s mentoring brought my attention to EHSS risk management. Since then, my focus has been on both the improvement of organizational performance, and the skills and competencies of the professionals who drive EHSS’s contributions. The management system work we did at the University of Michigan was groundbreaking and had global impact; we were pioneers in that arena. After the doctoral work, I began applying what we had developed in organizations and standards‐development activities. It soon became clear with the organizational work that the success of a management system was a function of (1) how an organization’s culture was conditioned for implementation, and (2) the culture’s risk orientation.1 While I was familiar with Peter Senge’s work on organizational learning with the publication of the Fifth Discipline in 1990, it was in the 2005 timeframe that I began augmenting my technical skills with a deep dive into organizational science. I took classes at MIT’s Sloan School of Management and participated in numerous workshops with Peter and others at the Society of Organizational Learning (SoL). Since that time, I’ve done extensive work on developing methods and techniques to impact and shift an organization’s risk culture, so that at minimum, there is (1) increased awareness of the links between actions, outputs, outcomes, and impacts; (2) an understanding about the risk management decision‐making process; and (3) increased ability to align actions with desired goals. These methods and techniques are presented throughout this book, along with an integrated framework within which to use them. Beyond these three “minimum” points on impacting and shifting a risk culture, I suggest in the book’s final chapter – given risk management’s central role in organizational governance – it can serve as a platform to achieve goals beyond ones traditionally associated with it.
One of the writing projects in the mix when Bob circled back in 2017 was a book chapter on EHSS risk management that evolved into being titled “Decision Making in Managing Risk.” The chapter’s evolution was impacted by the work of Daniel Kahneman, Amos Tversky, and Paul Slovic.2 Through our research, it became apparent to the co‐authors and me that organizational risk management involved much more than its historic technical and regulatory compliance roots. In the chapter, we introduced the term “risk realms” and framed EHSS risk management as a decision‐making endeavor that happens at the intersection of these risk realms. While any number of “realms” could be identified, we simplified them into three groups of drivers: (1) those external to the organization (e.g. regulations, laws), (2) those internal to the organization (e.g. mission, values), and (3) those related to people (e.g. employees, community, consumers). The chapter was also impacted through participating in a SoL workshop in 2018 where I learned about Generative Social Fields (GSF) and was invited to participate in a “gathering” convened as part of efforts to evolve a GSF lexicon and GSF constructs.3 Learning about the generative field construct has enriched the development of the integrated risk management framework presented here. I touch on GSF roots and their contributions throughout the book.
My appreciation for and understanding of risk management’s social dimensions and their affect on organizational risk profiles grew through research I did for this book, my participation as a strategic advisor to two standards‐development activities, and trajectories that unknowingly began in my youth. For this project, I’ve conducted interviews and discussions with many professionals who were in, or had been in, a wide range of organizations, at all levels, including executive management. Included were academics, standards‐developers, and public policymakers. Through the interviews, ideas presented in the risk decision‐making chapter were validated and evolved. They began in late 2019, continued into early 2021, and have been ongoing into 2024. Participants in these interviews and discussions reinforced the risk realm model and many highlighted the growing importance of the “people” realm. Several referred to this as the “human realm.” This notion of “people” and “human realm” is presented in this book as “social‐human field.”
Numerous interviewees pointed to two imperatives with their staffs, and EHSS risk management professionals in general. One had to do with gaining increased perspective. That is, to view their activities – such as risk assessment and control – more widely than regulatory compliance or consensus standard’s needs. To think beyond immediate operational needs to consider, for example, value chain and other “outside the fence line” issues. The second imperative was characterized in terms of empathy and giving attention to risk profile impacts on people associated with the organization, including employees at all levels, service providers, contractors, etc. Each of these – increasing perspective and empathy – are threads throughout the book’s tapestry. Both contributed to the development of the multidimensional risk management framework presented in this book, particularly with the contexts/drivers and actors/motive force dimensions.
At around the time that I executed the contract for this book, I was asked to represent CSHS in an initiative to develop a Culture of Health for Business framework sponsored by the Robert Wood Johnson Foundation (RWJF) and the Global Reporting Initiative (GRI). It was through this engagement that I saw and began to articulate, that organizational risk management platforms could serve as a foundation from which a culture of health could flourish.
From its inception in 2010, a central piece of the CSHS’s mission was to impact sustainability and ESG (environmental, society, and corporate governance) frameworks, metrics, and reporting structures. We provided technical support to GRI in its evolution from its G3 to G4 standards. As it was sunsetting in 2019, with the leadership of Kathy Seabrook and Malcolm Staves, the center began to support the Capitals Coalition with their Human and Social Capitals framework and metrics development. The coalition provides an important anchor in considering the social dimensions of risk. Parallel to preparing this book, I was serving as a strategic advisor on the coalition’s Worker Health and Safety Project Team and was the lead on its metrics workstream.
The coalition’s work and “capitals thinking” orientation present a transformational perspective not only in the sustainability and ESG spaces but also in organizational governance norms, practices, and decision‐making. The focus of this book is not on ESG, but ESG does have a role in EHSS risk management, impact (materiality and double materiality) reporting, and vice versa. I highlight the coalition’s transformational thinking and processes in the book – with a focus on integrated thinking.
The organizational risk management landscape revolves around the two dominant frameworks and standards used by organizations. In 2017, the Committee of Sponsoring Organizations of the Treadway Commission (COSO) published the second edition of its enterprise risk management (ERM) framework; and, in 2018, the International Organization for Standardization (ISO) published the second edition of its risk management standard, ISO 31000. These second editions reflect an evolution in organizational risk management thinking and processes, including the integration of risk decision‐making with activities ranging from daily boots‐on‐the ground routines, up to enterprise‐wide strategic planning. This book provides increased dimensionality to these works.
The increasing complexity and tight coupling in risk profiles, of which social‐human dynamics are a piece, necessitate, if not demand, fresh perspectives that transcend historic organizational risk management practices. With the integrated and multidimensional framework presented here, my goal is to provide you with tools and techniques to see, transform, and unleash organizational capacity that escalates impact.
Charles Redinger, PhD, MPA, CIH
September 2024
Institute for Advanced Risk Management
Harvard, MA, USA
Notes
1
This notion of risk orientation is a central theme in this book; I use the word “orientation” to represent a collective bundle of individual cognitive factors, that include perspective, perception, attitude, mental models, etc.; and, the collective expression of them in the culture.
2
Pioneers in decision and cognitive science. Kahneman received a Nobel Prize for work he and Tversky did together; his book
Thinking Fast and Slow
provides a good overview of their work, as well as does Michael Lewis's book,
The Undoing Project
.
3
In sociology, field theory examines how individuals construct social fields, and how they are affected by such fields. Social fields are environments in which competition between individuals and between groups takes place, such as markets, academic disciplines, musical genres, etc. This concept provides a lens through which to view organizations.
Acknowledgments
I am thankful first and above all for my parents’ role‐modeling of intellectual curiosity and commitment to community service. Their unending attention and focus on educating and mentoring those whose lives they touched has provided both inspiration and a foundation for my life’s work.
Building on this was accelerated by Thomas Turner, Richard Ridge, Maurine Saint‐Gaudens, and others in their extended community. Their influence in my teens through the present set a learning‐oriented trajectory toward critical thinking, science and empirical inquiry. I am thankful for the mentoring and character‐building that Lynn Newcomb at Mt. Waterman Ski Lifts provided.
Larry Birkner was initially a client with ARCO and became a good friend and collaborator. He modeled grit, stick‐to‐itiveness, and charm. He connected me with Steve Levine at the University of Michigan and was an early collaborator in organizational improvement quests.
Professor Levine modeled intellectual courage and dogged determination to impact worker health and well‐being. He brought together an amazing group of doctoral students who have provided international leadership and have been friends and collaborators over the years, including David Dyjack, Michael Brandt, and Doo Young Park.
In my doctoral work, I was very fortunate to have crossed paths with and received guidance from numerous people at the Occupational Safety and Health Administration (OSHA), including Marta Kent, Leo Cary, Steve Newell, Frank White, Cathy Oliver, Ed Stern, and Michael Seymour. They supported field work and learning along with Joe Wolfsberger, Marc Majewski, Mike Blotzer, Jere Ingram, and others who opened their organizational doors to offer assistance.
The American Industrial Hygiene Association (AIHA) has provided a strong learning community for decades. I am thankful for their leaders and staff who have provided opportunities and made contributions to my growth and bodies‐of‐work. AIHA CEOs Peter O’Neil and Larry Sloan have been particularly helpful, along with their staffs, including Manuel Gomez, Mary Ann Latko, and Alla Orlova. I am appreciative of friendships and collaborations with Zack Mansdorf, Vic Toy, Thea Dunmire, Alan Leibowitz, Kyle Dotson, Fred Boelter, Mary O’Reilly and Glenn Barbi.
Collaborators and co‐founders at the Center for Safety and Sustainability have been valuable thought‐partners in developing innovative EHSS and organizational risk management solutions. I am indebted to Kathy Seabrook, Tom Cecich, and Dennis Hudson for their contributions to my development in the sustainability standards arena. I am thankful for the many conversations with Natalie Nicholles and Malcolm Staves during work with the Capitals Coalition.
I met JoAnne Kellert in 1999, soon after completing my doctoral work. I reached out to her for support in my quest to create a new, post‐regulatory compliance, context for EHSS professionals. As a business coach, mentor, and friend, she has provided invaluable guidance in the development of the ideas in this book. Her advice and coaching rigor has helped bring this project to fruition. Her recommendation to take Peter Senge’s Foundations for Leadership course in 2005 began a valuable phase in my development.
There are many thought‐leaders, scholars, academics, etc. whose work and teachings have made significant contributions to my growth and development. Peter Senge and others – including Otto Scharmer and Mette Miriam Boell from MIT and the Society for Organizational Learning, have had impact not just for me, but widely in society. Their quest to integrate research, methodological development, and boots‐on‐the‐ground practice in pursuit of solving complex problems, is groundbreaking and noble.
Invaluable input was provided throughout the development of this book from Glenn Barbi, Fred Boelter, Michal Brandt, Thea Dunmire, JoAnne Kellert, Steven Lacey, Alan Leibowitz, Zack Mansdorf, Anthony Panepinto, and numerous other colleagues.
I am especially grateful to Thomas Turner, Richard Ridge, and SusanMary Redinger for their tireless efforts in proofing and editing throughout this effort.
My wife SusanMary and daughters Maggie and Ally have had amazing patience supporting me in seeing this project throught to the end. They have provided unending support and encouragement for which I am deeply grateful.
Charles Redinger, PhD, MPA, CIH
September 2024
Institute for Advanced Risk ManagementHarvard, MA, USA
Business has become, in this last half‐century, the most powerful institution on the planet; it is critical that the dominant institution in any society take responsibility for the whole, as the church did in the days of the Holy Roman Empire. But business has not had such a tradition.1
Willis Harman
Stanford University
Notes
1
Harman, W. (1987). Why is there a world business academy?
https://worldbusiness.org/why‐a‐world‐business‐academy/
(accessed 23 July 2019).
Acronyms
COH4B
Culture of Health for Business
CSR
Corporate social responsibility
CC
Capitals Coalition
CDP
Climate Disclosure Project
CDSB
Climate Disclosure Standards Board
CERES
Coalition for Environmentally Responsible Economies
CSHS
Center for Safety and Health Sustainability
DE&I
Diversity, equity, and inclusion
EHS
Environmental, health, and safety
EHSS
Environmental, health, safety, and sustainability
ERM
Enterprise risk management
ESG
Environmental, social, and governance
ESRS
European Sustainability Reporting Standards
GAAP
Generally accepted accounting practices
GRI
Global Reporting Initiative
GSF
Generative Social Field
HC
Human capital
HCM
Human capital management
HHRA
Human health risk assessment
IASB
International Accounting Standards Board
IFRS
International Financial Reporting Standards
IIRC
International Integrated Reporting Council
ILO
International Labor Organization
IRMS
Integrated risk management system
ISO
International Organization for Standardization
ISSB
International Sustainability Standards Board
MOC
Management of change
MS
Management system
MSS
Management system standard
NFRM
Non‐financial risk management
NGO
Non‐governmental organization
NIOSH
National Institute for Occupational Safety and Health
NOMS
National Occupational Mortality Surveillance
NRC
National Research Council
OEHS
Occupational and environmental health and safety
OHS
Occupational health and safety
OHSMS
Occupational health and safety management system
ORMS
Organizational risk management system
ORM
Organizational risk management
RDM
Risk decision‐making
RMS
Risk management system
RWJF
Robert Wood Johnson Foundation
SASB
Sustainability Accounting Standards Board
SDG
Sustainable development goals
SEC
Securities and Exchange Commission
SHCP
Social and Human Capital Protocol
TCFD
Task Force on Climate‐Related Financial Disclosures
TEEB
The Economics of Ecosystems and Biodiversity
TBL
Triple bottom line
VRF
Value Reporting Foundation
1Introduction: Leverage to Create
CONTENTS
Imperatives
Becoming Aware
Postulates and Design Principles
Who You Are
What You Will Learn
1.1 A New Era
1.1.1 Value and Purpose
1.1.2 Social–Human Dimension of Risk
1.1.3 Environmental, Social, and Governance
1.1.4 Diversity, Equity, and Inclusion
1.1.5 Health – Organizational and Human
1.2 Leverage
1.2.1 Levine’s Lever
1.2.2 A → B, Current Reality and Where You Want to Go
1.2.3 Thinking in Systems
1.2.4 Shifts
1.2.5 Frameworks and Structures
1.2.6 Metrics and Indicators
1.3 Integration
1.3.1 Integrating What?
1.3.2 Integrated Thinking
1.3.3 Integrated Risk Management
1.4 Culture of Health
1.5 Leadership and Seat at the Table
1.5.1 Motive Force and Organizational Energy
1.5.2 The Table
1.6 Finding Leverage
1.6.1 Your A → B
1.6.2 Developing a Playbook
1.6.3 Creating a Project
1.7 Book Logic and Chapter Summaries
1.7.1 Chapter Flow and Book Logic
1.7.2 Chapter Summaries
Suggested Reading
Call me Trim Tab. 1
Buckminster Fuller
Fundamentally, this book addresses how to create new clearings2 and capacities that increase the ability to generate and preserve value, resilience, and fulfillment for an organization and its stakeholders. The focus is on using organizational risk management (ORM) as a platform and environmental, health, safety, and sustainability (EHSS) management as a vehicle. Integrated thinking and decision‐making are the fuel that generates organizational energy. This happens within a generative risk field. The possibility offered here is the transformation of ORM, and in turn, the transformation of organizational governance and purpose.
Few topics are more prominent in organizational governance than risk. Throughout the terrain of insurance and regulatory compliance, risk ideas and concepts have evolved. Things like COVID‐19, environmental, social, and governance (ESG), and diversity, equity, and inclusion (DE&I), have brought to the fore new entries to risk profiles and a need for fresh thinking and leadership about how to interact with risk in organizational life. In this mix, there is increased attention to organizational purpose, value generation, and preservation. While concepts of value are not new in organizational governance, a relatively new evolution has been framing value in terms of capital, not just financial capital but also natural, social, and human capital.
Beyond‐compliance thinking was a mantra when International Organization for Standardization (ISO) management systems began to appear in the 1980s and 1990s, first with quality and then environmental management. Along with other approaches, ISO management systems offered frameworks to organize activities that were aligned with organizational objectives, not just regulatory compliance. To say current ORM approaches are bankrupt may be too strong. But there is ample evidence that fresh thinking is needed, along with approaches and solutions that address changing risk profiles and the bundle of external challenges that organizations face, often characterized as volatile, uncertain, complex, and ambiguous (VUCA).3
A risk field framework is offered here as a fresh approach. Field ideas and theories are not new. They were found in the physical and social sciences as early as the 1860s with James Maxwell’s identification of electromagnetic fields and in the 1940s with Kurt Lewin’s field theory work in psychology. Numerous sociologists were developing organizational field theories in the 1970s and 1980s, which have developed into a burgeoning arena in institutional thinking.4 In the 2015 timeframe, Peter Senge, Otto Scharmer, and Mette Boell worked on developing a lexicon to further ideas on generative social fields. I first learned about organizational field concepts in my master’s degree work in public policy in the 1990s. In 2018, I was fortunate to attend a workshop at the Garrison Institute led by Peter, Otto, Mette, and others. The workshop focused on the application of generative social field concepts to impact large organizations and complex social systems. At that time, I was in the early stages of writing this book. The knowledge I gained there and in a subsequent workshop in 2019 provided a platform and language for my evolving ideas on how to transform ORM.
The risk field framework is operationally realized with a three‐dimensional Risk Matrix that can be used as a tool to (1) foster integrated thinking, decision‐making, and action; and (2) impact organizational culture, specifically in generating a learning culture, and a culture of health. The Matrix presents ORM drivers, EHSS management elements, and “actors” and entities that provide motive force that translates into organizational energy.
Book flow and overview follow at the end of this chapter. But first, let us look at some foundational things to set the stage.
Imperatives
It is an understatement to say that much changed in 2020 with the global pandemic and the host of things that cascaded from it. Norms were skewed, and weaknesses in human, public, community, and organizational health were revealed. The “social” aspects of ESG and DE&I were on the radar well before 2020 but took on new dimensions in the years that followed. Our understanding of workplace impacts was still playing out when this book went to press.5 What is clear is that things like fatigue, burnout, and psychosocial issues are common in the post‐2020 era; that rules of engagement between organizations and their workforce have shifted; and a general sense of things being “out of balance” has taken hold. Issues of health and safety have taken on a new dimension, along with concerns related to diminished engagement.
Sustainability, corporate social responsibility (CSR), and ESG – generally referred to in the aggregate as ESG – have also been added to the organizational agenda. As this book was in its final stages, there was significant consolidation of principles and standards in the ESG space.6 The International Sustainability Standards Board (ISSB) was formed in 2021 and issued its first standards in 2023. ESG issues and organizational responses are woven throughout this book. This introduction’s title, “Leverage to create” partially originates from a need for nimbleness in responding to ESG’s impact on risk profiles, and in turn, how to respond. While there are many complexities in the ESG arena, possibly the most significant are associated with its “social” aspect.
Some of the things I have heard from EHSS professionals over the years that have inspired this book’s development are:
“I don’t know how to handle/manage the diversity of things in front of me”;
“I don’t know how to increase my staff’s ability to look beyond compliance and audit checklists”; and,
“I know I/we can contribute more. How do I/we get a 'seat at the table' to offer our skills beyond compliance things.”
Throughout the book, I point to an ever expanding list of risks, their complexity, and the tight coupling between them. In my decades of practice in ORM and EHSS management, I have seen and experienced this evolution as an academic, an advisor to regulators, and as a consultant to Global 500 companies, as well as in my teaching to thousands of EHSS/ORM professionals where I have heard about their challenges. Through these travels and my exposure to practitioners and scholars from diverse academic disciplines, I have formed this view, and suggest to you that:
The historic ways we frame and practice ORM have diminished ability to meet post‐2020 challenges.
Notions of urgency and imperatives seem to me to be overused at times. Nevertheless, I strongly suggest that with the increased prominence and presence of “the social” and “the human” in organizational life, there is an imperative, if not urgency, to explore fresh approaches to navigate in these new paradigms.
Becoming Aware
Becoming aware of awareness is the first step in change, transformation, and creating new clearings. Key distinctions in this book are awareness and becoming aware of new organizational risk contexts. And in turn, to expand and grow into these.7 Becoming aware is framed here in terms of learning and transformational shifts, both individual and organizational. This involves increasing knowledge and perceptions of ORM – yours, your teams, and the structures and frameworks within which we, you, and they operate. The notion of “becoming aware” is the focus of a body of work expressed in the book On Becoming Aware,8 and is expanded on in the book Theory U.9 Aspects of these are touched on throughout this book.
Awareness of risk contexts is a necessary and fundamental first step in transcending the limits of historic ORM approaches. Shifting the context from one of compliance to value creation and preservation and focusing on capitals and their strengths/health, alters being and action. It alters internal states and perceptions. It provides a clearing whereby the outcome space represented in Figure 1.1 expands – and where outcomes such as increased resilience and fulfillment – for the organization and its stakeholders – can happen.
Postulates and Design Principles
Postulates that this work is organized around are:
Organizational risk profiles have grown in complexity and interconnectedness (tight coupling).
A social–human era is evolving.
Fresh ORM frameworks, orientations, and perspectives are needed to meet new challenges.
Framing ORM within an organizational field construct provides leverage.
Increased awareness of, and attention to value and purpose, generates organizational energy and motive force.
Increasing understanding and awareness of organizational energy
10
reduces uncertainty
11
and increases the power of diagnostics tools.
Embodying interiority is the secret sauce of generating organizational energy and shifting from a system to a generative field.
12
Figure 1.1 Design realms.
Increasing awareness, fostering integrated thinking, and shifting attention to purpose and value‐ generation are primary threads in the fabric I weave with you in this book. My goal is to evoke new ways of thinking about risk and transforming ORM beyond risk‐related outcomes.
ORM is framed here in terms of non‐tangible and tangible realms, or if you like, nonphysical and physical realms. Their intersection is the space of decision‐making and the generation of organizational energy, and where outcomes are produced. It is in this space that shifts happen and new possibilities arise (Figure 1.1). This is a key insight from my earliest days following graduate school. It has framed much of my work and thinking since the late 1990s. Examples of tangibles include systems, frameworks, policies, procedures, and “bricks and mortar.” Examples of non‐tangibles include human capital (people; “the human”), social capital, communication, culture, and community.
Regulatory and technical issues are ORM’s historical focus. These are not addressed in depth here. Rather, the primary focus is on things in the non‐tangible realm, like culture, leadership, cognition, and ontology, and their intersection with systems and frameworks. Facets of leadership are reviewed in Chapter 6 (Field Leadership), along with the introduction of a fresh leadership perspective that I call field leadership. Cognitive dynamics are covered in Chapter 5 (Awareness in Risk Management) and Chapter 7 (Decision‐Making).
Who You Are
This book is written with attention to people at multiple organizational levels and functions. The primary focus is on mid‐to senior‐level EHSS professionals; the executives to whom they report and who have ultimate accountability; and those who design, build, implement, operate, and evolve programs and systems in an organization. EHSS activities are framed within an ORM context because these activities, while EHSS‐focused, are happening within an organizational context. It is my intention to assist you in your endeavors, increasing your professional confidence, personal resilience, and ability to impact your organization.
Non‐EHSS ORM practitioners and executives will also find value here, as will early career professionals. There are clearly many levels within an organization, from production and support functions up to the C‐suite (an organization’s most senior executives) and board of directors, in addition to an array of stakeholders that include vendors, strategic partners, community members, customers, and those found throughout supply chains. All of these are connected by EHSS/ORM norms, practices, and goals which are also elements of an organization’s risk field.13
What You Will Learn
My goal is to provide you with tools, skills, constructs, and places from which to orient that will help you navigate and lead in the post‐2020 landscape. I am focused on helping you, your teams, and your organization increase resilience and fulfillment, both for the organization itself, and the people associated with it. While resilience and business continuity have been on the radar for decades, they took on increased salience in 2020, along with challenges in meeting basic goals and objectives. I advocate elevating “fulfillment” from its current aspirational status to an intentional goal for everyone associated with the organization.
In this book, you will learn processes, tools, and constructs to:
Increase risk awareness and perspective;
See, characterize, and transform systems;
Develop and use new metrics and assessment schemes; and
Foster integrated thinking, decision‐making, and action.
Uncertainty is possibly the most prominent concern in ORM. Understanding it and reducing it – if not eliminating it, is a paramount goal in all risk management endeavors. The risk field construct and its operationalization as a Risk Matrix (Chapter 8) help to accomplish this goal by identifying key risks and their interconnections within organizational systems and then developing strategies to minimize them. The Matrix provides a multidimensional framework that promotes integrated thinking and decision‐making.
1.1 A New Era
As suggested, impacts from the 2020 pandemic were significant and have lingered. Social, organizational, and individual norms were skewed, and vulnerabilities in human, public, community, and organizational health became more visible. While the “social” aspects of ESG and DE&I were on the radar well before 2020, they took on new dimensions in the years that followed. It is bold, and maybe too strong, to suggest that we are in a new era, but what is clear is that there has been increased attention to social and human capital on numerous fronts.
It is timely to consider whether the historic ways we frame and practice ORM, and within it EHSS risk management, are sufficient in this new reality of increased complexity and tight coupling. Historic approaches are compliance‐driven, tend to be siloed, and have narrow and often ill‐defined decision‐making processes.
As this book was going to press, ESG and DE&I had taken on a political/ideological dynamic. Regardless of one’s views, these are topics that need to be considered in an organizational risk context.
1.1.1 Value and Purpose
Issues related to value generation and protection are woven throughout this book. These are key themes. Value protection is fundamental to what EHSS/ORM professionals have done for decades; it is foundational to our work. I suggest at numerous junctures that we intentionally “flip the script” from value protection to value generation. Of course, protection cannot be ignored and must remain a priority. However, you will see as we progress that value generation is framed in terms of integrated capitals that are intricately interconnected, and on which EHSS/ORM professionals have both the opportunity and the ability to provide impact.
In like fashion, there is considerable emphasis from numerous perspectives related to organizational purpose. The integrated Risk Matrix offered here provides a framework for considering purpose not only from the enterprise/company perspective but also from the perspective of individuals, teams/departments, and the community. Determining purpose is unique for each organization and the other entities identified. As with value, I offer that EHSS/ORM professionals' historic attention to health – human, environmental, and organizational – provides us with unique perspectives and abilities to contribute to overall organizational purpose.
1.1.2 Social–Human Dimension of Risk
Values are at the heart of ORM, none more so than within its social–human dimension. The word “social” means different things to different people and in different contexts – much as risk does. The way you and your organization define this dimension is important. As suggested, it is valuable, if not critical, to be clear about your orientation, perspective, and awareness regarding the social–human dynamic. This topic bumps up against charged legacy tensions in the interactions of organizations, communities, and society. These are important considerations when upgrading ORM systems and structures in the social–human era.
In this book, the term social–human refers to people individually and collectively, both inside and outside an organization’s “fence line”, including those in supply chains, communities, consumers, and the population in general. Bedrock are the people who work for a company, historically referred to as workers or employees. Over time, work relationships have morphed with the use of contractors and the evolution of the gig economy. Also in this first layer are the supply/value chains and the people in them. Another layer includes the people in communities where the company resides (brick and mortar), as well as its customers (product stewardship). And finally, and more broadly, mainly from an environmental perspective, is the way externalities from the business impact human health beyond the immediate communities. There is a lot to unpack with these layers/levels. I do this throughout the book and offer guidance and suggestions on how to gain clarity about how the dynamics of these levels/layers impact your company’s risk profile.
Social determinants of health (SDH) are well‐developed and prominent concepts in public health.14 They are defined by the World Health Organization (WHO) as “the conditions in which people are born, grow, work, live, and age, and the wider set of forces and systems shaping the conditions of daily life.” Such forces and systems are relevant topics in the social–human era and are seen in ESG and DE&I. I suggest that it is valuable to have an understanding of SDH issues and their terrain. This understanding will be helpful in being clear on what you and your company mean, or will mean by “social” as you upgrade your ORM frameworks and approaches. More on this in Chapters 8, 9, and 10.
1.1.3 Environmental, Social, and Governance
Events of 2020 brought to the fore numerous social aspects of risk not historically considered in organizational risk profiles – namely the health and well‐being not just of people but of the organizations themselves and the communities that support them and provide implicit and explicit license to operate. The social aspects of ORM have also been growing in the ESG reporting space. In the 2010s, ESG ideas and thinking – if not norms and “requirements” – evolved in several respects. Notions of “capitals” thinking began to be highlighted, along with integrated thinking and actions related to them. While the “social” of ESG has had historic attention, it increased as the 2010s decade progressed. My focus in this book is not on ESG reporting per se. However, given its (1) relation to ORM, (2) the evolving nature of its attention to social and human capital, and (3) its attention to integrated thinking and integrated RDM – it is touched on throughout.
Considering the social dimension of EHSS/ORM is not new. Historically, the domains of human resources, organizational development functions, and public relations – “social” aspects of organizational activities – have not been prominent in risk considerations. Numerous points in time can be identified where this began to change. In the United States, significant laws and regulations began to appear in the early 1970s, which are referred to as an era of “social regulations.” These include the National Environmental Policy Act and the Occupational Safety and Health Act, which respectively established the EPA and OSHA. Within the sustainability space that grew in the 1980s, ideas, practices, norms, etc. for “corporate social responsibility” (CSR) began to accelerate. In addition, in the 1980s, the triple‐bottom‐line emerged, reflecting a shift from traditional accounting and reporting practices to ones that considered ESG.
1.1.4 Diversity, Equity, and Inclusion
In the first two decades of the 21st century, DE&I evolved into a significant aspect of human capital management in organizations, if not an important issue in risk management. The three terms are used differently in different circles, but they have been increasingly referred to simply as DE&I. Their roots trace back to the 1960 civil rights movement, the Equal Rights Amendment in the 1970s, and fairness in the workplace initiatives in the 1980s and 1990s.
The Greenlining Institute, a nonprofit policy and research thinktank, offers definitions of the DE&I components as: “Diversity refers to difference or variety of a particular identity; Equity refers to resources and the need to provide additional or alternative resources so that all groups can reach comparable, favorable outcomes; and Inclusion refers to internal practices, policies, and processes that shape an organization’s culture.”15 Examples of common diversity factors are: age, disability, ethnicity/national origin, family status, sex, gender identity or expression, generation, language, life experiences, neurodiversity, organizational function levels, physical characteristics, race/color, religion, sexual orientation, and veteran status.16
The label DE&I is not familiar to many EHSS and ORM professionals. But from an ORM perspective, DEI&I issues have been in play for decades; it is just that the DE&I label is a relatively new term. The human resources department commonly takes the lead on issues related to policies and procedures. Framing DE&I within a risk management context – such as considering risk tolerance, acceptable risk, risk transfer, and risk owner – is critical in the social–human era and as ORM frameworks and approaches evolve and address social–human issues.
1.1.5 Health – Organizational and Human
Health is a state of complete physical, mental and social well‐being and not merely the absence of disease or infirmity.17
World Health Organization (WHO)
Building on WHO’s foundational definition related to human health, notions of health have been increasingly viewed from multiple perspectives. Numerous bodies of work have evolved in the 2000s focused on organizational health. The consulting firm McKinsey and Company has done extensive work on this topic that is summed up in an excellent book titled, Beyond Performance: How Great Organizations Build Ultimate Competitive Advantage (2011). The Robert Wood Johnson Foundation (RWJF) has funded and participated in numerous projects related to community and workplace health. Later in this chapter, I touch on the Culture of Health for Business (COH4B) initiative that they co‐sponsored with the Global Reporting Initiative (GRI).
In later chapters, I offer suggestions and ideas on considering WHO’s definition in terms of ORM and generative fields. As we dive deeper into purpose and value issues, I propose that organizational and human health be included among the top purpose and value drivers.
1.2 Leverage
Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.
Archimedes
Many, if not all, organizational activities seek to improve efficiencies and performance, to do more with less, and so on. Whether it is looking for leading performance indicators, processes, or systems, we seek ways to use less force or energy and accomplish more. This is a central theme in this book, with particular focus on the non‐tangible realm depicted in Figure 1.1.
1.2.1 Levine’s Lever
When I joined Professor Steven Levine’s research group at the University of Michigan in 1994, he was transitioning his focus from analytical instrumentation used in exposure science to a management agenda that focused on management systems, audit tool development, and activity‐based cost accounting.18 It was his view that while traditional research on things like glove permutation, sampling efficiency, and the like was of course important, it had limited impact on improving workplace and community health.
Figure 1.2 Levine’s lever.
Early in my time with him, Levine showed me and other students a hand‐drawn figure that had a circle, on a fulcrum, with a lever attached. In the circle was OHS, short for occupational health and safety (OHS), and along the lever were a series of words and phrases; these are depicted in Figure 1.2. He did this as part of his quest to characterize activities and their relative impact on OHS performance.
While the diagram is simple, it left a lasting impression on me. It grew over the years through a range of engagements that included developing management systems in large organizations, upgrading audit programs, and teaching. Through conducting many EHSS audits, I observed many efforts to determine upstream actions (causes) that impacted downstream outcomes (effects). Identifying upstream actions and their indicators is akin to creating a longer lever.
In this book, three questions I address are: (1) in the suggested social–human era, how might the circle be depicted; (2) what are the goal(s); and (3) what are the activities and actions that are expected to lead to greater leverage to accomplish it/them?
I leave this to you and your organization to identify the content of your circle, essentially that which you want/need to leverage, improve, transform, etc. Going forward in the book, this is depicted as “B” in Figure 1.3. You might say ESG. You might say EHSS. You could say, generally, resilience and fulfillment. We explore these questions together in later chapters, where I will prompt inquiries on them for you and your organization.
Figure 1.3 Leveraging your needs.
The futurist Buckminster Fuller contributed the metaphor that profoundly crystallized my vision of what is possible for individual actions in large and complex systems. It deserves repeating:
Something hit me very hard once, thinking about what one little man could do. Think of the Queen Elizabeth – the whole ship goes by and then comes the rudder. And there’s a tiny thing at the edge of the rudder called a trim tab. It’s a miniature rudder. Just moving the little trim tab builds a low pressure that pulls the rudder around. It takes almost no effort at all. So I said that the individual can be a trim tab. Society thinks it’s going right by you, that it’s left you altogether. But if you’re doing dynamic things mentally, the fact is that you can just put your foot out like that and the whole ship of state is going to turn around. So I said, ‘call me Trim Tab.’19
At several points in this book, the trim tab metaphor is revisited in terms of you and your team(s) and the actions that generate organizational energy, motive forces, and engagement.
1.2.2 A → B, Current Reality and Where You Want to Go
While simplistic, “B” is used to depict a future state. This could be simple or complex. It could be the result of a visioning or futuring process or pegged to something like ESG. Throughout the book, I use the notation A → B as shorthand for a simple causal model for getting from point A to point B. Integrating
