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Institute of Risk Management experts outline key risk areas for 2015

Political instability caused by low oil prices, increased shareholder activism and the business threat posed by a potential UK exit from the EU are among the chief concerns voiced by some of the UK’s leading risk experts for 2015.

As 2014 draws to a close, members of the Institute of Risk Management (IRM) were asked to identify key risk areas for 2015. A broad range of oil and gas, political, healthcare, regulatory and insurance risks were highlighted as potential flashpoints.

Oil and Gas

“The lower oil price will raise a number of risks, including political and social disruption in oil producing countries which, if not successfully managed, will impact on the world,” asserted Mark Boult, Fellow of the IRM and director at risk management consultancy DNV GL.

Boult continued: “Given the greater financial pressure we will see on the sector next year, stakeholders need to maintain their focus on the integrity of assets. Not doing so will deliver poorer reliability and increase the risks of a major accident. Industry and Governments should work together to proactively manage down the commercial pressures and risks facing the industry from the oil price drop.”

A catastrophic major accident and physical asset integrity will remain a major industry focus for next year. “Such events are always – and always need to be – at the front of our minds given the impact they have on people, the environment and the business of the industry as a whole,” explained Boult.

Commentators from the IRM have mapped out key potential risks for 2015

Commentators from the IRM have mapped out key potential risks for 2015

Politics

An uncertain political environment in the UK is highlighted as a key risk area for next year by IRM members. “We need to watch closely how the dialogue between the UK and EU develops,” said José Morago, IRM chairman and group risk director at Aviva. “The potential risk of a UK exit from the EU could bring about even bigger strategic, operational and legal risk challenges to many international companies than those raised by Scottish independence.”

Morago added: “Next year, we have the UK General Election and possible presidential elections in Europe. With continuing fiscal deficits, cost of living pressures, low investment returns and low public trust in financial institutions, there’s a real risk of further – and bolder – political announcements as parties compete for public approval.”

Mark Butterworth, member of the IRM and managing director at risk management consultancy Condie Risk, believes the unpredictability of next year’s UK General Election is unique in his adult memory. Butterworth argues that a vote to leave the EU could provide the Scottish National Party with a boost, “possibly leading to the start of the ‘second’ wave for independence.”

Alternatively, an indecisive result in a May election which fails to resolve ‘the European question’ could lead to “upheaval, forcing a second General Election in late 2015, with all the attendant uncertainty that entails.”

Healthcare

The total number of Ebola deaths is predicted to peak in 2015 according to Patrick Keady FIRM, risk leadership consultant with the NHS. “This will be achieved by continuing with current levels of awareness, actions and plans and by Governments avoiding ineffective knee-jerk reactions. Lessons will be learned from Sierra Leone’s handling of the crisis where 21% of people infected died compared to 60% in Guinea and 42% in Liberia.”

Further 2015 predictions by Keady are as follows:
• “It will be the year more people will say ‘No’ to so-called ‘healthy food’, leading to reduced demand for healthcare in the long term. People can consume up to seven times the World Health Organisation’s daily recommended amount of sugar when their diet is limited to foods such as low fat yoghurts, muesli bars and sports drinks. The debate about processed versus natural food will escalate with the launch of ‘That Sugar Film’ next year.”
• “Drugs and alcohol will both start to be seen as healthcare issues. With 9% of all emergency hospital care being for people with a drug or alcohol problem, 36% of these are from the most disadvantaged neighbourhoods. An increased focus on the health implications of drugs and alcohol will start to benefit the population and, in turn, reduce drug and alcohol-related crime statistics.”

Regulation

According to IRM commentators, new regulation is going to pose risks for companies and company directors in 2015.

Taken together, the 2014 UK Corporate Governance Code and Financial Reporting Council’s Guidance on Risk Management will significantly upgrade the weaponry of shareholder activism in 2015. “Greater corporate governance and risk management education at Board level – including Company Secretaries – will be needed to mitigate against the risk posed by the new regulatory environment,” stated Mark Butterworth.

The Financial Conduct Authority’s drive for greater competence and capability means that Boards of Directors must be far more proactive about ensuring their capabilities match their needs. José Morago commented: “Boards need to identify governance gaps and plug them fast, whether that’s through acquiring new skills, qualifications or experience. What’s expected from Boards is going to be raised quite fast next year.”

Insurance

Reduced profitability for the UK insurance sector is an identifiable risk for 2015 according to Enrico Bertagna, IRM affiliate and senior vice-president of business development at Allied World Europe Insurance.

“If there’s no material change in claims trends or major catastrophes,” outlined Bertagna, “we’re looking at ongoing downward pressure on premium rates, reducing underwriting profits in most classes of business.”

Bertagna also believes we’re likely to see a trend towards the localisation of risk in 2015. “We’ll see less premium flowing to London from emerging markets. That will lead to reduced premium to London market insurers on the one hand, while potentially exposing local market insurers to greater volatility on the other.”

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Securitas Community Awards 2014: The Winners

The fifth annual Securitas Community Awards were presented at the Tortworth Court Hotel in Gloucestershire on Thursday 19 June.

The awards are designed to recognise the outstanding work by Securitas employees during the last 12 months. A number of reward schemes, based on performance and contribution to the community, culminate in the annual awards ceremony.

Winners were announced in nine categories and finalists and invited guests enjoyed listening to stories of impressive acts of innovation, bravery and community initiatives.

The 2014 winners are as follows:

Securitas Community Award: Michael Seggie

Securitas Community Award for Core Values: Karl McLean

Securitas Community Award for Integrity: Christopher Durham

Securitas Community Award for Vigilance: Saif Ul Haq

Securitas Community Award for Helpfulness: Andrew Longbottom

Securitas Community Team Award: Emergency Fire Crew Capability

Securitas Community Award for Innovation: Pete Lidbetter

Securitas Community Award for Leadership: Peter Langley

Securitas Community Award for the Most Outstanding Act: Trevor Thompson

Proud winners of the Securitas Community Awards 2014

Proud winners of the Securitas Community Awards 2014

Commenting on the evening, Securitas’ Chief Operating Officer Shaun Kennedy said: “Tonight is an excellent chance for us to reward and recognise the acts of our people working across the whole of the UK. The company has 16,000 officers. Those here tonight are the ‘Best of the Best’, and every one of them should be extremely proud of their achievements.”

Securitas Good Customer Award 2014

In addition, Marks & Spencer was announced as the winner of the 2014 Securitas Good Customer Award.

Part of the company’s annual Community Awards event, this category is designed to reward those customers who have contributed greatly to an improvement in the standards and perception of the security industry as a whole.

The Judging Panel was chaired by Brian Sims Hon FSyI, Editor of Risk UK, and included Aaron Grant (Head of Security at Aviva UK) who presented the award.

The Judges examined finalists’ procurement strategies, how they work with their security suppliers and how quality of security provision has improved as a result.

Marks & Spencer was judged to have done the most to improve the procurement and effective development of its security services.

Brian Riis Nielsen – Securitas’s Country President and UK Managing Director – said: “It’s very clear Marks & Spencer understands the importance of security to the business. The company understands that, without the significant investment of time, expertise and money in its security provision, the business would be at considerable risk.”

Clint Reid (Head of Corporate Security at Marks & Spencer who received the award) commented: “It really is an honour to win this award. It reinforces our long-standing partnership with Securitas, which is built on a strong foundation of trust.”

Reid went on to state: “We work with Securitas to ensure our training package and development programme pushes the boundaries of delivery. We have worked together to realign its structure to the needs of the customer and to add substantial value to our loss prevention/corporate security delivery.”

Reid continued: “I’m proud to say that, in Securitas, we have a security partner who understands not only what our customers want, but one that’s also able to collaborate on projects and ways of working which deliver significant benefits to M&S.”

Brian Riis Nielsen also stated: “Marks & Spencer’s security strap line is ‘Protecting our People, Property, Profit and Brand’. Without doubt, the company is committed to delivering security excellence. I’m pleased to say that, in partnership with Securitas, Marks & Spencer has undertaken an exciting journey on the way to delivering a revolutionary and industry-leading approach to a total security solution.”

Raising money for excellent charities

The 2014 Community Awards event raised £2,000 for this year’s dedicated charities, namely Help for Heroes and St Teresa’s Hospice.

“Securitas holds a lot of award ceremonies across the 52 countries in which it operates,” explained Brian Riis Nielsen. “However, the UK Community Awards is the only one that brings together our customers, partners and suppliers in the same room to celebrate the achievements of our people. To me, that is unique and something about which we can all be very proud indeed.”

In conclusion, Securitas’ UK leader said: “Our officers often comment that they are just ‘doing what they do’, but they should all go home tonight with their heads held high. I hope they will encourage their fellow officers to believe that it could be their turn next year!”

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Securitas Community Awards: WYPTE wins the 2013 Good Customer Award

The 2013 Securitas-IFSECGlobal.com Good Customer Award was presented on 20 June to members of the highly successful West Yorkshire Passenger Transport Executive (WYPTE) Team.

The Securitas-IFSECGlobal.com Good Customer Award runs as part of the annual Securitas Community Awards. This year’s Awards Ceremony took place on Thursday 20 June in the wonderful surroundings of the Tortworth Court Hotel in Wotton-under-Edge, Gloucestershire and celebrated the ways in which Securitas’ personnel have demonstrated the company’s core values – Vigilance, Integrity and Helpfulness – across the last 12 months.

The Good Customer Award directly reflects the desire to recognise and reward those customers of Securitas whose actions demonstrate a tremendous and long-lasting commitment to the continuing improvement of quality security solutions.

In short, it’s an award specifically designed to reward Best Practice among the client base.

Each year, the Good Customer Award is bestowed upon the private sector organisation or public sector body that – in the view of the Judging Panel – has done the most to improve the procurement – and effective, efficient development – of security services.

It’s also designed to reward those customers who have contributed greatly to an improvement in both the standards and perception of the wider security sector.

Good Customer Award 2013: The Winner

Winner: West Yorkshire Passenger Transport Executive (WYPTE)
Highly Commended: Sainsbury’s, Barnsley Hospital NHS Foundation Trust
Finalists: Centrica, ConocoPhillips, DTZ, Peel Ports, Peglar Yorkshire, University of Hertfordshire

Left to Right: Brian Sims (IFSECGlobal), Jody Booth, Diane Groom and Mick Watson (WYPTE) and Securitas' Darren Read

Left to Right: Brian Sims (IFSECGlobal), Jody Booth, Diane Groom and Mick Watson (WYPTE) and Securitas’ Darren Read

Left to Right: Brian Sims, Mike Lees (Barnsley Hospital NHS Foundation Trust), Paul Smith (Sainsbury's) and Darren Read from Securitas

Left to Right: Brian Sims, Mike Lees (Barnsley Hospital NHS Foundation Trust), Paul Smith (Sainsbury’s) and Darren Read from Securitas

Citation by Brian Sims (Chairman of the Judges): “The victors in 2013 have been working in genuine partnership with Securitas for no less than 14 years. Indeed, security is fully recognised as an integral part of a business that places customer care at the very heart of its ethos.

“Long-standing and hugely beneficial relationships have been developed with the local police, PCSOs and myriad other law enforcement agencies. This is a customer that respects and values both security and its security solutions provider, whom it regards as a security expert and equal partner rather than a mere contractor.

“It’s a client that believes well-trained and educated security officers will enhance the host business. The security function is always represented at Board level. Performance management is continually under review.

“This customer’s approach to doing business is based on a ‘Team of Teams’ – people and their personal development remain at the top of the agenda.

“This customer is extremely pro-active in the wider security arena, with two of its management team participating in the IFSEC Academy at IFSEC International 2013. Training is also paramount, with security personnel actively encouraged to become members of the Institute of Customer Service by way of study and examinations.

“This customer has also enjoyed a greater number of victories than any other company in the inaugural four years of the Securitas Community Awards.

“For these and myriad other reasons, the winner of the 2013 Securitas-IFSECGlobal.com Good Customer Award is the West Yorkshire Passenger Transport Executive.”

The 2013 Good Customer Award was presented jointly by Brian Sims and Darren Read, commercial director of Securitas UK.

A Special Citation was read by Darren Read (far left) on behalf of WYPTE's Mick Watson (second right) who's retiring from his role after many years' dedicated service to the cause

A Special Citation was read by Darren Read (far left) on behalf of WYPTE’s Mick Watson (second right) who’s retiring from his role after many years’ dedicated service to the cause

The 2013 Judging Panel

The Judging Panel for this year’s Good Customer Award was as follows:

Brian Sims BA (Hons) Hon FSyI
(Media Solutions Manager, UBM Live Security and Fire Portfolio)

Mike Cant
(Director, Larch Consulting)

Aaron Grant
(Head of Security, Aviva)

Iain Hamilton
(Executive Director – Corporate Security, Morgan Stanley)

James Kelly
(Chief Executive, British Security Industry Association)

Julie Kenny CBE DL
(Chairman and CEO, Pyronix)

Jeff Little OBE
(Chief Executive, National Security Inspectorate)

In 2013, the Judges were looking for organisations who are pushing the sector forwards. They wanted to see transparent detail in respect of procurement strategies, how customers work with Securitas and how quality of security provision has improved as a result of Best Practice adoption.

The Judges sought to honour those customers that have toiled long and hard to improve the core security business, and those that have made a positive impact on the bottom line of the operation.

There was also a requirement to see evidence of a sound Corporate Social Responsibility agenda. Where is the security operation ‘seen to be green’?

The Judges also wanted to see the delivery of proactive security provision, and evidence of participation within – and a positive impact upon – the local and wider community.

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