Risk Management in the Face of Uncertainty
With the pending reduction in regulatory oversight personnel in the United States, particularly in manufacturing industries (including specialty chemicals, petrochemicals, automotive, ceramics, food & ag-chem, plastics, pharmaceuticals, and oil & gas), the continuing need for senior expertise in Risk Management has never been more critical. As agencies like the FDA, OSHA, and the EPA potentially face resource constraints and fewer external auditors for monitoring safety and risk compliance, industries must take on greater responsibility to ensure that their operations adhere to existing safety standards. Senior experts in Risk Management are crucial for proactively identifying potential hazards and vulnerabilities, assessing operational risks, and ensuring that safety protocols are not only followed but optimized for the evolving regulatory landscape.
In the absence of frequent and detailed inspections, the onus falls on the companies themselves to maintain a culture of safety and risk mitigation. The chemicals and oil & gas industries have a rich history of Managing Risk (via adherence to OSHA PSM, EPA TSCA, SOCMA, ISO, AICHE (CCPS), API Standards, and many engineering, design, and operational safety standards already in place) that is expected to continue, while additional executable skills in the field increase in demand. Senior risk managers, with their wealth of experience, are essential for developing robust frameworks that can withstand regulatory scrutiny. These experts are adept at recognizing emerging risks, implementing corrective actions, and creating contingency plans that address the unknowns that may arise due to less stringent oversight. Their role becomes even more significant when regulatory bodies are understaffed, as they ensure that internal policies align with evolving legal requirements, preventing costly mistakes and potential disasters.
The major influencers of Risk Management programs fall into 3 categories:
1. C-suite leaders, particularly if there has been an incident in their past. Quite often by edict. Generally, these are the individuals that would be approached in a Risk Management Change initiative.
2. High level HSE & risk leaders that have jumped to new companies and are pushing for more activity, best practices, and performance.
3. Industry-wide conferences are well attended and share best practices, new standards, and regulatory and governance impacts from around the country within the manufacturing industries.
At The Chatham Group, we have intimate connections at each level of these three key industry influencer segments and have placed individuals throughout the risk management hierarchy. We believe that key risk management roles within the manufacturing sector will likely flourish under the new administration. Our team has excelled in placing strong Risk Management and Regulatory leaders into multiple positions across the industries we specialize in, and we attribute that success to the “hands-on” regulatory expertise our recruiters gained from their careers in industry. Leveraging that background, we recently placed a Senior Regulatory Director at a specialty chemical and commercial / retail fabricator who had the requisite Risk Management profile & experience to usher our client into excellence in that arena.
Many companies also employ outside Risk Management experts that are from niche organizations that provide specific services. These adjunct service groups are also expected to grow, as companies turn to them for assistance on dealing with regulatory change. Industry consortiums and conferences create a solid opportunity for risk management idea exchange.
And why is this renewed focus and investment so important?
The chemicals, petrochemical, plastics, pharmaceuticals, and oil & gas sectors are inherently hazardous, dealing with complex processes and materials that require rigorous oversight. Without adequate regulatory monitoring, companies may unknowingly compromise their own safety standards, leading to accidents, environmental damage, or legal repercussions. Senior Risk Management professionals can bridge this gap by continuously evaluating and improving safety procedures, conducting regular internal audits, and fostering collaboration with regulatory agencies when necessary. Their expertise can ensure that the company remains in compliance, even when the number of regulatory inspections is reduced. At the State and local level, regulatory activity may be advanced and expanded (such as CA Prop 65) due to cutbacks at the Federal level. With potentially rapid changes at those levels, companies need to have individuals adept at distinguishing new regulations and adapting their processes therein.
In essence, senior Risk Management leaders play an important role in liaising with regulatory agencies such as the FDA and OSHA, whose inspectors may be fewer but whose expectations remain high. With less frequent audits, these agencies rely on companies to maintain transparency and integrity in their operations. Senior experts can build strong relationships with these agencies, ensuring that the company is prepared for any audit or inspection. Their experience enables them to navigate complex regulations, respond efficiently to inquiries, and maintain clear communication, which ultimately reduces the risk of fines, sanctions, or reputational damage that could result from non-compliance.
To be certain, as the regulatory environment changes and the number of inspectors diminishes, the demand for all levels of Risk Management professionals in the manufacturing industries will continue to rise. These experts are crucial for ensuring that companies maintain robust safety protocols, comply with evolving regulations, and manage emerging risks effectively, even in the face of fewer external audits. By fostering strong relationships with regulatory agencies and driving internal risk management strategies, senior leaders can protect their organizations from potential legal, environmental, and financial consequences.
At The Chatham Group, we are prepared and well connected with all tiers of professionals to help fulfill Risk Management leadership needs as they arise.
Michael J Mueller
Recruiting Director, The Chatham Group