Top Management

Accountability for SMS

Prof Patrick Hudson
Leiden University
The Netherlands

CAAS Aviation Safety Forum 2007

Why have an SMS?

The legal reason - compliance

You can avoid or survive prosecution
The practical reason - it works
The ethical reason - you should
The business reason - its good
business

CAAS Aviation Safety Forum 2007

Safety Management System

A system with safety as the goal
Safety is the primary product in Aircraft
Engineering
Policies are about
how safety is to be regarded
what level of performance is to be achieved
SMS defines how policies are to be implemented
SMS must be integrated into everyday business
Not an add-on
Unlike most industrial processes, that have an
attainable target, safety can always be better
Not just a simple extension of the quality
management system
CAAS Aviation Safety Forum 2007

Safety Management System

Safety management is defined as the systematic
management of the risks associated with flight
operations and related ground operations to achieve
high levels of safety performance
A safety management system is an explicit element
of the corporate management responsibility that sets
out an organisations safety policy and defines how it
intends to manage safety as an integral part of its
overall business
A safety management system is a customised and
structured method used by the organisation to
manage the safety of operations and personnel in an
active and integrated manner
From CASA AC 119-270(0)
CAAS Aviation Safety Forum 2007

Safety Management
Systems
A safety management system is a businesslike
approach to safety. It is a systematic, explicit and
comprehensive process for managing safety
risks. As with all management systems, a safety
management system provides for goal setting,
planning, and measuring performance. A safety
management system is woven into the fabric of
an organisation. It becomes part of the culture,
the way people do their jobs.
Transport Canada TP 13739 E (04/2001)

CAAS Aviation Safety Forum 2007

Targets of Management
Systems
The target for a finance system is control of money
(financial risks to the business) and improving
financial results.
The target of Quality Assurance is the control of
process to achieve predictable and desirable results
that meet with the customers and companys
requirements.
The target of a Safety Management System is the
control of operational risks and to provide an
improving safety record.
All of these systems are primarily the business of
Top Management and it essential that they lead, are
committed and involved.
CAAS Aviation Safety Forum 2007

Priorities
What top management considers
important will get done
People see what is really important
by what they see their bosses DO,
not from what they hear them say
Customers are increasingly buying
on safety as well as price

CAAS Aviation Safety Forum 2007

Financial Management System

Company Board
Management & Direction

QA/Safety Management System

Finance Plan

Sets Policy

QA/Safety Plan

Targets & Objectives

Establishes Objectives &

Targets

Targets & Objectives

Budget

Budget

Accountabilities
Levels of Authority

Delivers the Business Plan

Raises and Approves Budgets

Accountabilities
Line Management
Authorities

Procedures

Procedures
Allocates Resources

Checks and Balances

Audits

Accountants

Audit
Findings

Balance
Sheets

Profit/Loss
CAAS Aviation Safety Forum 2007

Compliance Monitoring

Management of Both
Major Loss Generators
Makes Business Sense

Finance Case

Business Case
or Safety Case

Audits

QA/Safety
Committee

Audit
Findings

Measure
Performance

Profit/Loss

Risks
Risks are what organisations and individuals
take
Risks come in many different sorts

Safety risks - accidents large and small

Environmental risks - disasters and clean-up
Publicity risks - bad headlines and all that follows
Financial risks - bankruptcy

Profits are made by managing risk better than

the opposition
Managers are always risk managers, but they
dont always realise what they are doing with
risks
CAAS Aviation Safety Forum 2007

Running Risks
Safety is often seen as taking risks (decision
making), but outcomes are the result of running
risks (action)
The Organisational Accident Model distinguishes
two parts
Running Risks - Individuals at the time
Taking Risks - Organisations in advance

Risks are something we have to take in todays

business environment (but do we have to run
them?)
In a low cost world we have no choice
Risks have to be run without accidents
CAAS Aviation Safety Forum 2007

How do we run risks

successfully?
You have to understand your hazards
You have to have adequate controls in place
to prevent problems arising
You have to have mitigation measures ready
in case things still go wrong
The Bow Tie methodology provides a good
way of understanding this
more this afternoon

CAAS Aviation Safety Forum 2007

Bow--tie Concept
Bow
Events and
Circumstances
BARRIERS

H
A
Z
A
R
D

Harm to people and

damage to assets
or environment

Undesirable event with

potential for harm or damage
Engineering activities
Maintenance activities
Operations activities

CAAS Aviation Safety Forum 2007

C
O
N
S
E
Q
U
E
N
C
E
S

Evaluating risks
You need to decide what level of risk is
acceptable
A Risk Assessment Matrix helps define the
limits of tolerability and acceptance
These limits have to be set by top
management
Top management also has primary
responsibility for ensuring that the
necessary controls are resourced
Neither of these responsibilities can be
delegated lower down in the organisation
CAAS Aviation Safety Forum 2007

Typical Risk Assessment

Matrix
Conse que nce

Increasi ng Prob abil ity

B
C
D

Never
heard of in
industry

Incident
heard of in
industry

Incident
heard of in
company

People

A ssets

Env iron
ment

No injury

No effects

Low
Risk

Low
Risk

Slight
injury
Minor
injury
Major
injury
Single
fatality
Multiple
fatality

No
damage
Slight
damage
Minor
damage
Local
damage
Major
damage
Extensive
damage

Slight
effect
Minor
effect
Localised
effect
Major
effect
Massive
effect

Low
Risk

Rating

2
3
4
5

Low
Risk

Incident
happens
several
times per
year in
company
Low
Risk

Incident
happens
several
times per
year in a
location
Low
Risk

Low
Risk

Low
Risk

Med/low
Risk

Med/low
Risk

Med/low
Risk

Med/low
Risk

Med/low
Risk

Med/low
Risk

Med/low
Risk

Med/low
Risk

Med/low
Risk

Medium
Risk

Medium
Risk

Medium
Risk

Medium
Risk

Medium
Risk

Medium
Risk

High
Risk

High
Risk

High
Risk
High
Risk

High
Risk
High
Risk
High
Risk

The colour determines the level of active risk management required

CAAS Aviation Safety Forum 2007

Taking risks makes money

Classic Economics shows that profits are
made by taking risks
Top management is responsible to the
shareholders and other stakeholders to
ensure the profitability of their company
Risks can only be taken and run if the
management of risk is professional
An SMS provides the basis for effective safety
management
A Safety Culture builds further on effective
safety management, allowing us to survive the
unexpected and operate where others fear to
tread
CAAS Aviation Safety Forum 2007

The Edge
The Edge
Normally Safe

SMS

Inherently
Safe
8%

12%
Normally Safe
The Edge
Safety Culture
CAAS Aviation Safety Forum 2007

15%

Return on
Capital
Invested

Operating at the Edge

Anybody can operate when they have physics
on their side - inherently safe
Most hazardous operations rely upon
technical an organisational controls to ensure
safety
The edge is where it gets interesting
Return on capital invested rises as we go out

8%
Inherently safe
12%
Normally safe
15%+ The Edge
Shareholders want more than 15% return, but are
not prepared to tolerate losses

Failing involves not knowing where you are

CAAS Aviation Safety Forum 2007

So - How do you do it?

CAAS Aviation Safety Forum 2007

Management Systems &

Leadership
Successful management
requires clear objectives, effective
direction, stated plans and demonstrated commitment.

It is almost certain that top management will be involved in

the management of the finances, due to the associated risks.
Top management often delegate the responsibility for
systems such as QA and SMS to allow themselves the
chance to get on with running the business - this is flawed
thinking - safety IS the business
Although named as the Accountable Managers, CEOs often
are not involved and have little knowledge of these systems,
or the problems faced in the workplace (which is why CAAS
insists on SMS competence at the top)
Safety Management should be no different from financial
management
CAAS Aviation Safety Forum 2007

The Core of a
Safety Management System
Safety management is centered round the management of the
risks and hazards
Plan - what are we going to do?
Do - will we actually do what we planned?
Check - do we check that what we planned and did actually
worked?
Feedback - do we learn from our successes and failures?
The Regulator requires proof that these are
In place - we have a system
In operation - we are using the system on a daily basis
Effective - the system is producing measurable
improvements
Permanent - we would still use the system even if everybody
moved out
CAAS Aviation Safety Forum 2007

Benefits of Introducing SMS

Gives Top Management full awareness of the key
risks of the business
Provides the ability to control the potential
safety loss generators that the company faces
A clear & documented approach to achieving safe
operations that can be explained to others
Active involvement of all the staff in safety
Enables top management to demonstrate to the
regulator, its customers and the Board that its
risks are under control

CAAS Aviation Safety Forum 2007

CAAS
The senior management of the organisation led
by the Chief Executive Officer is ultimately
responsible for the entire organisationsa attitude
towards safety. Its organisational safety culture
will depend on the senior managements level of
commitment toward safe operations.
The accountable manager, having full authority
over human resources and financial issues, must
ensure that the necessary resources are
allocated to the management of safety.He or she
has direct responsibility for the conduct of the
organisations affairs and final responsibility for
all safety issues.
Singapore CAAS AC 1-3(0)
CAAS Aviation Safety Forum 2007

Transport Canada - Lessons

Learned
Management support
Industry problem: support required
continuously

Progressive implementation
Entire enterprise, however, start with a
manageable task; dont try and implement a
SMS overnight
Its all about culture - Change the way you do
things before you implement the infrastructure:
its all about culture

Development of performance
measurements
Clear and concise standards
Champions in all areas
CAAS Aviation Safety Forum 2007

Safety Culture
A good safety culture is the embodiment of effective
programs, decision making and accountability at all
levels.
When we talk about safety culture, we are talking first
and foremost about how managerial decisions are
made, about the incentives and disincentives within
an organization for promoting safety.
One thing I have often observed is that there is a great
gap between what executives believe to be the
safety culture of an organization and what it actually
is on the ground. Almost every executive believes he
or she is conveying a message that safety is number
one. But it is not always so in reality.
Carolyn W. Merritt - U.S. Chemical Safety and Hazard Investigation Board,
November 2005
CAAS Aviation Safety Forum 2007

The Safety Culture

Ladder
GENERATIVE (HRO(
SEH (( ((( (( (( ((((((((
((((( ((((
PROACTIVE
Safety leadership and values
drive continuous improvement
CALCULATIVE
(
W (((( ((((((( (( ((((( ((
(((((( ((( (((((((
REACTIVE
S((((( (( (((((((((( (( (( ( (((
((((( (((( (( (((( (( ((((((((
ATHOL
P OGICAL
W(( ((((( (( (((( ((
((((( ((( ((((((

CAAS Aviation Safety Forum 2007

Governance
Governance is about how an organisation is run,
rather than the business
The governance is a primary role for top management

Who reports to whom?

Who is responsible for what?
Are there accountabilities defined?
Where does the Buck Stop?
Are there consequences for failure?

Many of the worst accidents happen to organisations

where everyone believes safety is No 1, but there were
more important things to do first
When things got difficult, safety was always somebody elses
job
That somebody didnt exist
CAAS Aviation Safety Forum 2007

You should have

A board Safety committee
The CEO (or the COO) primarily accountable
for safety
A safety manager/officer who can report
directly to the senior accountable person
(CEO/COO)
The safety manager may also have a main
line report to a more senior manager (e.g.
operations), but can short-circuit to the top
The safety manager is a a good development
position for managers to learn the business
CAAS Aviation Safety Forum 2007

Safety responsibilities TC
example
Accountable executive

Safety Review
Board (SRB)

Director of
operations

Director of
maintenance

Other directorates

Safety services
office

Flight
safety officer
Safety Action
Group (s)
(SAG)

CAAS Aviation Safety Forum 2007

Maintenance
safety officer
Ref. ICAO training
Program

What do other industries

do?
Aviation is actually a latecomer to the field
of safety management systems
Aviation safety has been maintained more
by fear of the consequences and learning
from 100 years of fatal accidents
Petrochemicals and nuclear power
industries have had SMS in place for more
than 15 years (often 20+)
CAAS Aviation Safety Forum 2007

SMS in Oil and Gas industry

SMS has been the industry standard in Oil and
Gas since 1992
Performance has improved markedly since that
time
Companies that have SMS have now generalised
to HSE-MS
The goal-setting regime means that contractors
can be integrated easily into the company overall
safety plan
Most companies insist on SMS even when there
is no regulator to satisfy
CAAS Aviation Safety Forum 2007

CAAS Aviation Safety Forum 2007

Shell EP Safety
performance
LTIF(TRCF (( ((((( ((( ((( (((( FAR ((( 10 ((( (((
16
14

Piper
Alpha

SMS
started

LTIF
TRCF

SMS in place

FAR
best ever

12
10

avg best 5 yrs

avg past 5 yrs

8
6
4
2
0
87 88 89 90 91 92 93 94 95 96 97 98 99 '00 '01 '02 '03

Goal Setting Regimes

Old-fashioned safety regulations defined what to
do and how to do it
Compliance was assessed against these
requirements
ICAO SARPs are examples of this approach
Modern approaches set goals and leave the
details of the implementation to the organisation
Regulators assess compliance against goals
ICAO is now supporting the goal-setting
approach as SARPs are seen as historical rather
than proactive
The A380 and B787 are totally new concepts

This can be used for your own contractors as well

CAAS Aviation Safety Forum 2007

Conclusion
Safety management systems give you control
over the safety risks of the business
In aviation safety is the core activity
Like financial management top management
needs to control how these risks are
managed
Singapores CAAS requires and supports an
approach that puts top management in
charge of their business
The best organisations have SMS in place
without any requirement from a regulator

CAAS Aviation Safety Forum 2007