Fleet News

Risk management: Communicate or face the consequences

A LACK of communication between fleet decision-makers, their managers and suppliers could cripple risk management policies and end in their failure, according to one industry expert.

With an increasing focus on health and safety and tough corporate manslaughter laws in the way it is vital that fleet managers are clear on what should be included in their risk management strategy.

This can be jeopardised if communication between those involved in implementing a policy such as managing directors, accountants and outside suppliers fails. Ian McKenzie, group business development director at FMG Support, believes that communication is lacking across the whole industry.

He said: ‘There is a lack of willing among suppliers, from insurers to leasing providers and brokers, to communicate with each other and focus on what is best for the customer.

‘Some of the problem lies with the internal structure of the customer. If the fleet manager reports into the commercial director, but the risk manager reports into the managing director, and the finance manager has overall control of budget, how can a stringent plan be implemented?

‘Aside from being unable to properly develop an appropriate strategy, the value that is wasted by ignoring this data is dramatic.’

If communication skills are not up to scratch and important data is lost, both the fleet manager and company heads will find it impossible to understand how accidents affect their business and what can be done about it.

McKenzie said: ‘Through effective communication and as part of a wider risk management strategy, findings such as identifying that accidents could be reduced if a regular meeting on a Monday morning was moved from 9am to 11am, could have an immediate impact on risk and costs. Such tangible illustrations may even help decision-makers see more clearly how this can directly apply to their business.’

As there are no universal guidelines on what should and should not be included in a risk policy, it is up to individual fleet managers to ensure that they are well informed and knowledgeable on risk issues.

McKenzie said: ‘There is an uncomfortable realisation that there is no universal blueprint for implementing a risk management strategy. A distinct lack of understanding about what ‘risk management’ actually means, coupled with limited knowledge on what practical measures need to be put in place, has led to a state of confusion and a worrying level of apathy throughout the industry.’

McKenzie believes that many fleet industry professionals remain stagnant in implementing a robust risk management strategy.

He said: ‘There are a plethora of issues involved with risk management. But if a holistic approach is not taken where each entity is considered on its own merit, then any risk management strategy will be compromised. For example, a leasing company could bolt on incident management as part of an overall deal, thereby tempting the customer into making a commodity purchase, rather than viewing accident management as a fundamental part of the risk management strategy.’

To combat problems of communication and implementing a sound risk policy, McKenzie says the key lies in bringing all parties together under the same roof.

He said: ‘A team-based and communicative approach is the only solution in developing a robust risk management strategy. The industry can no longer ignore or devalue such an important concept. It should not even be viewed as essential because you are forced to by legislation, but as a fundamental responsibility for all businesses that is at the core of corporate culture and practice.’

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