On Friday, BP agreed to pay a $4 billion penalty to settlecriminal charges related to the Deepwater Horizon oil spill in theGulf of Mexico in 2010, which killed 11 workers and sent millionsof barrels of oil into the Gulf. An article in the AustralianFinance Review argues that the fine should spur companies toreassess their companies' risk management procedures andculture.
|Ben Balot, chief risk officer at Origin Energy in Australia,notes that Transocean, which operated the oil rig for BP, was veryfocused on managing such risks as injuries to workers. In fact,senior managers were present on the rig the day of the explosion tocelebrate zero lost time over seven years. But they missed the riskthat led to the disaster.
|Balot says that just as the financial crisis increasedexecutives' financial literacy, the BP disaster should boostawareness of operational risks, such as damage to the environmentand personal injuries.
|See the full story here.
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