The LWF Blog

NEW FIRE REGULATIONS: Corporate Governance Issues – Update No. 2

March 28, 2007 4:22 am

(LWF issue regular monthly updates covering topics specific to the implications of the new fire safety regulations on your business operation).

Effects of Fire

Current and proposed fire safety legislation is drafted to protect the lives of those working, using or residing in buildings. It is a fact that in providing the physical measures to ensure safe means for escape, a certain level of property protection is developed by default. This is achieved simply by the introduction of fire compartmentation and in the protection of escape routes. But is this enough when consideration is given to the impact asset loss can have on the business operational activity and the financial well being of the organisation? Fire can cause serious loss to property fabric, building contents and to the on-going operation of the building. It is a sad fact that of those businesses that have suffered serious fires in the past a large proportion fail within three years of recommencing business following the fire even if fully insured. The reason; during the reconstruction and re-equipping of the facility, the firms customer base moves away to alternative suppliers resulting in a situation that is very difficult to reverse.

Risk Management

Increasingly organisations in both the public and private sectors are required to report on risk exposure either as part of their formal financial return process or as part of their corporate management ‘good practice’ procedures. A business no matter how small has stakeholders, this definition is broader than the normal consideration of corporate shareholders as others such as employees, customers, suppliers, financiers and even the environment can be adversely affected by a serious fire loss. Fire remains a serious threat to any organisation and as such it is considered appropriate, and a good opportunity otherwise wasted, that whilst responding to the statutory duty to undertake fire risk assessments for life safety, the remit is extended to consider property and operational process protection.

Fire Safety Management System

As it is certain that Corporate Governance issues remain with the most senior levels of management, the application of measures to reduce the risk of fire is normally devolved down through the organisation. It is imperative therefore that when managers with devolved responsibility design their response to the statutory requirements of fire safety legislation, they consider potential issues beyond the standard advice regarding life safety fire risk assessment. To this end a Fire Safety Management system comes into its own. The system identifies the strategic risk exposures (life safety and asset protection), it defines the devolved responsibilities and means for communication both up and down within the organisation, it ensures that competency is transferred to all those with devolved responsibilities and provides the means to address the specific operational risks that the organisation is exposed to. It further sets the standards for audit and measurement, the end objective to demonstrate.



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