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With a decentralized approach to risk management responsibility and global operations at CSL Behring L.L.C. and its parent, CSL Ltd., finding ways to communicate and share information are essential elements of the biotherapy manufacturing firm's risk management program.
Among the approaches John J. Marren, director, global risk and insurance management at CSL Behring L.L.C. in King of Prussia, Pa., and its Parkville, Australia-based parent has used to achieve that necessary level of communication are a regular company risk management conference, an effective risk-reporting software tool and considerable travel.
“We do try to take advantage of both things that have gone wrong as well as things that have gone well at individual sites and try to get those communicated across the group,” said Gregory A. Boss, group general counsel of CSL Group in King of Prussia, Pa., to whom Mr. Marren reports.
“One way to communicate them is through the risk management meetings and conferences that we have and other reporting processes,” Mr. Boss said. “Certainly at the operational level, they have operations meetings that focus on efficiencies that can be applied across the group, and they do touch on risk.”
Upon joining CSL in 2007, Mr. Marren sought and obtained approval for the company's first global risk management conference.
Among those participating in the gatherings are the global general counsel, the chief financial officer, the chief sourcing officer and other senior leaders of the company who gather to discuss CSL's risk management goals and objectives.
“It's very high-level people—a few board members, executive vice presidents and some of the managers of the various operating sites,” said Margarete M. Emery, analyst, insurance and risk management at CSL Behring.
The conference, said Mr. Marren, “continues to evolve. Since December 2007, when we had our first meeting, we've had two subsequent meetings and we're now planning a fourth for this May.”
As with those preceding it, the next two-day meeting will bring together CSL executives from around the world “and continue to advance the (risk management) process across the company,” Mr. Marren said.
“The attendance is just under 30 people, so it's a very concentrated group,” Ms. Emery said. “That's a good opportunity to present new ideas and talk about what's coming up on the horizon.”
The process of communicating risk management goals and objectives—and of gathering input from CSL's various worldwide sites—also involves a fair amount of travel.
“Really, the core of the business is being run from our manufacturing sites,” said Mr. Boss. “John and I travel a lot to make sure we get to those sites because, in his position, he has to be known at the sites.”
Given the extent of CSL's operations, the decentralized risk management approach is widely embraced, as are the structures that have been put in place to share risk management information.
“For me, for it to be anything else than decentralized, with the breadth that we have, would be difficult to manage,” said Ted H. Kanigowski III, senior director of finance, commercial operations at CSL Behring in King of Prussia. “Through the quarterly updates, we can bring forward anything that we want to discuss.”
Trying to dictate risk management from the headquarters to the operating sites is an approach that has been tried and proved ineffective at CSL, Mr. Boss said.
“Before John came on board and even before I came here, there was a structure that had a team—a risk management team—that was physically located here, and they would go out to every site and do sort of an audit on their own,” said Mr. Boss.
“We just didn't think that was as efficient because you have people in the corporate office who would try to identify risks and establish treatment plans, and they only got to the sites once a year, and they had no real hands-on approach. So we abandoned that quickly,” he said.
The alternative was the existing localized approach to risk management, with the headquarters office serving to coordinate risk management activities across the various sites.
“It's very much a collaborative process. I just sort of shepherd it, really,” said Mr. Marren.
“Clearly, I've got ideas, but the process is very much sort of a consensus process so that everybody's part of its development, everybody's part of making sure that it's effective, and making sure that the outcomes and the outputs are relevant,” he said.
In addition, a new risk management software system that CSL will implement this year should further enhance its ability to collaborate across the organization on risk management and share information, Mr. Marren said.
“Is it perfect? No. Will it ever be? I don't know. Should it be? Probably not,” the risk manager said of the company's risk management approach.
“But I think we're doing a pretty good job at keeping it current, keeping it valid for us; and I'm hoping that, with this software that we're bringing on board soon, sometime this year, it's going to give us opportunities to do even more with the process,” Mr. Marren said.
The software, he said, will provide new opportunities to share information across the group, along with a more consistent approach to managing risk.
If “you get an exposure in more than one place that's similar, it gives us the opportunity to see that and maybe try to manage it from a broader perspective,” Mr. Marren said.
“You can also see where there might be other areas of the business that may be influenced. There may be other risks that are influenced that aren't related—at least not obviously related, but (it) may very well be—so that you can see where there may be interaction between risks,” he said.
In addition, Mr. Marren said the software “will give us a better way to communicate risk information, give some people in the company, I think, a better way to view our risk profile more readily than they are able to today.”
Ultimately, Mr. Marren said, “I think it's going to be quite an improvement in how we are able to spread the gospel of risk around CSL.”
The overriding risk management philosophy at CSL Ltd. and CSL Behring L.L.C. is operational risk management, and executing the philosophy involves a decentralized approach passing risk management responsibility to the managers of the companies' various operations.