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How to benchmark your EHS governance: how do you know that you are giving due care to environmental, health and safety matters? It helps to start with a clear picture of where you are.

Article Excerpt
HOW MANY TIMES have you seen a huge sign at a plant entrance that proclaims, "X Days Without A Lost-Time Accident!"? A large "X" might look impressive, but it's no real measure of how the plant is actually performing in terms of environmental, health and safety (EHS) issues.

Focusing on lagging indicators like lost-time accidents, spills, and incidents to predict future EHS performance makes as much sense as using only your rear-view mirror to drive across town. Yes, you want to know what you've hit, but wouldn't you rather see it coming and be able to swerve in time? Or find a shorter and faster way to get there?

Another tactic that substitutes for meaningful metrics appears in annual reports. Stockholders are handed accounts of the nice things that their company is doing--working with a local community or donating wetlands to The Nature Conservancy--but given little or no information about how the company's EHS practices stack up against best practices or industry norms.

Enron has cast a long shadow, and diversionary tactics like publicizing lagging indicators and promoting feel-good projects are no longer sufficient. The real questions are:

* What is the actual effectiveness of your EHS efforts?

* What are your actual risks and liabilities, and how great is your exposure?

* What are the real costs of your current system? Are there nonconformance costs you could be avoiding, market opportunities you are missing, or an image that needs polishing?

* Most important for senior managers and outside directors in today's corporate governance spotlight: Given your current system, is it even possible to find the answers to the above questions?

How do you know that you know?

Corporate governance is a beast...