A Centralized or Decentralized EHS Compliance Program?

A version of this article was first published on the Enhesa Blog on 21st May 2019.

Is Your Approach Centralized or Decentralized?

Companies tend to have one of two different approaches to managing EHS regulatory (or "legal") compliance: They either have a “centralized” or “decentralized" program.

Companies that have a centralized approach to managing compliance with environmental and health & safety laws typically take a global view on compliance. They will have a corporate/global EHS function whose role includes the supervision of proactive compliance with local EHS laws across all company locations. This will usually involve the use of a standardized tool, in multiple languages, enabling pro-active compliance management across the business.

In companies that have a decentralized approach to managing compliance, we often hear the same reasoning: “The sites know the law and know best how to manage compliance with those laws; we don’t need to know or get involved.” Those companies will have a disparate number of local solutions of varying levels of quality, coverage, regulatory support and advice. These will typically only be in the local language of the site/country in question. There is little or no corporate supervision or management. With this approach, it is nigh on impossible to generate accurate or consistent compliance data or statistics across sites. This approach may save the cost of having a corporate EHS compliance program. It may give sites a bit more autonomy on the approach they wish to take. It might be “the way things have always been done”— and therefore be the approach site staff are familiar and comfortable with.

Decentralization? No.

However, what a decentralized, local-only approach will not do is:

• Make it easier to instill a global corporate EHS compliance culture (or even start to develop one);
• Give a global, coherent and reliable view on EHS compliance performance and liabilities;
• Enable (internal and external) reporting on compliance performance, as well as compliance bench-marking and data analysis;
• Allow site or company-wide collection and analysis of compliance metrics and data – enabling internal and external bench-marking and performance reporting;
• Provide greater confidence and peace of mind that you are taking the right steps to be compliant in any given location;
• Give individual site-locations the impression that compliance with EHS laws is taken seriously across the company; and
• Allow the pro-active management of EHS compliance risks, globally, before they become an issue.

Best Practice: Global Oversight with Local Expertise

A global outlook on corporate EHS regulatory compliance does not mean taking responsibility away from local site knowledge and expertise—far from it.

A corporate EHS function guides, inspires and gives weight and ownership to on-site personnel working in the field. “Everyone is a leader” is a phrase I have often heard, and in this context it is particularly apt. It is just as much the case for your EHS compliance program. Provide a tool, knowledge and support that can be used equally effectively at corporate, regional or site level - and everyone benefits.

It is hard to justify NOT taking a global view while leveraging local knowledge and expertise every step of the way. One global compliance approach across your company is possible.