2 Cairn workers in white hardhats

Governance

We maintain high standards of corporate governance and responsibility, which are critical to help us demonstrate value and success. They are embodied in our daily operations, as our licence to operate depends on transparent relationships with governments, communities, partners, shareholders and contractors. We understand and manage risks and report on material issues.

2015 highlights

  • We revised our Corporate Responsibility (CR)-related policies and Business Principles and included greater emphasis on major accident hazards, accounting for the latest EU Directive and UK regulations.
  • Our CR Management System (CRMS) was substantially redrafted to align with the International Association of Oil & Gas Producers (IOGP) Operating Management System.
  • We improved alignment of the CRMS with Cairn’s Operating Standards and our Internal Control and Assurance Framework.
  • All actions from the 2014 Management Review were rolled into our 2015 CR objectives.
  • Our CR Standard Operating Procedures were completed and included in the CRMS.
  • The UK and Norway Region continued to strengthen links from their management system to the Corporate CRMS in support of their application for operating status in Norway.
  • Procedures were put in place regarding compliance with changes in UK tax governance requirements.
  • We applied our CR Project Delivery Process (PDP) requirements consistently in all operated projects.
  • Crisis and emergency procedures were revised and training given.
  • Our anti-bribery and corruption training was refreshed across the Group.

2016 objectives

  • Continue to streamline our CRMS as we further improve transparency of our materiality process and reporting.
  • Further rationalise our CR guidance documentation in support of the revised CRMS.
  • Review our Policies and Business Principles.
  • Review conformance with UN Global Compact, UK Slavery Act 2015 and sustainability goals.
  • Improve our CR application across all aspects of the oil and gas life cycle within the Cairn PDP.
  • Review the CRMS against the Environmental Management Systems in line with OSPAR requirements.
  • Further review of aspects of our crisis and emergency management scenarios, including business continuity.

Corporate Responsibility (CR) and risk management

Cairn has developed a comprehensive system of policies and procedures to ensure that our operations meet our CR objectives, with clear ownership and assurance provision.

  Responsibility Assurance provision
Core values
Building respect
Nurturing relationships
Acting responsibly
PLC Board Executive Team
Business Principles
CR policies
Health, Safety & Security Policy
Environment Policy
Corporate Social Responsibility Policy
HSE Culture Framework Management Team Senior Leadership Team
Management Systems and Corporate procedures
Corporate Responsibility
Business Risk
Anti-Bribery and Corruption
Management Team Audit Committee
Risk Management Committee
Senior Leadership Team 
Project Delivery Process
Identify – Why?
Assess – How?
Define – Ready?
Execute – Finished?
Evaluate – Learn
Management Team Project Gatekeepers
Functional Department Heads
Project deliverables
Procedures
Risk and impact assessments
Management plans
Emergency response plans
Asset Management Functional Department Heads
Risk Management Committee
Training and awareness Asset Management
Functional Department Heads
Management Team
Senior Leadership Team
Monitoring and reporting Asset Management Functional Department Heads
External Report

Board and Directors

CR governance at Cairn is headed by the Board. The Board’s role is to oversee our CR policies, refining them when necessary, and ensuring that effective management systems are in place to manage any CR risks. With our emphasis on safety, all levels of the business are involved in monitoring risk.

CR performance is a standing agenda item at 100% of Board meetings, and CR considerations through the due diligence process are integrated into 100% of investment proposals submitted for a Board decision.

In addition, key or emerging issues may merit particular consideration. In 2015, reports were made to each Board meeting regarding performance and status of health, safety and environment (HSE) and CR. The Chief Executive engaged the Chairman regarding fundamental health, safety, environment and security (HSES) indicators within the industry and their interpretation. A risk awareness workshop was held with the Board in December 2015, and the outcome was used to inform the corporate risk register; this included HSES/CR matters and in particular operation risks from the Group. In addition, our risk appetite statement was revised in 2015 to reflect the changing business environment.

The process of identifying, assessing and mitigating risks is defined by our Business Risk Management System (BRMS), which is monitored by the Audit Committee and the Group Risk Management Committee on behalf of the Board.

Below the Board, Regional directors are responsible for operations at a regional level, supported by our HSE personnel, who administer the necessary regulations and permits, and develop and implement any specific asset CR plans. Our employees also play an important role ‘on the ground’, reporting any actual or potential risks.

Simon Thomson, Chief Executive, is accountable for providing assurance to the Board on issues around HSE. This is partly done through Cairn’s Senior Leadership Team, which Simon chairs. The Group HSE Manager reports directly to the Chief Executive.

Senior Leadership Team (SLT)

Made up of senior managers, the SLT oversees and reviews performance of CR across the Company and operationally and looks for improvement by practical measures. A standing agenda item toward the year end is the Management Review, which allows the SLT to review the effectiveness of HSES/CR performance, materiality review and proposed changes to the CRMS, and objectives for the following year.

The Management Team (MT)

Made up of 10 senior managers, the MT is responsible for delivering Cairn’s strategic objectives and business plan. It also ensures that all work programmes are executed responsibly and risk management is fully integrated, particularly in relation to new ventures. It is responsible for implementation of the CRMS in the regions, assets and projects by application through line management. Routine performance and progress of incidents and issues are tracked and improvements identified.

Corporate Responsibility Management System (CRMS)

In 2015, our CRMS underwent a major update, including all mandatory elements. The revised CRMS continues to draw on a number of international standards (ISO standards) on health and safety, environment and social responsibility, and improves alignment with the latest International Association of Oil & Gas Producers (IOGP) Operating Management System good practice guidelines.

The revised CRMS consists of three mandatory components: our CR policies and Business Principles, which embody ‘what we stand for’; the CRMS Framework of Standards, which defines ‘how the business works’; and Standard Operating Procedures, which are the requirements for ‘how we deliver to the standards’. Certain components are supported by good practice tools in the form of CRMS guidance.

Our CRMS plays a vital role at each stage of a project’s life cycle in order to maintain our licence to operate across the Group. This includes all projects applied via the PDP but also in all other Group business and office activities. In this respect, we improved linkages and transparency with our UK and Norway Region’s management systems in support of their application to become an operator in Norway. Their application was submitted and approved.

As part of our continuous improvement programme, we revised our Crisis and Emergency Response procedures to provide appropriate support for projects and activities across the Group. In 2016, we plan improvement to management procedures for specific types of crisis and emergency, including quarterly crisis and emergency exercises.

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