John Windsor: That is a lesson that we learned recently: you have to have planned maintenance, whether it is your own property or leasehold. When you are a tenant, you have to ensure that you know what the landlord’s maintenance programmes are and that they are doing the job properly. We had an issue a few years ago when it appeared that the maintenance schedule was not as good as we had thought, and we had a major claim as a result. We are, therefore, now looking much more carefully at what landlords do and taking a bit more interest in that.

When it is your own property, budget is important. You have to make people understand, like you said, what will happen if they do not put things right. We have moved a long way from the old days when people assumed that the insurance company would pay for any claims. When you have a captive, it makes it easier to pass on a cost to colleagues at the sharp end. There might be insurance involved, but since it is coming out of our back pocket, it affects everyone’s bonus. Spending £5 might end up saving £1,000.

Val Butroyd: One of the discussions we had was about whether we, as the insurance department, should be putting some money aside in order to say, for example, ‘Here is £500 to fix that pothole’. It shifts the argument, but it does give you an element of control. If you know that, at one store, there has been more than one incident because of a repair that has not been made, we ought to be able to go in and say, ‘That needs to be done now’, and worry later about whether I get the money back from the retailer or whether I pay for it out of my own budget.

John Windsor: If you do not have the budget yourself, you need to be in a position to influence somebody else.

Val Butroyd: The first claim might cost you £100; the second one might cost you £10,000.

Paul Howard: If you go upstream from the claim scenario, the argument with the retailer is sometimes easier if it is about how easy it is to shop in the store. If you pull up in the car park, find a trolley and go over a large pothole as you are trying to enter the store, you are not going to want to come back – you will go to a competitor down the road, and we are all in the position of having world-class competitors. Customers are promiscuous and will go elsewhere, and we will lose them in that way.

Val Butroyd: It also spoils your reputation. It is like going into a store and noticing that the floor is dirty or grubby. You are not going to buy food in a grubby store.

John Windsor: You only need a few stores like that in your chain and that is what people will think.

Paul Howard: A few years ago, at an Institute of Risk Management (IRM) lecture, Clive Woodward gave the example of the Australian dentist, Paddy Lund, who is keen on customer service. In his book, Critical Non-Essentials, he gives an example of a friend who went to a renowned restaurant where it was impossible to get a table for weeks. The friend said that the toilets were quite dirty. When Paddy Lund went to the same restaurant, he found that the room was beautiful, the service great and the food was lovely, but that the toilets did not fit with the rest of the building. For him, the critical non-essential was that the toilets were not quite what you would expect. You then start to question other things about it, so if it is difficult to shop in the store, and if colleagues are surly or uninterested, those are things that will stick in people’s minds more than the fact that the shop has everything that they need.

Another issue that we have all faced to a certain extent is that consumers are becoming much more certain of their own rights. Years ago, if you went to one of our stores on a Saturday morning and all the bread was sold out, it would be your own fault for getting there too late. Now, if there is no bread, the store is considered to be useless, so there is a big difference.

Having touched on planned maintenance, we could not go through today without mentioning global warming at some stage. We experienced more ‘freak’ weather, with the high winds and storms a few months ago. Do you think that that puts a greater emphasis on us carrying out different checks on our stores?

Andrew Bye: That is a good point. We have to make sure that our drains are clear and that car parks are not flooded, so that customers are not prevented from visiting our stores. If it is too hot, even temporary air conditioning would help customers queuing and waiting. Alternatively, it would be nice to give out free water. Things like that might sound inconsequential, but on a hot day it might make the difference between making the experience pleasurable or not. That is not necessarily part of risk management, however.

Paul Williamson: I went to the Business Continuity Planning 4 Retailers conference last year, where every speaker spoke about large-scale incidents. What occurred to us was the need to mitigate risks such as faulty electrics or leaky pipes or roofs, rather than the big issues. We began gaining traction with retailers on such subjects as checking electrics, doing flat-roof surveys and ensuring that pipes are not leaking. You all have very clear ideas about the impact of a store being shut or a distribution centre being closed for 10 weeks for restoration, so our approach is about how we can mitigate some of the hidden risks.

Val Butroyd: That is really interesting, because that makes planned maintenance way more important. If your planned maintenance is up-to-date, you will have done all of that.

Paul Williamson: The other thing that we have been talking to some groups about is CO2 emissions and being carbon neutral, which entails checking the building infrastructure. We can identify whether heat is escaping and can start to do some planned maintenance to correct that too. We are all very clear, not only about the ecological cost of it, but also about the financial cost of heating or cooling premises that do not need heating or cooling.

Andrew Bye: Buildings with a lot of glass just become greenhouses.

Paul Howard: On the food side, you do not need a huge change in temperature to put a lot of chilled products out of temperature, which then have to be thrown away.

Paul Williamson: In our experience, at many of the properties that we attend, incidents have been started by the most innocuous things. About two months ago, there was a small electrical fire at a store in Kent; overnight, the whole building burnt down. Those are the things that we are trying to promote to people to be mindful of, as part of their ongoing maintenance.

Val Butroyd: There was a case during last year’s really hot weather where a store burned down. Rather than arson, it was caused by a discarded cigarette in vegetation next to the store. The fire spread to a climbing plant on the store wall and up into the eaves. During that hot weather, the minute anyone dropped a cigarette butt, it would have set fire to whatever was there.

Paul Howard: On some occasions, due to the planning conditions for our stores in various places, we will have to disguise them in some ways with foliage, which can lead to greater risks of fire. We might need to landscape areas, which could affect the water table etc. Are those specific risks that you will be mitigating?

John Windsor: They are common sense-type issues. It is the same as not leaving wheelie bins up against the building at night. A large part of it is common sense, either in the planning sense or in day-to-day operations.

Paul Howard: If you really want a store in a certain location, and the proviso is …

John Windsor: It could be the financial driver.

Paul Howard: …That it must be shielded from surrounding houses by a particular …

Val Butroyd: You just need to ensure that it is maintained.

Paul Howard: That comes back to planned maintenance.

Val Butroyd: It requires 10 minutes of somebody’s time. One of the projects led by our surveyor is going to be looking at the way we maintain vegetation around our stores.

Andrew Bye: For us, leaks are one of the biggest issues in terms of the injury claims that we receive, with people slipping on wet floors in store. They could be caused by drains that have not been cleared out properly before a heavy downpour; they could be caused by leaks dripping down from the ceiling following excessive rainfall; or they could be caused by water being brought in on customers’ shoes. Returning to the point about giving out free chilled water to customers in stores, we decided we would have too many customers slipping and hurting themselves because people would just leave bottles lying around.

Paul Williamson: Water causes damage so quickly too. Depending on the water pressure, a hole in a pipe can leak 20 litres of water an hour. If that goes unnoticed overnight, that is a major problem.

Paul Howard: In terms of customer claims, the highest level of risk for us would be slips and trips. Colleague claims would be mostly around manual handling. What different strategies are people looking at to try to combat these kinds of issues?

Richard Longster: It is a matter of getting people on the ground to be more aware of what is going on around them to avoid slips and trips, and the management at each store encouraging hourly-paid colleagues to not walk past rubbish in aisles, for example, but to do something about it, or to arrange for potholes in the car park to be repaired. It comes back to creating the shopping experience: you do not want people to come into a store, to see it dirty and untidy, and to find spillages on the floor. It is about encouraging people to be active rather than reactive, and to attend to something when they first see it, rather than leaving it for somebody else to deal with. If everyone thinks somebody else will do it, it will never get done.

John Windsor: It is all about ownership: ‘If you do not do it, X will happen’.

Val Butroyd: One of our regions has a system of sweeping logs, and our claims people liked this because it makes claims much more defensible. The rest of the regions, more or less, have a clean as you go policy. We have had a debate on this, because claims really want us to make the whole of the business use cleaning logs. But if there are only three people in a store at any one time, they do not have the resource to do it, although they will clean as they go. I charted all of this and found no difference in the claims experience – the curve is the same. Some areas were better and some were worse, and it was not the case that the region with the sweeping logs system was the best. As long as clean as you go is done properly, the number of incidents occurring is reducing. The cost of claims is going up, but the number is reducing, because we are managing it better.

Richard Longster: That is when the cleaning logs come into their own. If you can adopt some form of dual system, you have the documentation for when the incident occurred, and another system that will prevent the incident occurring in the first place.

John Windsor: It makes it very difficult if you are in court without a cleaning log.

Val Butroyd: A court would view a small store with one centre aisle differently to a superstore, and rightly so, because what you can do is not the same.

John Windsor: We do both, which we have to, in order to be able to defend our position. The cleaning log does not cut down on the number of incidents, but it does help you to defend a claim.

Richard Longster: A very small store would probably not have a janitor or a cleaner. Somebody may come in early in the morning or in the evening, just to clean the shop, or there may be no one whatsoever and it may be just the responsibility of the manager to organise cleaning with the resource that they have available. It may simply come down to a floor inspection; if you can substitute a floor inspection for a cleaning log, it may give you something to work with.

John Windsor: That is pretty much what our sweeping log is: regular checking of the condition of the floor. If it needs to be swept or cleaned, it is, but it is just a log that states that, at a certain time every day, the floor is clear.

Paul Howard: Another aspect that we might consider discussing is fraud prevention.

Andrew Bye: What has interested me, being new to retail, is a move away from paper vouchers towards electronic vouchers. This is one way of preventing theft and fraud. If books of vouchers are stolen during a robbery, or stolen by staff, it is difficult to invalidate those vouchers. With the electronic vouchers, so far, it has been far easier to manage the third-party fraud aspect, and at the same time, staff collusion has been far easier to identify. Paper vouchers seem to have almost disappeared now.

Paul Howard: Vouchers are quite an interesting topic, since such a huge number are never redeemed, so the question is: how big is the risk?

Andrew Bye: I am more interested in controlling the fraudulent aspect around people stealing them and trying to redeem them.

John Windsor: In effect, stealing vouchers is the same as stealing money.

Paul Howard: Hence procedures for vouchers should be exactly the same as they are for cash, which is what they are, effectively.

John Windsor: Another difficult area is the corporate voucher market. It is probably more difficult to deal with electronically. We sell huge amounts of vouchers through third-party promotions. For example, if you phone one insurer for a quote, you get sent a Marks & Spencer voucher. Another channel which we need to think about is staff incentives, and it is much easier for them to have paper vouchers.

Paul Howard: Perhaps finally we could briefly discuss age discrimination.

Val Butroyd: There are a lot of issues here. I do not know whether we have an older than average workforce, but in areas such as Funeralcare, we have tended to employ older people in the belief that they are more sympathetic with clients. The problem is that they generate more manual handling claims, since they are not young enough to be moving coffins around etc. It has already had an impact on us in terms of the number of claims that we are receiving.

We also have a scheme whereby, if someone is made redundant, they are given two years’ life cover, equivalent to their salary at the time. The proviso used to be up to the age of 65, but now that proviso has gone. We are now making people redundant who are in their mid-70s, but of course the chances of people in this age bracket dying within two years of making them redundant or even while in service have to be greater. Is your experience the same?

Paul Howard: We have 500 colleagues over 65; our oldest colleague is 92, and he did not start working with us until he was in his late 70s. This particular colleague is a ‘trolley boy’ and absolutely refuses to go into the store because he loves being outside and working with the trolleys five hours a week. He retired from his previous job in his mid 70s, but then lost his wife, so he does this for some social interaction.

Along with many retailers, we are positively welcoming over-50s to work in our stores. So far, we have not found it to be such an issue. The tasks that they do have to be risk assessed, because they will not necessarily be doing the same kinds of things as an 18-year-old. However, the same would have to be done for someone who was 4ft tall and someone who was 6ft tall; it is just looking at things in a slightly different way.