Safety Management Systems (SMS) is not just for the aviation industry–it has applicability across a wide variety of industries where managing and controlling risk is critical, which means it could have a positive impact on many industries. Consider the following examples:

1. Health Care - In 1999 the Institute of Medicine (IOM) released "To Err is Human," a comprehensive and landmark report on medical errors and patient safety. The report stated that in the US as many as 98,000 people die each year from preventable medical errors.

2. Food Safety - The Center for Disease Control (CDC) reported in 2008 that every year there are 76 million cases of food borne illness in the United States, resulting in 325,000 hospitalizations and 5,000 deaths.

3. Mining Industry - Coal mining companies have successfully thwarted new safety rules that were intended to help prevent a disaster like the one that killed 25 West Virginia miners in April. Top labor and mine safety officials said they were able to stop the new rules by overloading the regulatory system with appeals.

4. Transit and Light Rail - Annual fatalities in transit and light rail exceed commercial air carrier fatalities by a factor of 4-6 (In 2007 there were 44 air carrier fatalities and 188 transit rail fatalities in the US). In the Washington, DC area, METRO has been plagued by a string of accidents caused by system wide problems in train-control technology and safety oversight.

5. Oil Rig Safety - The U.S. Minerals and Management Service documented more than 1,400 offshore oil drilling accidents between 2001 and 2007. It is developing regulations aimed at preventing human error, which it identified as a factor in many of those cases.

All industries have issues with safety, some more than others and some who have had regrettable and unpleasant experiences. In most cases we see an intense, focused and reactive response to the event in hopes of preventing another disaster or accident. It's the way private industry and governments have been operating for decades.

Let's focus on the oil industry and specifically the recent Deepwater Horizon oil rig disaster in the Gulf. If you were inclined to purchase oil stock, you can research how a particular stock stacks up against its peers by pulling up the different companies' earnings growth estimates. You can compare their debt loads, production rates, and dozens of arcane measures of performance. But there's one crucial metric that you'll be hard pressed to find: safety records.

There are safety standards in the oil industry, but there is no way of knowing who is exceeding or missing the safety standards. Who is the safest U.S. oil company?

When valuing stocks, analysts quantify risk, or the likelihood that events that will adversely affect a company's performance will occur (and the impact it will have on shares). For the oil industry, that includes swings in commodity prices, political coups in third world countries, and accidents such as spills or explosions.

When are oil companies trading safety for profits? That is unknown, but there are many who would speculate on that topic–same could be said for other industries like coal mining. Safety risk poses the biggest threat to shareholders. BP investors learned that lesson the hard way. When the Deepwater Horizon offshore rig operating in the Gulf of Mexico exploded and produced a massive oil spill, BP stock sunk 15%, erasing more than $30 billion worth of market capitalization.

BP received a total of 862 citations between June 2007 and February 2010 for alleged violations in Texas and Ohio, of those, 760 were categorized as "egregious willful" and 69 as "willful." Thirty of the BP citations were deemed "serious" and 3 were unclassified. Nearly all of the citations were for alleged violations of OSHA's process safety standard, which is a rule governing everything from storage of flammable liquids to emergency shutdown systems. BP accounted for 829 of the 851 willful violations among all the refiners cited by OSHA during the same period.

At what point are companies, and especially BP, sacrificing safety performance to increase profits--the single most risky and potentially value-destructive strategy possible. Integrating safety into business decisions makes a case for integrated management.

SMS is not an "entity" or "thing," nor will you find it on an Organizational Chart. It is an integrated way of doing business; managing safety, as an organization manages other critical operational and business functions. Safety issues are a by-product of activities related to production/services delivery.

An analysis of an organization's resources and goals allows for a balanced and realistic allocation of resources between protection (safety) and production goals, which supports the needs of the organization. The product/service provided by any organization must be delivered safely (i.e. protecting employees, customers and stakeholders). The normal course of delivering production creates safety issues that need to be managed and it is up to the organization's leadership to balance production and protection.

In the case of BP, the speculation is that production was far more important than protection.

The safe functioning of any organization depends on its overall management. Within this overall management system, the safe operation requires the implementation of a system of structures, responsibilities, and procedures, with the appropriate resources and technological solutions available. This system is SMS.

SMS should reflect the top-down commitment and the safety culture of the organization, translated into the necessary resources and direct responsibilities of personnel involved in the management of major hazards at all levels in the company.

It is generally acknowledged that in high-tech, high-risk and highly regulated environments, safety culture plays a major role in ensuring safety. If management is committed to safety and puts in place safety management systems, effectively implements safety policies and procedures, provides adequate resources, motivates staff, and upholds safety norms through leading by example, the organization is likely to achieve safety targets. This means the organizations need to fully embrace safety culture and operate within the environment of "being informed, trust and flexibility."