An Industry Initiative to enhance excellence in ship operation by setting standards for Corporate Governance

A group of 18 leading ship management companies and ship owning companies (The Sponsor Group) agreed in 2004 to cooperate in order to drive the process for establishing an international standard for KPIs in ship management. The Sponsor Group established that they had unique competence and experience to ensure that the KPI Standard would be practical to use, would give a representative and transparent picture of the performance, and would be economical to implement. The ideas of the Sponsor Group have be en widely communicated to the international shipping industry. It was realized that a standard would only have an impact if it was adopted by the majority of important stakeholders in the industry. Feedback from various sources indicates that the communi cation have established a broad understanding for the necessity of agreeing on a pan-industry international standard for measuring operational performance. The project is an industry initiative to enhance excellence in ship operation by setting standard s for Corporate Governance in ship operation. This will be done by a systematic and scientific approach to the shortcomings of governance in shipping today. Such an approach will form basis for a conversion of the ISMA Code to become best practice guide lines for shipping governance in line with standards from other businesses and industries. The main challenges are to identify and understand the various requirements and expectations from the different stakeholders in the business. How does different st akeholders validate ship management performance, and how can this be expressed in a limited number Indexes? The main technical challenge in the project is how to actually measure ship management performance. A performance indicator hierarchy needs to be built so that a limited number of high level indicators could be calculated based on performance measurements which are standardised and unambiguous.