INDUSTRY INSIGHT Bud: Lloyd’s Register started in the second half of the 18th Century when a number of marine insurers, based in London, would gather at Edward Lloyd’s Coffee House. During this same time, a system was developed for independent inspection of hulls and equipment in ships that could be used for insurance coverage. In 1760, which is when we trace our heritage, a committee was formed to address insurance issues and in 1764, the first Lloyd’s Register book was published. That book became the origin of the class society because it classified each ship on an annual basis. The hull was classified by A, E, I, O or U and equipment was rated as G, M or B (good, middling or bad) which in time was replaced by the numbers one, two or three. So you may have heard the expression that a vessel is ‘A1’ meaning first or highest class for both hull and equipment. We are the oldest classification society followed by ABS in 1862 in America, Det Norske Veritas (DNV) in 1864 in Norway, and Germanischer Lloyd in 1867 in Germany. LR presently has 246 offices in 180 countries with between 7,500 to 8,000 employees.
Because we don’t have company shares, under U.K. law, the trustees have a personal responsibility to ensure that...we have a significant component of charitable giving... We are a ‘not-for-profit distributing organization’ — we actually just changed our structure to a foundation which is now called Lloyd’s Register Foundation and is a registered charity in London. The Foundation is the sole shareholder of LR Group Ltd. which owns the businesses we have around the world, including LR North America. We’re in the process of setting up Lloyd’s Register Canada as well. As a result of that change in structure, we’re administered by two separate boards — the Foundation board and then a board of trustees for LR Group. Because we don’t have company shares, under U.K. law, the
Making a point. Bud addresses attendees at the Nautical Institute Command Seminar, Victoria, B.C., June, 2011. trustees have a personal responsibility to ensure that we are being driven by our mandate but also have a significant component of charitable giving which we do through a number of different programs — for example, the Lloyd’s Register Educational Trust or our LR250 Initiative which celebrated our 250th anniversary. BCSN: What is the connection to Lloyd’s List or Lloyd’s Underwriting Syndicate? Bud: Lloyd’s Register is only connected to those entities by the name Lloyd’s. We did own LR Fairplay but we diversted ourselves of that involvement a few years ago. There’s confusion because you see the Lloyd’s prefix used for a number of companies and entities — like the Lloyd’s Underwriting Syndicate. They use it because they have some original link back to the Lloyd’s entity in London in the second half of the 18th Century and the original coffee house. As a result, we are often confused with Lloyd’s Insurance and Underwriting Syndicates. BCSN: Could you describe the work that LR does? Classification societies were originally very specific to marine but LR now
is generally divided across four main business streams: Energy — we provide plan approval, surveys, verification and consultancy services to owners, manufacturers, operators, and engineering procurement contractors for both onshore and offshore projects. We have expertise right across the energy supply chain from oil fields to pipelines, refineries, power stations and manufacturing and we provide services from design appraisals to verification during construction right up to commissioning and even verification during operation; Management systems — we offer business assurance services, for example, certification, validation and verification for a lot of ISO standards across the board. Many of our clients (and many of our competitors’ clients) are ISO-certified by Lloyd’s Register Quality Assurance (LRQA) on things like quality, environment, occupational safety and health, climate change, food safety and risk management — for example, we’re the auditors for Mars (the candy bar) for quality assurance. Transportation — we offer a whole range of engineering, risk management and consultancy services for rail November 2012 BC Shipping News 11