History

The ECRI was incorporated in the District of Columbia, USA as a not-for-profit Company in July 2005. This followed two years of deliberations within the E&C Board of Governors of the World Economic Forum (“WEF”) including, most significantly a risk survey and study on behalf of the Board by A.T. Kearney. 

The Study found that billions of Dollars were being lost by Contractors due to inadequate implementation of sound risk management practices and processes at both the enterprise and project level. It was found that the problem was endemic to the industry and, in examining root causes, discovered that despite widespread existence of written risk management processes, practices and procedures, the actual implementation of risk management declines rapidly as projects progressed through their various phases and the processes, in turn, were not well integrated into overall project execution plans nor applied rigorously to project / contract changes where they were most needed. 

This is ironical because the proven, biggest contributor to cost and schedule over-run and margin erosion is the “under-management” of project / contract changes. Clearly, there was generally a gap between the industry’s risks and the then risk management capabilities in the industry. 

The WEF Board of Governors therefore decided to act as a representative group of the E&C community as a whole and do something about what was clearly a serious industry-wide issue. A Task Force was organised comprising representatives of interested Contractors (all WEF members) to examine various solution options and structural alternatives, develop guidelines for complying with competition and anti-trust laws, identify strategies for addressing the major risk concerns and properly educating the industry on both Project and Enterprise risk. 

After considering possible hosting of the resultant “Risk Institute” by the WEF or other existing bodies, the Task Force fortuitously recommended a free-standing, non-profit corporation subject to laws and accepted rules of corporate governance.

two men and a woman in business attire
ECRI Engineering & Construction Risk Institute Sponsor Meeting, Grand Hyatt New York

In its early years, ECRI benefited from the continuity provided by E&C industry executives on the Task Force then transferring onto ECRI’s initial Board of Directors. This included Stuart Graham (former Chairman of Skanska) as ECRI’s first Chairman. At inception, other senior industry executives such as the then CEO’s of Fluor (Alan Boekmann) and CH2MHill (Ralph Peterson) also strongly supported the establishment of ECRI. In all, 17 members of the WEF E&C community agreed to act as founding Sponsors and dedicated both financial and human resources to get the organisation started. 

In mid-2005, Bill Zelle (a recently retired project / operations manager from Fluor) was engaged on a part-time basis and directed by the Board to focus his initial efforts primarily upon what were considered to be the most needed “deliverables” in the area of risk management practices. Preparation of the “deliverables” was accomplished by establishing expert teams drawn from the founding Sponsors’ organisations.

Thus, this first work front was established as ECRI’s early-start priority activity.

A recruitment committee was subsequently set up to find an appropriately qualified industry executive to provide leadership and implement the ongoing development of the organisation which resulted at the end of 2006 in the engagement of Rod Kyle as CEO.

two groups of businessmen talking
ECRI Engineering & Construction Risk Institute Sponsor Meeting, Grand Hyatt New York

During ECRI’s first 2 strategic plan periods (up to 2013), the organisation – and level of sponsorship – grew significantly and a whole series of initiatives were put into place relating to governance, management and core work activities. At that point, sponsorship of ECRI reached a peak of over 40 world-class E&C Contracting Companies, representing a combined revenue of over $200 billion and employing more than a million people. ECRI activity had expanded to its current level of 7 work fronts and strategic initiatives. The governance structure was also enhanced and made more inclusive using the geographic representation model. A notable area of outstanding success established at this time has been ECRI’s unique E&C Education and Training Programme which was launched in 2010.

During ECRI’s third strategic plan period (2014-2016), the E&C industry experienced an unprecedented series of mergers and acquisitions leading to a significant amount of consolidation and, as one sponsor member acquired another, a corresponding reduction in the number of sponsor companies and ECRI revenues. This was compounded by a notable collapse in the oil price in 2015 leading to ‘belt-tightening’ and the departure of some of ECRI’s smaller sized sponsor members as cuts to discretionary spending were implemented.

The third strategic plan sought to target growth in sponsorship by Far East / Chinese Contractors. As things stand, this objective is starting to be realised, and this region remains the largest opportunity to grow the ECRI community going forward.

In 2019 Jon Nield succeeded Rod Kyle as CEO of ECRI and is currently delivering on ECRI’s strategy for the next period, 2020 – 2022, to strengthen and position the organisation for the decade ahead.