Health and safety reforms: why directors must still hold firm

Compliance is always important and should always be a key focus for directors. But it would be easy to get distracted by the current reforms and lose sight of the bigger picture.

Minister Brooke van Velden’s series of announcements on health and safety reforms signals a shift in approach. For some directors and their organisations, proposed changes will lessen compliance costs; for others, they will increase. Either way, it is unlikely to reduce director accountability and influence.  

Legislation is, and always will be, the lowest bar that organisations and directors need to meet to avoid being penalised by the regulator or the courts. But the opportunity to add value through health and safety (as part of ESG) remains.

The most directly relevant change for IOD members will be clarity about the application of due diligence obligations. This will be helpful to both directors and their executives who have consistently found this hard to navigate.

Easing compliance requirements for small, low-risk businesses and encouraging a sharper focus on the risks that truly matter makes sense. On the face of it, this seems like a no-brainer – something we could and should get behind. 

However, the examples of changes cited as ‘health and safety gone mad’ are curious. Signs for handrails and hot water are not legal requirements – more likely a symptom of a business not getting competent advice and unintentionally overcomplying. 

In the same example, not needing to manage psychosocial harm was touted as reduced compliance. Harmful stress and bullying at work can happen in retail and hospitality as easily as construction and forestry. New Zealand recently had a high-profile and tragic suicide in a sports organisation that would likely be deemed low risk.

The ability for industry to own and lead sector-wide safety through developing Approved Codes of Practice (ACOP) can potentially be a big success – it has been done before in HSNO and Adventure Activities, albeit with mixed results. 

Missing from the announcement was who will pay. A previous review of WorkSafe estimated the agency would need an additional $20 million to update and maintain its guidance and ACOPs. 

Completing the suite of regulations envisioned by the previous National government would likely cost MBIE about the same amount on top. If these costs are now being passed to private industry, that would be a significant increase in compliance costs. 

Exempting land use owners from obligations will be an interesting development to watch. It shifts the liability and compliance to the operators using the land. Presumably, the horse-trekking company used as an example will have to build and maintain safe infrastructure, such as bridges across creeks, on the owner’s land? 

And lastly – road cones. Sigh. Road cones are often not there for worker safety. They are widely used to keep areas clear of vehicles and people – for example, when councils want to keep the public off the grass while it is being reseeded so maintenance can be done. 

That is also often why they appear on our roads: before work begins to keep the road free of parked cars for resurfacing and after work to allow tarmac to dry. Making this about worker health and safety is a distraction – unless, of course, you are the director in a roading-related business.

The bottom line is that directors still need to apply good governance that ensures focus, competence, proportionality and care in how their organisations manage risk. Whether you do this for compliance, ESG reporting or simply because it is the right thing to do is secondary.

One last thought: the government has said businesses should not need consultants for health and safety compliance. Naturally, we disagree. How many organisations would forgo using accountants to meet its tax obligations and support better financial outcomes?