Shift in H&S governance needed – from compliance to principles-based leadership

A panel discussion with Garth Gallaway, Mike Cosman MInstD and Sarah Ottrey CFInstD, and facilitated by Francois Barton MInstD at the IoD’s 2024 Leadership Conference, noted that catastrophic failure events provide a legal, ethical and moral imperative for everyone to learn from.

However, experience in New Zealand suggests we have failed to take lessons from the numerous fatal health and safety incidents of the past 14 years because our national performance record has stalled since 2010.

This is despite new health and safety legislation introduced in 2015, and considerable efforts and expenditure made by all involved to improve performance. The panel considered the possible reasons for this, and how New Zealand’s flatlined health and safety performance could be improved.

When asked if further law reform was now required, the panel cautioned against wholesale legislative changes, while acknowledging there was room to improve.

Barton theorised the poor performance may be the result of a leadership gap, and challenged all directors to consider what they could do better to improve outcomes.

A key theme to emerge from the session was shifting from a compliance-based regulatory adherence approach (and the avoidance or minimisation of liability) to a focus on a principles-based system.

Looking at the board’s role in health and safety, the panel considered whether directors were focusing their attention on the right matters.

Key observations to assist directors included:

Understanding risk is a key concern – carefully assess risk, and how you communicate it to others
The timing of disclosure of risks is very important – communicate information early
Boards must be clear about risk in their organisations and not hesitate to obtain expert ‘independent’ advice to assist them

Boards also need to consider a wide range of risks – acute, chronic and catastrophic. They should not be limited by a ‘business as usual’ mindset, but take a broader view, be curious, and consider wider potential outcomes. Boards should avoid maintaining the status quo and look for opportunities to create improvements.

The panel observed that best practice health and safety governance includes:

A board focus on risk and risk appetite will lead to improved outcomes for health and safety. This includes embedding a wider culture of trust and engagement
Leadership that is both curious and visible, and seeking continuous improvement, will result in a thriving, resilient organisation
Consideration of duties extends beyond legal liability and regulatory compliance, to a reputational and credibility issue
The best organisations embrace risk, then look to manage and control it appropriately – they are not risk averse and don’t try to deflect risk to others
Boards should be leading the shift away from a risk averse, avoidance-of-liability mindset, to utilising their influence to create positive outcomes

Directors should be asking:

What can I do to support my organisation to deliver safer outcomes, and protect our people?
Are we doing enough to keep our people safe?
Do we have a clear enough idea of what success looks like in health and safety?
What are the critical risks for my organisation?

The board should focus on the organisation’s purpose, developing a vision of success, a plan to achieve it safely, and how to measure its performance.

What else should directors be doing?

They need to lead and develop a strong purpose and health and safety culture, but they also need to be aware of their business.
The board needs to exhibit ‘tone from the top’ – and actively encourage near-miss reporting. It should act on this information, reflecting on improvements that could be made, but also what worked to prevent a fatality or catastrophic event.

The final tip from each panelist for leading better governance of health and safety, included:

Understand your business risks, how the business is managing them, and ensure you’re comfortable with the process in place. If not, do something about it! Be brave, be courageous
Directors must remain curious and sceptical and not accept things at face value, and keep asking deep, penetrating questions
Consider the ethics and common sense you can apply to your organisation

Summing up, Barton noted boards need to be courageous, ask key questions around risk, look at the work, and put your ethical hat on, as well as your legal one.

Further reading