In one of a number of damning conclusions to emerge from the Royal Commission into the Pike River Mine Tragedy, the final report made the statement that “the board did not provide effective health and safety leadership and protect the workforce from harm. It was distracted by the financial and production pressures that confronted the company”. (Royal Commission on the Pike River Coal Mine Tragedy, 2012; p. 18). Various examples were provided of the board relying completely on the management team regarding safety across the business while the board focused their attention on the considerable financial issues facing the organisation.
The Pike River tragedy is a lesson for all boards and senior executive teams as it can be very easy to be distracted by an immediate crisis, often financial, which will then tend to dominate board meeting agendas and board papers. In an organisation where safety is seen as purely the responsibility of management, this can lead to a deepening of the lack of exposure and awareness by the board to the personal and process safety risks facing the business.
However, organisations that value the role of the board in contributing to safety culture tend to take a different approach and understand that high performance safety cultures are directly linked to business excellence overall. It is not a matter of safety or production but rather boards and senior executive teams look to integrate both.
These two examples are each reflecting an approach to safety governance that has been defined in recent research. A five-stage pathway has also been developed to assist move organisations towards an integrated approach to safety.
Identifying your organisations approach to safety governance
Every organisation will identify themselves at a different point on a safety governance pathway, and may find themselves moving backwards and forwards depending on the leaders in place, the emphasis and initiatives to drive safety improvements undertaken, or serious incidents which may have occurred.
It is essential for OHS professionals to identify where their organisation may be at any point in time in order to effectively influence change at the board level and with the senior executive team. To help in this identification process, a five-stage governance pathway has been developed.
OHS professionals might like to consider the following questions as a way of ‘looking in the mirror’ at their own organisation and helping to identify how they can best contribute to safety discussions in the boardroom.
Does your board generally see safety as a management responsibility? Do they tend to become engaged in safety only after an incident has occurred? Do you get the impression that production is the most important issue in the business?
If so, the approach to safety governance in your organisation may be considered transactional and will require safety professionals to work closely with their CEO to help inform and educate the board on the fiduciary responsibilities with respect to safety in the first instance. There is much work to be done and so beginning with an approach that ensures boards are fulfilling their due diligence obligations is often the first step on the journey.
Is compliance with relevant workplace health and safety legislation the main driver of reporting to the board? Is the board focused primarily on ensuring the minimum legislative standards are met?
If so, this approach may be considered to be compliant and will require safety professionals to help boards and senior executive teams understand that moving ‘beyond compliance’ is essential in developing a mature safety culture. As safety professionals know, mere compliance with legislation, while essential, does not ensure that no harm is caused to employees.
Have you noticed board members asking more detailed safety questions, often drilling down into the causes of incidents? Does your board consider site visits an important part of their safety leadership role?
If so, the approach to safety governance in your organisation is becoming more focused. Safety professionals during this stage have an opportunity to educate their boards in more depth with respect to trends data (which often includes the move to including lead indicators). A safety vision and/or safety targets may also be introduced and the board may include safety responsibilities in their charter.
Have you noticed that most of your board members ‘get’ safety? That is, they get that a strong safety culture is much more than simply compliance but requires safety leadership both inside, and outside, the boardroom?
If so, your organisation and your board are becoming pro-active about safety. The board is becoming much more comfortable in their role as safety leaders and will seek even greater levels of performance from the senior executive teams and safety professionals. This is an opportunity for safety professionals to rise to the challenge and provide detailed safety reporting that meets the boards needs and moves beyond mere statistical analysis. At the same time, the personal commitments of the board and senior executive team to safety will be important to communicate.
Does your board seek to understand the safety impacts of every decision being made across the organisation? Does the concept of ‘safe production’ set the tone for board discussions?
If so, your organisation is considered to have an integrated approach to safety. As safety professionals, you will have a tremendous opportunity to embed the view that high safety performance and business excellence are inextricably linked. Safety in such organisations is not just a ‘bolt-on’ issue to be considered on its own but rather is part of the DNA of the entire organisation.
It is essential for safety professionals to reflect on where their organisation is currently situated on the safety governance pathway. This will assist in helping safety professionals to identify the best methods for educating and driving change.
*Originally published in OHS Professional, June 2015
Dr Kirstin Ferguson is a professional company director sitting on ASX publicly listed, private company and government boards. Kirstin was previously the global CEO of a safety consulting organisation operating in the mining and resources industry. In 2014, the Australian Financial Review named Kirstin as one of Australia’s 100 Women of Influence. Kirstin has a PhD in Business focused on safety leadership and safety governance for board members and senior executives, and was awarded the QUT Colin Brain Corporate Governance Fellowship for her research contributions. Kirstin is an Adjunct Professor at the QUT Business School.