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How to engage boards in safety

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Craig Donaldson

Safety is an important component in board governance, and OHS professionals play a critical role in this process. Craig Donaldson speaks with Dr Kirstin Ferguson, company director and winner of the Eric Wigglesworth OHS Education (Research) Award, about this and how OHS professionals can get ahead in business.

How can OHS professionals best develop credibility and build profile within their organisations?

OHS professionals are the thought leaders and internal experts for health and safety within their organisations.

Frequently, however, OHS professionals find themselves primarily focused on, for example, collating and analysing

incident data, overseeing safety investigations, ensuring timely close out of corrective actions or conducting safety observations. For those OHS professionals, the administration of health and safety can often make it challenging to find the time and space needed to add value to the senior executive team and board at a more strategic level.

I have been fortunate to work with some of the leading OHS professionals in the world. The common trait all of them have had was the ability to recognise the strategic importance of health and safety to business excellence, and understanding that while there are numerous health- and safety-related administrative tasks that need to be undertaken every day, the real value they can add lies elsewhere.

In my opinion, the most effective OHS professionals I have worked with bring to their interactions with senior executive

teams and boards an understanding of the context in which the organisation is operating. That means that they understand the impact of volatile commodity prices on their business. They understand the level of distraction (and therefore potential impact on safety outcomes) that a potential divestment (or acquisition) will have on employees. These OHS professionals are aware of digital disruptions impacting their industry and the ways such a disruption can be leveraged by the organisation to have a beneficial impact on health and safety.

In my experience, those OHS professionals who can add value to an organisation through understanding both the strategic context in which their function operates, as well as the broader environment in which their business is functioning, are better equipped to develop credibility.

One way for OHS professionals to understand how they can best add value is to put themselves in the shoes of their CEO or the board and ask themselves what information they would want to hear from the internal expert in this field during each interaction. It is also important for OHS professionals to learn and understand as much about the business and the industry in which they operate as possible. Credibility will follow from being able to participate and add value in business discussions with other leaders beyond focusing solely on the health and safety function.

What is the best way for OHS leaders to engage their boards in safety?

In a board meeting, all issues compete for the board’s attention. While I would expect that most boards understand and acknowledge the importance of health and safety on their board agenda, I also understand that at any given meeting there can be a multitude of incredibly important issues to be discussed and decisions to be made.

The best presentations I have seen from OHS professionals to boards or senior executive teams make health and safety relevant and interesting. There was one board I sat on as a director where there had been a particular hazard that had

been raised in a board paper to discuss. We had a discussion about the hazards based on the description in the monthly

board report. As we were relying on words to explain a very technical task, it was difficult for board members to really

appreciate the risk while sitting in a boardroom in the city.

The following month, the OHS professional presented to the board during their monthly report the same task but explained using a video as it was being undertaken by an employee. It is fair to say that a much more robust discussion was able to

follow, with the board having a much better understanding of the mitigation strategies being introduced.

OHS professionals should work closely with their CEO and board on getting reporting right. It is essential that health and safety reporting focus on the right metrics and commentary, since the discussion that follows will reflect the report. For example, if your reporting focuses primarily on lag indicators then the conversation will most likely focus on minor personal injuries including slips, trips and falls, rather than the significant near miss that also happened during the month but which either wasn’t included in the report or was not even captured.

Often, I hear OHS professionals incredibly frustrated by the low-level discussions during board meetings where disproportionate time is spent on minor incidents. In almost all cases, the reason for that usually comes back to the reporting template being used.

How can OHS professionals be considered for board roles themselves?

Board directors require a range of skills, so the first thing I remind anyone who is looking for a board role is that it is not enough to, for example, bring only health and safety skills and experience to the role. While an understanding of health and safety is increasingly important for all directors, it is not on its own likely to be sufficient for you to obtain a role on a corporate board.

As examples, corporate and commercial experience, financial literacy, the ability to contribute to strategy development and understanding how to identify and manage risk are all additional skills every director, or aspiring director, needs to be able to demonstrate.

There are various ways you can develop your skills in these areas, including successful periods in line management roles with P&L responsibility as well as undertaking the AICD Company Directors Course. It is also important to determine whether a board role is something you want to do while also in full-time employment. If so, many organisations have restrictions on the kinds of boards full-time employees can join, which may need to be explored.

Anyone looking to join a board might like to ask themselves the following questions:

1. What kind of board would you like to join?

There are many different kinds of boards, such as publicly listed companies, private companies, non-profit organisations, advisory boards or government boards. While there are similarities across all of them in terms of directors’ duties, there are also a lot of practical differences that are important to understand.

2. Have you got the time to commit to a board role?

This will be particularly important if you are in full-time employment. Taking on a board role requires a considerable investment of time and focus, so be sure this is something that you fully investigate before accepting a role.

3. What value can you add to a board?

This is often one of the harder questions to answer, particularly if you are currently in full-time employment. It is essential to think about the skills you can add as a board director and not as an executive. Many of your current hands-on skills will not be required as a board director where the ability to think strategically and take a hands-off approach will be required.

The practical steps to consider are to start expanding your networks, let people in your network know you are keen to be considered for board roles, explain the value you will add as a board director and put together a CV that focuses on the skills you will bring to the board, rather than a CV you would use to apply for an executive role.

How will safety reporting and KPIs change in the future?

In terms of internal reporting to the board, I am seeing a much greater focus on the quality and meaningfulness of reporting across many boards, regardless of industry. As the safety governance approach of an organisation matures, so too does the expectations and knowledge of those receiving the reports. As board directors become more familiar, knowledgeable and experienced in reading and analysing health and safety reports, I would expect that we will continue to see a reporting quality increase. There is a tremendous opportunity for OHS professionals to be working on enhancing safety reporting for their boards to assist in this process.

In terms of external public reporting of safety outcomes, I believe there will be an increasing demand for transparency around KPIs linked to safety, especially for public companies. Many institutional investors are already focusing on health and safety disclosures of publicly listed companies, and I expect that trend to continue.

During my PhD research I analysed 10 years of safety reporting in the annual reports of ASX200 companies. I found

that the disclosure of safety statistical information, for example, increased from 29 per cent of all companies in 2001 to 67 per cent of all companies by 2011. Upon closer analysis, however, the quality of such disclosures can vary immensely and is very rarely comparable between or within industries. Just as board safety governance processes and reporting is maturing, I suspect the level of public disclosures will continue to mature as well. I would certainly hope that in the near to medium term we will start to see some agreed standards of reporting which will allow for some level of benchmarking that isn’t so reliant on lag indicators such as LTIs or TRIFR.

What are the best development options for OHS leaders looking to get ahead in business?

First and foremost, I am a great believer in saying yes to opportunities as they present themselves. If, as an OHS professional, you are offered the opportunity to work outside of your function for a period of time, or you can take on additional line management responsibilities, these are great opportunities to consider. The broader the corporate and commercial skills and expertise you can develop throughout your career, the more likely it will be that you are offered further opportunities which will allow you to expand your career path and options.

I am also a great believer in seeking out ways to continue further education. While not everyone will want to pursue formal tertiary education, the more senior you seek to become in your career the higher the expectation is that this is a path you have followed. MBA programs can be a great way to expand your corporate and commercial knowledge base but are certainly not the only option .Completing the AICD Company Directors Course can also provide an excellent overview of how an organisation governs itself at the most senior levels and will start to provide you with knowledge and experiences beyond your OHS function.

Other opportunities – such as speaking at conferences or events, networking with industry colleagues outside of your organisation or developing an online professional profile so you can engage with health and safety colleagues around the world – will all help to raise your profile so that further professional development opportunities may be offered. It is very easy to get caught up in the day-to-day pressures and activities of the business you are in. My advice would be to expand beyond those walls whenever you can to engage and interact with others. Doing so will ultimately develop your credibility and further your professional development opportunities.

Dr Kirstin Ferguson is a professional company director on ASX100, ASX200, government and private company boards and is also chairman of the board committee responsible for safety in one of Australia’s largest employers. She has a PhD in the field of safety governance and safety leadership, and was recently awarded the Safety Institute of Australia’s Dr Eric Wigglesworth OHS Education (Research) Award for her contributions to the field of health and safety. She is an adjunct professor at the QUT School of Business, founder of Orbitas Group and a member of OHS Professional magazine’s editorial board.

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