I gave a keynote address recently to a group of 100 of Australia’s leading safety practitioners about safety leadership in the boardroom. I often hear comments from safety practitioners indicating a level of frustration with the details of questions asked by their board often extending, in their view, into the role of management. At the same time, other safety practitioners seek advice on how to engage their boards in safety at all.
What is clear from my own experience as a company director, as well as my own academic research, is that whether a board is perceived as “over-stepping” into the role of management in safety or whether a board may be viewed as needing to “step up” will frequently depend on the maturity of the safety governance framework in place.
Safety governance refers to the relationship between the board and senior executive team in the safety leadership of the organisation. It provides the structure through which the vision and commitment to safety is set; the means of attaining agreed objectives are obtained; the framework for monitoring safety performance is established; and compliance with relevant legislation is ensured.
In order to assist organisations identify the level of maturity of their safety governance, I have developed a safety governance pathway. Every organisation sits along this continuum and while the process is not linear, as the board and senior executive team become more comfortable with their safety leadership roles, the safety governance framework of the organisation will mature.
Stage 1 – Transactional
The least effective boards with respect to safety outcomes appear to take a transactional approach with a minimal emphasis on workplace safety in the organisation. These boards and senior executive teams may view safety as a management responsibility, with the board generally only engaged after an incident has occurred. These organisations do not tend to make any disclosures about safety performance in their annual reports.
Stage 2 – Compliant
New safety legislation in many countries has seen a large number of boards become compliance focused whereby the board is aware of their responsibilities in a legal sense and will seek to ensure basic safety reporting is in place, often focused on lag indicators. A brief reference to safety may be made in an annual report such as reporting the existence of a safety policy. Overall, compliance with legislation is the main driver rather than seeking to go ‘beyond compliance’ to understand the importance of safety leadership by the executive team and the resulting impact on safety culture.
Stage 3 – Focused
Once a compliance framework for safety has been achieved, boards often become more focused on safety beyond mere compliance with legislation. Safety may be included in the board charter at this point, a vision for safety and safety targets may be set, and lead indicators introduced. Often safety systems and processes are now disclosed in annual reports.
Stage 4 – Proactive
During this stage boards might become more pro-active in safety and are comfortable with their role in safety leadership. Boards may seek even greater safety performance from their executive team and establish a sub-committee of the board to ensure safety receives the focus it requires. Often in this stage the Chairman makes a personal commitment to safety in their annual report and public disclosures may also include both lag and lead indicators.
Stage 5 – Integrated
The most effective safety governance frameworks are those boards which ensure that safety is completely integrated with the operations of the organisation. The link between high safety performance and business excellence (or safe production) is understood and accepted by the board and senior executive team. Clear statements about the role of the board in safety are disclosed in annual reports and safety-related disclosures are honest and transparent sharing both the good news and the bad.
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.