Why Boards Need Better Safety Governance Guidance

Current safety governance guidance available to Boards is limited and associated standards of reporting should be reviewed, according to an expert in risk management and mitigation.

In March 2017 Safe Work Australia commenced this process, and principle 9 provides limited frameworks which would be of benefit to Boards, said Jillian Hamilton, CEO of risk advisory firm Manage Damage.

There is also the challenge of levels of influence she said: “it is my opinion that the Boards’ sometimes ‘hands-off’ approach with new laws are going to change the approach; still one of guidance, strategy and direction but with some more detail required,” said Hamilton.

Executive and non-executive Board members are informed about safety risks as much as they request, and Hamilton said there is no specific set guideline on how much and the levels of details a Board should receive or request.

“Due diligence asks them to be informed of the risks that are occurring in their business and it is a positive duty about what they ‘ought to have known’,” she said.

Hamilton, who recently spoke at a Safety Institute of Australia and Australian Institute of Company Directors event on safety governance, said levels of reporting delivered will vary from business-to-business, and the level of risk that is divulged is often dependent on appetite by both the Board and operations.

“It can happen that information is sometimes diluted by operations to the Board due to pressures for performance, and sometimes Boards request the levels of information required – this level will vary depending on how the safety governance reports are established at the business,” she said.

Hamilton said there is a need for better safety governance advice, as “risk has been wrapped up with pure risk while non-financial risks such as safety have not had as much attention.”

She added that there has been “almost zero training in this space – we see the need for training where safety gets more than 15 minutes in the courses and we see other legislations such as whistle blowers, modern slavery, industrial manslaughter and corporate social duties all driving a different approach,” she said.

OHS professionals must elevate safety risks and understand the businesses they operate in, according to Hamilton, who said OHS should work with HR, operations, finance and planning to add value and assist in their part to aptly inform the business and the Board of current and emerging risks.

“This is really why you are placed there,” she said.

“This is not an ass-covering exercise – this is how you plan to manage risk and people and ensure as far as reasonably practicable as little damage to people and property.

“Then you can have your seat at the Board room and be respected by your other leaders who will become your peers instead of the business leaders – you too will be one of them.

“If you work together with your team you can achieve amazing things for safety and risk,” said Hamilton.