Catastrophes such as the one that befell the Costa Concordia in January remind us that operating safely in a competitive world requires vigilance and a clear chain of command. And yet popular wisdom continues to insist that health and safety (H&S) officials exist solely to foist red tape upon all our activities.
This is far from my reality as a H&S advisor. In the corporate world, H&S experts aim to help businesses manage risk and protect employees without putting the brakes on operations. Virtually anything is possible with the right people and time to plan. At the same time, the public is increasingly concerned about the possibility of big businesses not being held to account for wrongdoing or negligence. We’re seeing that concern in much wider public condemnation of corporate failure, as in the cases of the Costa Concordia and the Gulf of Mexico oil spill. There are larger fines than ever before, with directors being personally held to account in court proceedings.
Earlier this year, the first successful conviction under the Corporate Manslaughter and Corporate Homicide Act, in which Cotswold Geotechnical Holdings was fined £385,000 following the death of a surveyor, caused shockwaves in the business world. These issues will quite possibly pale in significance compared to the much more wide-ranging effects and public liability issues surrounding an oil spill or a stricken cruise liner.
Simply put, Board members and senior businesspeople need to address H&S in a much more transparent, concerted and strategic way. Regulators won’t tolerate major gaps in compliance or workplace fatalities and the conviction against Cotswold, a small company, may open the floodgates for more actions and higher fines.
Board directors need to be able to state with conviction that they know for sure that all key risks are managed within their organisation. Boards often receive reports detailing leading and lagging indicators across a range of H&S issues. But does that information enable them to properly scrutinise and lead the risk management process? Are they sufficiently curious about the mechanics and effectiveness of H&S procedures?
Many companies are going through restructuring and reorganisation, which may include headcount reduction or a different operational approach. They may have had extensive safety management in place before, but must review the relevance of those procedures for the newly reformed company.
Investors and stakeholders are taking an increased interest in corporate H&S. For any multinational listed in London, there are calls for greater disclosure. What that will certainly reveal is that most H&S performance reporting systems aren’t up to the job. If production is solid and the share price is increasing but injuries still occur, then a gulf clearly exists between internal controls, management, and capability on the ground. Companies must therefore foster a people-focused safety culture once management systems and procedures are established.
Some Board directors don’t believe H&S can be strategic. But to identify what actually happens on the ground a strategic approach is certainly required. Increasing levels of sickness absence, for example, can put pressure on resources to maintain normal production and indicate that existing arrangements may be inappropriate.
H&S leadership must come from the top. Internal controls must be clear and effective, and bureaucracy must be balanced with empowered management. But strategic H&S shouldn’t stop at reviewing internal events and procedures. It’s all about a willingness to learn from the mistakes of others, whether it’s corporate calamity or a capsized cruise liner.