Make no mistake, managing corporate risk is a key issue for all directors and senior managers to address. There is much to say about this subject and the following is just a summary of some of the main points involved.
It may well be worth remembering that the effective management of health and safety risks adds value to the business by maximising the well-being and productivity of employees thereby helping to prevent illness and injury. This invariably has long term and positive effect on turnover and profitability. In addition worker involvement in health & safety supports a positive health and safety culture.
Accountants in England & Wales have prepared clear guidance for directors for UK incorporated listed companies in respect of a number of principles:
Principle D.2 of the Code
The board should maintain a sound system of internal control to safeguard shareholders’ investment and the company’s assets.
The directors should, at least annually, conduct a review of the effectiveness of the group’s system of internal control and should report to shareholders that they have done so.
The requirement goes further to say that the review should:
…cover all controls, including operational and compliance controls and risk management
One key risk area is the health and safety of an organisation’s workers and of others (including members of the public) who may be affected by its activities.
The Health & Safety Commission
The Health & Safety Commission guidance states that the board needs to accept formally and publicly its collective role in providing health and safety leadership in its organisation.
The Health & Safety Commission guidance also recommends that every board should appoint one of their number to be a ‘Health and Safety Director’ who can ensure that health and safety risk management issues are properly addressed, both by the board and more widely in the business. Their responsibilities will include keeping up to date with Health & Safety Information and informing the other Board Members.
The Chairman and/or Chief Executive has a critical role in ensuring risks are properly managed and that the health and safety director has the necessary competence, resources and support of other board members to carry out their functions.
The health and safety responsibilities of all board members should be clearly articulated in the statement of health and safety policy and arrangements. The role of the health and safety director should not detract either from the responsibilities of other directors for specific areas of health and safety risk management or from the health and safety responsibilities of the board as a whole.
In short, the whole board need to make a commitment to continual and improved health and safety performance of the business and hence individual directors need to recognise their personal responsibilities and liabilities under health and safety law.
The board also need to communicate their health & safety intentions to all working staff:
- Explain health & safety expectations, and how your organisation will deliver them - Obtaining The HSE Health & Safety Poster is always a good place to start, but training videos and booklets are a good way of showing your staff the right health & safety procedures
- Provide a working document including health and safety policy and procedures - Generic written procedures and risk assessments for the office environment are included in the BSS Health & Safety Manual
Board members need to behave and take decisions that reinforce the messages or take into account the board’s health and safety policy statement. Any disparity between the two is likely to undermine the workers’ belief in the Boards intentions and will undermine good health and safety practice.
The Board need to ensure that their health and safety responsibilities are acted upon. They’ll need to:
- Facilitate effective monitoring and reporting of health & safety performance
- Review the health and safety performance regularly (at least annually)
- Allow for changes in the business such as management structure (and hence health & safety responsibilities) work practices/personnel/roles/moving buildings etc
- Be kept informed of any significant health and safety failures, and of the outcome of the investigations into their causes
- Ensure that health and safety risk management systems are in place and remain effective
Periodic audits can provide information on their operation and effectiveness.
The Health and Safety at Work etc Act 1974
Requires employers to be responsible for ensuring the health and safety of workers and for reducing risks to others affected by work activities.
Health and safety functions should be delegated and health and safety risk management legally requires the active participation of the company’s workers. However the legal responsibility for health and safety rests with the employer.
Employers need to prepare, and make sure their workers know about, a written statement of the health and safety policy and the arrangements in place to put it into effect.
Where a ‘body corporate’ commits a health and safety offence, and the offence was committed with the consent or connivance of, or was attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate, then that person (as well as the body corporate) is liable to be proceeded against and punished.
The Management of Health and Safety at Work Regulations 1999
These regulations include requirements for employers to:
- Assess the work-related risks faced by employees, and by people not in their employment
- Have effective arrangements in place for planning, organising, controlling, monitoring and reviewing preventive and protective measures
- Appoint one or more competent persons to help in undertaking the measures needed to comply with health and safety law
- Provide employees with comprehensible and relevant information on the risks they face and the preventive and protective measures that control those risks
Again the The HSE Health & Safety Poster is a must here, but training videos and booklets are one of the best ways of showing your staff the right Health & Safety procedures
- Turnbull Report (PDF)
- Health and Safety Regulation: A short guide (PDF)
- Health and Safety Law: What you should know (PDF)
- Directors’ responsibilities for health and safety (PDF)
- Employers’ Liability (Compulsory Insurance) Act 1969: A guide for employers (PDF)
- Employers’ Liability (Compulsory Insurance) Act 1969: A guide for employees and their representatives (PDF)
- Internal Control: Guidance for Directors on the Combined Code - Institute of Chartered Accountants for England and Wales
- Workplace Health, Safety and Welfare: Workplace (Health, Safety and Welfare) Regulations 1992 - Approved Code of Practice and Guidance — Health and Safety Executive
- Health and Safety at Work Etc. Act 1974 (Public General Acts - Elizabeth II) — Peter Vergo
Disclaimer: The Office Safety Company have provided the ‘Quick Guides’ on the basis that the content and advice contained within these documents is to the best of our knowledge accurate at the time of publication. The Office Safety Company does not accept any liability for the accuracy of the information provided in the ‘Quick Guides’.