The Role of Company Directors in the Governance of Health and Safety in the Workplace
by Victoria Brewer
A Royal Commission of Inquiry established in relation to the
Pike River Coal Mine tragedy found that there were significant
shortcomings in the company's corporate governance and
management. The failure of the company's board of directors
to provide effective health and safety leadership contributed to
the operational causes of the explosions that killed twenty-nine
In response to the corporate governance issues raised in the
Commission's report, the Institute of Directors and the Ministry of
Business, Innovation and Employment have recently released a new
guideline for company directors on leading and managing health and
safety in the workplace ("Good Governance Practices
Guideline for Managing Health and Safety Risks").
This guideline provides directors and senior management with
practical advice for implementing and maintaining a positive health
and safety culture within an organisation, as well as a "Director
Health and Safety Checklist" and a list of resources offering
Although some of the recommendations may not apply to every
industry, the underlying principles and responsibilities are
relevant to all workplaces. These are discussed further
Principles of Health and Safety Governance
The fundamental principle underlying a directors' role in health
and safety management is leadership. The guideline makes it
clear that leadership includes:
- Setting the policy direction for health and safety
management. These policies should reflect the organisation's
responsibility to provide a safe and healthy work environment not
just for its workers but for contractors, visitors, customers, and
anyone else who may be affected by the organisation's
- Ensuring that the board's behaviour is aligned with the
organisation's health and safety goals in order to encourage a
positive workplace culture. Financial and production targets
should not be of higher priority than addressing health and safety
- Engaging with workers and management to ensure that workers are
encouraged to contribute to improvements to system development and
that management is held to account for meeting expectations.
Worker participation in health and safety risk management leads to
better health and safety outcomes.
- Ensuring that the board's leadership is "informed
leadership". Directors cannot measure health and safety
performance without an understanding of the organisation's hazards,
safety risks, and hazard control methods.
In addition to providing leadership, an organisation's officers
and directors must always comply with relevant laws and regulations
and ensure their organisation's compliance. It is important
to note that directors can be held personally liable for an
organisation's failure to comply with the Health and Safety in
Employment Act 1992 if they are held to have "directed, authorized,
assented to, acquiesced in, or participated in" a failure to comply
The guideline sets out four core responsibilities for directors
in their health and safety management role: policy and planning;
deliver; monitor; and review. Under each of these headings,
the guideline sets out a discussion of each responsibility; a
series of questions to be used by directors as a tool to determine
whether the organisation's practices are appropriate; and a list of
director actions. The actions for directors are divided into
two categories - baseline actions and recommended practice.
The guideline also sets out responsibilities of managers.
Below is an overview of the general responsibilities for
directors as set out in the guideline.
Policy and planning
- To determine the board's charter and structure for leading
health and safety.
- To determine high level health and safety strategy and policy,
including providing a statement of vision, beliefs and policy
demonstrating the board's commitment to, and beliefs about the
management of health and safety.
- To hold management to account for implementing strategy.
- To specify targets that will enable them to track the
organisation's performance in implementing board strategy and
- To manage the health and safety performance of the CEO,
including specifying expectations and providing feedback.
- To lay down a clear expectation for the organisation to have a
fit-for-purpose health and safety management system.
- To exercise due diligence to ensure that the system is
fit-for-purpose, being effectively implemented, regularly reviewed
and continuously improved.
- To be sufficiently informed about the generic requirements for
a modern, 'best practice' health and safety management system and
about their organisation and its hazards to know whether its system
is fit-for-purpose, and being effectively implemented.
- To ensure sufficient resources are available for the
development, implementation and maintenance of the system.
- To monitor the health and safety performance of the
- To outline clear expectations on what should be reported to the
board and in what timeframes.
- To review reports to determine whether intervention is required
to achieve, or support organizational improvements.
- To make themselves familiar with processes such as audit, risk
assessment, incident investigation, sufficient to enable them to
properly evaluate the information before them.
- To seek independent expert advice when required to gain the
required degree of assurance.
- To ensure the board conducts a periodic (e.g. annual) formal
review of health and safety to determine the effectiveness of the
system and whether any changes are required.
- To ensure the board considers whether an external review is
required for an independent opinion.
The guideline is intended to demonstrate how directors can
influence health and safety, and to provide a framework for how
directors can lead, plan, review and improve health and safety
within their organisation. A "best practice" approach to
health and safety governance is encouraged, particularly for
organisations operating workplaces with obvious hazards and safety
For more information, follow the
link below to view the complete guideline: