Directors and senior executives should start by asking questions that will help them understand their company's critical risks, says Terry Johnson. Photo / Norm Betts
Directors and senior executives should start by asking questions that will help them understand their company's critical risks, says Terry Johnson. Photo / Norm Betts
Better workplace relationships and risk reduction go hand in hand, a safety expert tells Helen Twose.
Terry Johnson jokes that he's gone from being the guy people avoid at barbecues, to now being able to pack out a meeting room.
The Simpson Grierson director of health and safety advisory services, who has been helping companies keep workers safe for more than 20 years, including roles atFonterra and Du Pont, says it's unusual for the safety person to be "cool".
But as the health and safety rules get a major overhaul, people are keen to tap Johnson's insights into what the new Health and Safety at Work Act means in practice.
The original legislation, introduced in 1992, had a strong focus on hazard management - the trips and slips - and ensuring staff weren't exposed to hazards, says Johnson. "What it tended to do was start to regulate activity in a way that people were probably undertaking anyway."
Though the old rules centred on the employer/employee relationship, the new Act recognises that the way in which businesses and organisations are run may have impacts beyond their own staff.
It aims to bring customers, visitors, contractors and the like under the health and safety guardianship of the organisations they are dealing with.
"There were elements of that in the old Act, most definitely, but we're seeing a big shift to really understanding as a person conducting a business or undertaking (PCBU) the risk that you create for all people that come into contact with what you do."
And good health and safety practice starts at the top. The new Act requires directors, or anyone operating in a role akin to a director, plus those in a position to exercise significant influence over the management of the operation, such as the chief executive, to carry out due diligence to ensure key health and safety risks are well managed.
A breach of the Act by directors or chief executives can potentially occur even if an accident or incident hasn't taken place.
It's a duty that can't be delegated, and violations may carry a criminal sentence.
"Their due diligence obligations are about ensuring that there is a process in place," says Johnson.
"They can't get prosecuted for the event; they can only get prosecuted for not having undertaken the due diligence.
"To me, the key things that they should be trying to focus on is they should be asking questions like: do we understand what our critical risks are; do we understand the things that are most likely going to cause a significant event or a fatality in our organisation; and have we thought about how we're going to control and stop that from occurring?"
For an organisation running a fleet of cars, it may mean questioning how the firm ensures staff have current licences, whether the vehicles are well-maintained or what safety rating a car has before it joins the fleet.
"Those are the sorts of things that could be controlling that risk but if you haven't asked 'what are we doing?' then no one will have thought about it.
"It's all about asking the right questions of your organisation, of your CEO, executive team and management."
Central to the Health and Safety at Work Act is the requirement that workers and others are protected from harm by eliminating or minimising risks.
The words "risk" and "hazard" are used almost interchangeably in New Zealand, but Johnson says risk is the theoretical threat of safety to people and property.
"It's the thing in our business that can cause harm.
"It is not a hazard until it is actually in a position where it can cause harm."
He says organisations need to think about safety risk on the same continuum as other business risks.
"You've got financial risk management, you've got reputational risk management, you've got environmental risk management and safety risk management should sit at the same level," Johnson says. "Put them together, don't separate safety out.
"Make it part of your overall risk management framework then you clearly start to understand and to see it. This is about understanding the risk we're exposed to and managing it, as opposed to hazard management."
Directors and business leaders don't necessarily need to be health and safety experts, but they do need to be informed and up-to-date safety leaders, which means understanding what's actually happening in the business.
Before sitting around the board table, new directors should be taken through an induction process, introducing them to the company's inner workings, says Johnson. He says it should be a red flag for potential directors if this business briefing doesn't happen.
"The next step would be to go through that process and be looking for them to be presenting critical risks, the annual health and safety plan as well as all the other aspects of business risk.
"Is health and safety risk sitting in the risk framework along with financial risk and other things?" Good health and safety reporting to the board shouldn't just be talking about outputs, such as injury rates, which tend to be lagging indicators, but should be showing the inputs into the health and safety programme, Johnson says.
Having a health and safety plan, regular updates on its delivery, its costs and how well it's working, including progress on any corrective actions, are all inputs, he says.
"Starting to measure safety in a different way will really help executive teams and boards really understand how well it is being managed." But even with all the systems and procedures in place, it will be the behavioural elements that drive best of breed health and safety.
"My belief is there is no such thing as a health and safety culture, it's just the culture in your organisation," says Johnson. "You'll never have poor engagement or poor working relationships with your people and have a great health and safety performance - they don't match up."
