A recent report of the Australian Council of Superannuation Investors (ACSI) (Report) is critical of the lack of, or inadequate, public reporting of work health and safety (WHS) issues by ASX 200 companies (companies). (Members of ACSI own on average 10% of every ASX200 company.)
From its annual research of publicly-available information, the Report drew a number of concerning conclusions about the reporting of environmental, social and governance issues. We outline below, at a high level, some of the conclusions most relevant to work health and safety and our tips for organisations to consider:
- Reports of workplace fatalities were significantly more common among a company's contractor workforce rather than its own employees.
Tip for organisations: This highlights the need for organisations that engage contractors to ensure they have effective and robust contractor management systems in place. This includes the vetting process to engage contractors as well as the processes in place to manage contractors while services are being provided and ensure they are managing WHS appropriately.
- One-third of companies did not report any WHS data to the market, including some in high risk industries. Among other things, this makes it difficult for investors to ascertain whether the company takes WHS management seriously and the extent to which WHS is on the radar of its Board and executive leadership team.
Tip for organisations: Consider the type of WHS information which is appropriate to disclose to the market, including to meet investor expectations.
- Where reporting of WHS data did occur, it tended to focus on lag indicators (eg. rates of lost time injuries and historical data) rather than forward-looking lead or severity indicators (eg. trends of 'near misses').
Tip for organisations: Organisations should assess both lag and lead indicators as part of their WHS management system. This can, among other things, assist with deciding on an appropriate allocation of resources focused on the higher risks and higher potential impacts to workers within the business.
- Less than half of the companies factor WHS into executive remuneration.
Tip for organisations: Consider if it is appropriate for your organisation to factor WHS performance into executive remuneration. While directors and other officers already have positive statutory obligations to exercise due diligence to ensure their company is complying with its WHS duties, factoring WHS performance into executive remuneration can be another useful step to incentivise executives to ensure WHS is being managed appropriately.
Please let us know if you wish to discuss the suitability of your contractor management procedure, whether the WHS data you currently rely on is appropriate given the key WHS risks facing your organisation or factoring WHS into executive remuneration.
