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Safeguard OSH Solutions - Thomson Reuters

Safeguard OSH Solutions - Thomson Reuters



Health, Safety, and ACC

4.6 Benefits of leadership and corporate governance

4.6
Benefits of leadership and corporate governance
There is good research evidence showing that effective corporate governance results in stronger performance of listed companies. Similar evidence shows that effective management of risk, including health and safety related risk, adds value to companies (e.g. stability of share price and earnings).
How due diligence is achieved depends on each PCBU and the actions of the officers, but research supports the due diligence requirements in the Act. Research also shows officers and managers need to be rigorous in setting out and demanding achievement of safety-related expectations (J Busby and A Collins ”Risk leadership and organisational type Research Report RR756, Health and Safety Executive, Sudbury, 2009, <www.hse.gov.uk>).
Financial drivers for improving workplace health and safety include the following: (J Boardman and A Lyon “Defining best practice in corporate occupational health and safety governance Research Report 506, Health and Safety Executive, Sudbury, 2006 <www.hse.gov.uk/research>):
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using a good safety record as a market differentiator;
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general good business practice;
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financial advantages including bottom-line savings, avoidance of fines and sickness absence costs, and influencing insurance premiums;
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winning contracts and engagement with customers;
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assurance to business partners that contracts will be fulfilled;
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assurance to investors and lending institutions;
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enhancing reputation and avoiding adverse publicity;
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engagement and relationships with employees and their representatives; and
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relationship building with regulatory agencies and consequential reduction in compliance costs.
Other research shows that events resulting in major losses or multiple fatalities can result in failure of businesses and a lack of engagement at board level is frequently found to be a root cause of failures in occupational health and safety (R Knight and D Pretty Managing the risks behind sudden shifts in value (2003) <www.oxfordmetrica.com>).
Other research shows directors and managers can positively influence safety performance in organisations by doing the following: (C Lekka “A review of the literature on effective leadership behaviours for safety Research Report RR952, Health and Safety Executive, Sudbury, 2013 <www.hse.gov.uk>):
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developing a positive safety culture;
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making a visible commitment to safety by setting priorities (e.g. safety is the first item on meeting agendas) and allocating necessary resources;
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engaging in health and safety activities, enabling employees to make suggestions for improvement or to raise concerns;
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developing trust (e.g. though openness, employee support, mutual respect, behavioural consistency, and delegation of control to employees or groups of employees); and
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never ignoring safety issues or human factors problems.

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