Archives

A Blue Print for Company Directors & Boards – A Risk Mitigation Framework

BlogPicTemplate-1

Directors & Boards have a clear obligation to ensure as far as is reasonably practicable the work health and safety of employees. This obligation is broadly applied by the courts and tribunals. The reduction of risk associated with unlawful or inappropriate employee conduct features prominently in that obligation.  Mainly because of cost resulting from increasing premiums from stress claims and emotional injury.  However, behaviour risk mitigation as a function of HR or HS&E operates in the absence of ‘real’ and ‘effective’ data collection and high level monitoring or awareness. Directors may delegate responsibility for a function but not the accountability.

In Australia, regulators and community (customers) expect management, directors and boards to actively to seek out behaviour risk and eliminate it. The question constantly asked by regulators, courts and tribunals is this: “What was reasonably practicable given an organisations capacity and resources available to it to ensure the work health and safety of employees was not put at risk?”

The question asked by parents and families (customers) of people affected by bad behaviour at work is simply: “How could this happen to our son, daughter or family member?” How many other people will they tell?

The response to prevention is defined by the ‘risk appetite‘ of the executives, directors and Board members within organisations.  There are gamblers – playing with risk to brand and reputation, and there are visionaries who believe increased productivity and profitability will come from increased employee engagement and feelings of connection within in safe work environment. Regulators and tribunals know this and force compliance to a standard. A standard developed to a minimum standard. This minimum standard is often patently inadequate given resources available to larger organisations.

The behaviour recorded in this clip is unacceptable, we would all agree. Another employee recorded it and it went viral on You Tube.  How devastating would it be to have your brand and reputation trashed in such a public way?  How does you organisation collect data which presents lead indicators of risk? Are you a gambler or a visionary?

In 2013 Ernst & Young surveyed 641 companies in 21 countries to uncover the top 10 risks articulated by company directors and senior executives.

Cost Cutting & Profit Pressure (impacting on growth) – 2nd on the list, cost control and reduction is impacted upon by unexpected cost and damage to brand caused by claims and grievances about inappropriate behaviour  and ineffective risk mitigation systems;

Market Risk (impacting on growth & market position) – 3rd on the list, market growth and position is impacted upon by damage to brand and reputation from the unexpected crisis – such as a public exposure to a discrimination or sexual harassment claim – remember the David Jones crisis who’s customer base was predominantly female, the Cafe VAMP case and suicide of employee Brodie Panlock who was bullied at work, and the CSIRO public disclosure of a bullying culture.

Regulation & Compliance – 7th on the list, this concern is impacted upon by the ever-increasing compliance requirements. For example, changes to the Fair Work Act, which included new powers for the Fair Work Commission to stop workplace bullying and adverse action.

If there was a way to identify and reduce risk through early intervention, would you be interested? What questions need to be asked to facilitate that?

A blue print for effective risk mitigation & compliance requires Directors to ask 5 key questions:

  • “How do our systems of data collection effectively identify, measure and enable mitigation of behaviour risk for our business?”
  • “How do we ensure we are firmly in the preventative space and not in a reactive one?
  • “How do we identify what workplace behaviours are accepted and promoted in our business?”
  • “How do our structures and processes governing how work support risk mitigation?”
  • “Whom can our employees really talk to when they have a concern or problem about another employee’s behaviour?”

If these reasonable questions are asked openly, the path will emerge about what needs to be done. Support is available.