In the wake of the Royal Commission’s findings of misconduct in the banking, superannuation and financial services sectors, treasurer Scott Morrison recently read out a damning rap sheet from APRA.
He cited "a complacent culture, dismissive of regulators," and went on to criticise "an ineffective board that lacked zeal and failed to provide oversight." He said senior executives lacked accountability and did not take ownership of key risks, adding they were "reactive, slow, and had under resourced systems and processes internally,"
Although he was slating the Commonwealth Bank in particular, Morrison suggested it behove every director in every organisation to take note of the Royal Commission’s findings.
The question arises, does the misconduct of directors apply only to the banking and financial services sector?
By virtue of comparison and from a WHS perspective it is not good enough for directors to claim they were unaware of shortcomings in their organisations’ WHS processes, or that they believed the systems and practices were being implemented effectively. Such claims could result in directors being considered either "reckless" or lacking in oversight. Then they could be held personally liable if a workplace incident were to result in serious injuries.
Current WHS laws in Australia require directors and executives of every organisation to exercise oversight and due diligence in upholding the safety of workers. This includes contractors, subcontractors as well as their employees. Company officers who fail to manage their risk and comply with work health and safety laws can face major penalties if convicted, including possible jail time.
The fact is, most progressive organisations have already put in place strong safety programs which are continually improved. As a result, they have developed positive safety cultures and were seeing fewer incidents and injuries in the workplace.
The issue becomes complicated, however, when contractors are engaged, since these workers introduce additional risks to an organisation’s work environment. So the question then becomes, do organisations have good systems, processes and practices to manage their contractors? Can the directors and senior executives still show due diligence and maintain oversight of their contractors’ processes and practices? If not, they will need to sharpen their pre-qualification criteria for contractors and to monitor them more effectively. They will need to get regular reports of onsite safety and health activities from each contractor, and then to review them. All of this will, of course, be time-consuming and costly.
There may, however, be a simpler solution. Organisations could outsource this to a specialist organisation to ensure the compliance of contractors in regard to health and safety issues, and to monitor their performance. By engaging such a company, the directors and executive staff could avoid the charge of being "reckless." They would be able to recognise the risks and make sure their systems, processes and practices were robust enough to manage them. Nor could they be accused of failing to provide proper oversight, as reports detailing contractor compliance would be available with recommendations for improving contractor performance, would be available to executives and directors to act on.
An example of a specialist organisation that provides comprehensive contractor compliance and monitoring services to organisations is Conserve. See www.conserve.com.au for details.
Aaron Govindasamy, the company’s director, says, "Conserve works hard to ensure our clients stay compliant, professional and risk free through using Conserve. The use of third party software will help to move large and small organisations towards a positive safety culture."
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