new level of accomplishment can be achieved and sustained.
How do we know we’re being preventative in our safety eorts and how do we measure exposure to hazards in the absence of injuries or illnesses?
Virtually every event that results in a workplace injury or illness is preceded by lower level decisions and outcomes that increase the likelihood of failure in safety. The catastrophic failure—the death of a worker or a serious injury—can be seen as the
tip of an iceberg undergirded by an architecture of behaviors, practices and outcomes that made the greater loss predictable. Leading indicators of lower-level safety decisions reveal the organizational culture that gives rise to the costly failure. Directors should ask what leading indicators are predictive for their organization, including measures related to organizational culture and safety climate. Then they should ask what is being done to move those leading indicators, how they are changing over time, and what the readings were before the most recent major safety failure.
Directors should ensure that the organization fully understands what goes on in the places where workers interact with the core technology of the company, what we call the Working Interface. Ultimately, safety excellence depends on keeping the Working Interface free of hazards, which include the facility, the equipment and the behavior of the worker.
What is our exposure to a catastrophe such as Bhopal?
The failure to anticipate an incident of catastrophic proportions—that is, a multiple-fatality event or something the magnitude of Bhopal—is above all a failure of imagination. Either that or it’s a suppression of the evidence of leading indicators that prefigured the likelihood of a major failure. With reflection, any CEO, COO, and chief safety officer should be able to tell a director where such risks lie, what their probability of occurrence is, and what preventative steps are being taken to head them off.
How do we know there’s not fraud in our health and safety reporting and that exposures and accidents are not being under-reported?
ensuring that the performance data and the safety reporting are accurate.
A director with sound answers to these first five questions should be able to get an exact answer to the next question, which addresses how safety and value relate to one another in the company. The remaining questions deal with the reliability, transparency, and fairness of safety- related decision-making in the organization. No organization can reasonably expect employees to take on the task of safety—except when the CEO happens to be in town or the board happens to make its annual plant visit—if it lacks integrity.
Without the historical analyses, a clear goal, an awareness of early indicators, a “Bhopal” assessment, and validation of safety reporting, an organization may be unable to link safety and value. However, we are convinced that the two are closely linked and that any director deserves and has a duty to know the connection in a rigorous and validated way so as to optimize value creation for shareholders.
How much value are we delivering through our safety performance?
Any discussions about safety depend on the integrity of safety reporting, which holds the same challenges in the verification of processes and outcomes as financial reporting. Indeed, safety performance is an important measure of enterprise risk management, and shareholders are more watchful now for fraudulent reporting. Just as directors now see their responsibility and liability for sound financial reporting, they also sit where the buck stops in the matter of risk management, and workplace safety and health reporting. Both the full board and the committee responsible for environment, health and safety are responsible for
Economic value analysis has revealed the many value drivers that support the delivery of exceptional returns to shareholders. Within these “value trees” a director can see what dimensions are inherent in the safety-related behaviors, practices, and outcomes of the organization. By looking at the historical relationships between safety and financial outcomes, as well as the underlying causes of shortfalls in both, a company and its directors can assess the contribution a safe workplace makes to the organization’s value—or the degree to which safety breakdowns are inhibiting the creation of value.
Boardroom Brieng: Business Continuity and Disaster Recovery