HSC targets directors

Howard Fidderman looks at the implications of the HSC's draft health and safety code for directors.

The HSC has issued a draft code1 to help directors manage properly the health and safety risks arising from their organisation's activities. Importantly, the code recommends that companies appoint a board director for health and safety. It also uses a definition of director that will cover all types of private and public sector organisations. The code's other provisions, however, are little more than a restatement of existing duties and HSE advice, with which the more scrupulous organisations should already be fully conversant and compliant.

The code, which was issued on 17 January, will apply to the board of directors in incorporated bodies, and the senior management board in the public sector. It comprises an introduction, five action points (which contain the substance of the code), a reading list and a summary of health and safety legal responsibilities. The action points, which are set out in the box, essentially urge directors to be aware of, and promote, health and safety matters, and ensure they are taken into account when making any decision affecting the business. The consultation document seeks comments on each section, and asks respondents whether or not they believe the wording of the code would cover complex organisational structures and, in particular, a subsidiary's board that has a health and safety leadership role.

The initiative follows a commitment given by the HSC and the Government in their Revitalising health and safety strategy published in June 2000 (Employers face major health and safety at work shake-up). Although the HSC describes its proposal as a "code", its status is in fact that of guidance and not a more important Approved Code of Practice (ACoP) issued under s.16 of the HSW Act. The difference is that:

  • although it is not compulsory for duty-holders to follow guidance, adherence will normally be enough to comply with the law; but

  • a prosecutor can take to a court a failure to comply with a provision of an ACoP as proof that a defendant has contravened the regulation to which the provision relates (although the failure is not in itself an offence). The defendant may still satisfy the court that it has complied with the regulation in some other way.

    The HSC insists, however, that it "will also advise ministers on how the law would need to be changed to make these responsibilities statutory so that directors and similar responsible persons are clear about what is expected of them in their management of health and safety. It is the intention of ministers to introduce legislation on these responsibilities." Such a move, as ever, will depend on sufficient parliamentary time and political will.

    Appointing a health and safety director

    The code recommends that every board should appoint one of their number as a health and safety director. "Appointing a health and safety director ensures there is a board champion for health and safety risk-management issues." The HSC does not suggest the appointment of any particular director, stating only that: "Some boards may prefer to see such functions assigned to their chair and/or chief executive. As long as there is clarity about the health and safety responsibilities and functions, and the issues are properly addressed by the board, this is acceptable."

    Although the code will probably become best known for the "named" director, the HSC is keen that every director, and the board as a whole, takes responsibility for health and safety. Indeed, the draft code states: "The health and safety responsibilities of all board members should be clearly articulated in the organisation's statement of health and safety policy and arrangements. The intention is that the role of the health and safety director should not detract from the responsibilities of other directors for specific areas of health and safety risk management."

    Launching the code, HSC Chair Bill Callaghan said: "Many employers take their health and safety responsibilities seriously, but there are still too many who don't. Directors must be accountable for their organisations' health and safety performance: this should be a core requirement of business activity, not an inconvenient 'add-on'. Health and safety performance is just as important as financial performance. Quite simply, those who cannot manage health and safety, cannot manage."

    Will the code bite?

    Campaigners have been calling for years for a named health and safety director, both to assist prosecutions and to force boards to take safety seriously. Indeed, Michael Meacher - now Environment Minister - gave such a commitment in Opposition. But the code is circumspect as to how the appointment of a director might be used in prosecutions. The only reference comes in a draft annex to the code that summarises legal responsibilities. Even this is confined to a restatement of s.37 of the HSW Act, ie where a body corporate commits a health and safety offence, and the offence was committed with the consent or connivance, or was attributable to any neglect of any director, manager, secretary or similar officer of the body corporate, then that person and the company are liable to prosecution.

    It is uncertain whether or not the presence of a named director and the code will increase the incidence of such prosecutions. While the HSE laid more than 2,000 "informations" against organisations in 1999/2000 alone, it laid only 264 informations against directors in the 14 years between 1986/87 and 1999/2000 (see table below for further details). The problem is both political and practical. And practically, the code may facilitate s.37 charges against directors in larger organisations where a long chain of accountability makes it more difficult to prove consent, connivance or neglect. Politically, there is no doubt the current Government is less afraid of calling employers into line on health and safety matters than were the previous Conservative administrations. This may empower inspectors to charge where previously they would have ignored. Ironically, the area where the need for a named director has been most pressing - as an aid to proving corporate manslaughter - is now less important as the Government's proposals for a new offence of corporate killing do not depend on identifying any individual as embodying the company (Penalising corporate killers).

    HSW ACT CHARGES AGAINST DIRECTORS (S.37)

    Informations laid

    Convictions

    Total fines

    Average fine per conviction

    1986/87

    45

    5

    £2,000

    £400

    1987/88

    6

    4

    £750

    £188

    1988/89

    8

    6

    £3,700

    £617

    1989/90

    23

    18

    £31,150

    £1,731

    1990/91

    6

    4

    £1,000

    £250

    1991/92

    10

    7

    £6,250

    £893

    1992/93

    34

    23

    £20,425

    £888

    1993/94

    13

    6

    £3,940

    £657

    1994/95

    13

    8

    £12,450

    £1,556

    1995/96

    21

    12

    £28,750

    £2,396

    1996/97

    35

    19

    £63,750

    £3,356

    1997/98

    9

    6

    £13,250

    £2,208

    1998/99

    11

    11

    £40,500

    £3,682

    1999/2000

    30

    21

    £35,400

    £1,686

    TOTAL

    264

    150

    £263,315

    £1,755

    Source: annual totals supplied by HSE.

    THE CODE'S ACTION POINTS

    The draft code sets out five action points for the health and safety responsibilities of directors (in bold below), and elaborates on each (bullet points below).

    1. The board needs to accept formally and publicly its collective role in providing health and safety leadership in its organisation:

  • strong leadership is vital to effective health and safety control;

  • everyone should know that the board is committed to continuous improvement;

  • the board should explain its expectations and how the organisation will deliver them; and

  • the statement of health and safety policy should be a "living document" that has been devised in consultation with the workers, and should be reviewed, revised and brought to the attention of all workers.

    2. All members of the board need to accept their individual role in providing health and safety leadership for the organisation:

  • directors should ensure their decisions and actions always reinforce the messages in the board's health and safety policy statement - any "mismatch" will undermine the staff's faith; and

  • directors must recognise their personal responsibilities and liabilities under health and safety law.

    3. The board needs to ensure that all board decisions reflect its health and safety intentions, as articulated in the health and safety policy statement:

  • many business decisions will have health and safety implications - for example, investment inplant and premises;

  • directors should look at the health and safety management of organisations they do business with - purchasing decisions and the engagement of contractors should reinforce, not damage, the board's health and safety intentions;

  • directors must alert customers to any risks and precautions associated with the company's products; and

  • the board should remember that although it can, and should, delegate health and safety functions, legal responsibility for health and safety rests with the employer.

    4. The board needs to recognise its role in engaging the active participation of its staff in improving health and safety:

  • effective risk management requires active participation of staff; and

  • the board "should encourage employees at all levels to become actively involved in all aspects of [the] health and safety management system".

    5. The board needs to ensure it is kept informed of, and alert to, health and safety risk-management issues. The HSC recommends that boards appoint one of their number to be the "health and safety director".

    The board must:

  • review regularly - and at least annually - the organisation's health and safety performance;

  • ensure the safety policy statement reflects current board priorities;

  • ensure that the management system provides for effective monitoring and reporting of the company's health and safety performance (more advice will be available in forthcoming HSC guidance on health and safety in annual reports);

  • be kept informed of any significant health and safety failures and of subsequent investigations;

  • ensure that it addresses the health and safety implications of all decisions; and

  • ensure that health and safety risk-management systems are in place and remain effective.

    1"Health and safety responsibilities of directors", CD 167, HSE Books, free. Responses should reach Steve Vinton by 9 March 2001 at 8SW, HSE, 2 Southwark Bridge, London SE1 9HS, tel: 020 7717 6954, fax: 020 7717 6417, e-mail: steve.vinton@hse.gsi.gov.uk