Directors and Officers Safety Duties – a closer look

Directors and Officers Safety Duties – a closer look

New Health and Safety at Work Act out next year. Check out this Action Plan for company Directors and Officers.

By now, most employers know that specific duties and liabilities for Directors and Officers of “undertakings” are coming up in the new Health & Safety at Work Act, scheduled to come into effect April 2015. We also know the penalties will be much higher. Let’s take a closer look at what’s required. More importantly, let’s see what simple things Directors and Officers can do now to manage the risk. What I’m going to do is set out the background and facts as simply as I can. Then, I’m going to condense it all into an Action Plan. This will be included as a module in our SafetyBase application. Directors and Officers will be able to record their actions in health and safety and get automatic reminders for regular tasks.

A word of caution: This analysis is based on the Health & Safety Reform Bill, introduced to the House in March. It is to be expected that the eventual detail of the Act will be a little modified, however, the general thrust is unlikely to differ by much.

PCBUsDirectors and Officers

The Act will introduce an entity called Person Conducting a Business or Undertaking (PCBU). It will apply whether the “person” is alone or with others, whether or not for profit or gain. So a PCBU will most often apply to the corporate entity, but it could be individuals, particularly where the business is owner operated. It will not apply to sole workers in a business, volunteer associations or occupiers of homes employing people solely for residential work. The difficulty here is understanding that a PCBU doesn’t really have to be one particular person. It’s just a way of creating a hook to hang a set of duties on.
At the same time, the Act will attach some specific duties to certain types of PCBU within the business:

  • First of all, there is a general set of duties for the PCBU. It’s a bit longer than the current Section 6 of the HSE Act, but it sets out a very similar general obligation to make the workplace healthy and safe.
  • Then, there is an interesting one. A PCBU who manages or controls fixtures, fittings or plant. It appears that here is a situation where you could inherit some hefty responsibilities by virtue of your job. There may be a few engineers, property managers and maintenance managers wishing to clarify where this might lead them. I suspect, however, that the general aim here is to keep the corporate entity on its toes, rather than punish sole charge “maintenance guys”. Nevertheless, if there is an individual who  makes big decisions about “what happens around here”, they had better make sure they are good ones. It would appear sensible to get consensus from other senior people on the biggies!
  •  Furthermore, there will be a PCBU who designs plant, substances or structures for use in a workplace. It could be your own workplace or someone else’s. You must ensure the plant, substance or structure is designed to be safe for people who use it or carry out any foreseeable activity such as inspection, cleaning, maintenance or repair. You must also provide information about the purpose of the plant, substance or structure, any calculations, analysis, testing or examination required.
  • There are similar obligations on PCBUs who manufacture, import, supply or install plant, substances or structures.

Directors and Officers

An Officer in a PCBU is defined in the Bill as any person occupying the position of director by whatever name called. It includes partners or any role comparable with that of a director. Now, here’s the bit that might bring it all home. It also applies to any other person who makes decisions that affect the whole, or a substantial part of the business of the PCBU (for example, the chief executive). So that could be a General Manager, CFO, even senior engineers, designers and planners.

So, what duties will Directors and Officers have? They must exercise due diligence in taking reasonable steps:

  1. To acquire knowledge of work OHS matters;
  2. To gain an understanding of the nature of the work and the hazards and risks;
  3. To ensure the PCBU has resources and processes to manage risks, and uses them;
  4. To ensure the PCBU has processes for collecting information on incidents, hazards and risks and responding to that information;
  5. To ensure the PCBU implements compliance with the Act;
  6. To verify the provision and use of resources and processes in 3 – 5 above.

So Directors and Officers have to play an active and knowledgeable health and safety role in their business. The six duties above do not require an accident or event before they are activated (although clearly, that is one way to get noticed). It will be an offence in itself not to comply. Perhaps one day, the Worksafe armoury might include inspectors with the skills to knock on boardroom doors and audit the diligence of Directors and Officers. One way or another, there will be no more anonymity in numbers, protected behind the corporate body.

Guiding Principles

I have referred in previous posts to the Good Governance Practices Guideline for Managing Health and Safety Risks. These were published as a joint development by the Institute of Directors (NZ) and the Ministry of Business, Innovation and Employment. The more one reads it, the more one realises this is a superbly conceived document. In my opinion, each of its 36 pages are gold plated, and what follows leans heavily on the advice it contains.

Here are some nuggets in terms of the approach and guiding principles that Directors and Officers should live by:

  • There is a difference between “governance” (guidance), and “management” (implementation).
  • A healthy and safe workplace has both a human and business cost.
  • Organisations with a good health and safety reputation are valued by workers, investors and stakeholders.
  • Engaged workers are more productive and have a wide positive influence.
  • A healthy and safe workplace has lower absence, lower turnover and higher quality and productivity.
  • Safety reduces costs (and earns ACC incentives).
  • Research shows a return on prevention ratio of 2.2. (International Social Security Association, 2011).
  • It is not sufficient to assume “things are under control unless told otherwise”.
  • The three key principles of safety governance are: Leadership, Worker Participation and Legislative Compliance.

Action Plan

Here are the four categories of actions the Guidelines recommend for Directors and Officers.

Policy & Planning

  • Develop and publish a safety vision statement in collaboration with employees.
  • Establish measurable targets, including lead and lag indicators.
  • Structure the Board to give safety a focus and expertise.
  • Create a detailed board charter describing the roles for leading health and safety.
  • Provide the CEO with a role description that includes OHS responsibilities and accountabilities.
  • Ensure the management structure recognises OHS responsibilities and accountabilities.
  • Apply performance review processes to the CEO and other management.


  • Ensure management develops and maintains a compliant OHS Management System – become familiar with it.
  • Review reports of audits of systems and plans – get independent advice.
  • Be personally aware of organisational hazards and controls – go and look/check.
  • Ensure hazards are identified and controlled.
  • Ensure competent contractors are selected, inducted and supervised. Control and manage activities of visitors.
  • Ensure management employ people with the right skills, and/or train and supervise them.
  • Ensure management implements a just and effective employee participation system.
  • Encourage reporting of events.
  • Ensure plant and equipment is fit for purpose, maintained and operated safely.
  • Provide sufficient resources and funds for health and safety.


  • Establish clear rules and timeframes for reporting significant events.
  • Ensure that with serious events, external advice is taken to avoid conflicts and vested interests.
  • Review serious events, including non-compliance and serious near misses and be personally satisfied with actions taken.
  • Ensure improvement goals are developed regularly, (as distinct from simple maintenance routines).
  • Require regular, frank and open reporting of OHS performance and review for trends, system breakdowns or improvement opportunities.


  • Specify a regular formal OHS Review, including frequency, who is involved, inputs, how etc.
  • Ensure the Review includes audits, system reviews, performance, significant events, changes, benchmark data etc.
  • Ensure an action plan, new objectives, changes to systems, new initiatives result from the Review.

The Guidelines also include a Health and Safety Checklist for Directors and Officers and many related resources, such as lists of responsibilities, diagnostic questions you can use, and lists of external resources.

SafetyPro can supply you with a selection of health and safety systems, all of which come ready-made with guidelines for Directors and Officers. Our cloud based SafetyBase system can be used to generate checklists, schedules, tasks, corrective actions and board level reports. We have auditing abilities and can advise on simple but effective safety management systems that don’t cost the earth.

Call now on 0800 000 267 or +64 9 535 4355



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