Due diligence – health and safety: a performance review, and what next?

Abstract

Across multiple jurisdictions, health and safety due diligence by company officers is a legal expectation and a core governance activity, widely recognised as a good for demonstrating care and engaging the workforce while improving business performance. It is also a recent arrival to the due diligence family: a legal defence in Canada in 1978, a deemed and then defined duty in Australia, a statutory duty in New Zealand from 2015.

This paper reviews what health and safety currently brings to the top table and what can be done to improve its contribution. Two assessments are applied, the first built from case law and the second from director, regulator and sector guidance. Their findings are consolidated and benchmarked against the structures and processes found in finance, the due diligence family’s founding member (Carruthers & Espeland, 1991).

The review identifies health and safety as the due diligence outlier: the only officer duty not discharged from records kept in the course of the work. Four themes emerge. Expectations are demanding more of officers: not what they believe about operational controls, but how they know. Health and safety has imported the intent, the vocabulary and some of the assurance apparatus of finance, but not its foundational infrastructure. The solution is operational, not safety. And the absent infrastructure is operational records built from field data.

Verification alone will not realise the opportunity. The required pivot is to capture task planning and execution as the work is done, so that each task is booked against the specification it was performed to. With the focus on the controls for energies that cause harm, discrepancies surface from the record itself and can be managed, without imposing unnecessary burdens on field staff. The officer's duty is then discharged from the same record. The paper concludes by explaining how an operational ledger that starts digital can deliver this outcome.