Engaging Boards
blog 39
June 22, 2020

Engaging Boards

Today boards play an important role in health and safety, they can influence what is management's focus. Unfortunately, many boards are still unclear as to what their role is. This blog looks at the information provided to boards and is crucial to keep boards engaged.

To be involved effectively, a board must focus on getting the right information and metrics. Metrics is now a commonly used term, meaning to measure something, they are generally divided between:

Quantitative measurements - as the name suggests quantitative measurements are all about numbers. The challenge with this type of data is that you must be confident that it is the correct data before making assumptions based on it.

Qualitative measurements - this focus on results which are not numbers but look to the quality of the data. This doesn't give exact answers instead it allows you to 'get a feel' for how well something is going. It's not as exact but is less inclined to bias than quantitative data.

Many organisation's have become overly focused on basic measures such as Lost Time Injury Frequency Rate (LTIFR) and similar metrics. The focus can end up being on the number rather than on what the organisation could be doing to improve. Sadly, few boards are well informed about health and safety and use little other metrics than accident rates. I believe that Health and Safety professionals have an important role to play in upskilling and advising boards.

Just as financial reporting provides essential information about financial performance (i.e. 'profit and loss' over a period) and financial position (i.e. 'balance sheet' at a point in time), health and safety reporting should provide essential information about performance (i.e. actions and outcomes over a period) and position (i.e. health and safety at a given point in time).

A component to this is getting boards to focus on issues, discuss their views and establish their position on issues such as critical risks to the organisation. These concepts will not be totally foreign to experienced board members as significant time and effort is generally put into understanding and managing other forms of risk. Just as a financial spreadsheet can be a meaningless mass of figures if you don't have the ability to interpret them, the same is true with health and safety information.

Boards need to review the information being reported by management and seriously ask - are we getting the information we need? Another valuable question, particularly as we are in a period of change, is are we up to date with the current situation in relation to health and safety expectations?

This may not be as simple as it sounds as this should be linked to key risks, and there is a tradeoff between large volumes of unhelpful data and not getting enough detail. As an example, I believe lessons learnt from accident investigations and resulting actions being taken is far more important to a board rather than lengthy details about the accident itself.

A board should be able to communicate what their organisation's critical risks are and what initiatives are being worked on to manage these issues. They should know as much about what is being done to make health and safety effective within their organisation's as what is going wrong. A major challenge and admittedly a difficult one for boards are looking for metrics including lead and lag indicators that will give a true picture of performance. The aim should be to get the right balance between lag and lead indicators.

At Avid Plus we believe engaging with directors and boards is crucial to effective health and safety. If you're interested in finding out more go to avidplus.co.nz.