Corporate accountability – Lessons from Lehmans

Yesterday,the CEO of Lehman Brothers, Richard Fuld Jr, faced an inquisition at the House Oversight and Government Reform Committee.  It was uncomfortable to watch but fascinating.

Video of the hearings shows the questions focused on Fuld’s accumulation of wealth in the good times and the retention of wealth in the bad times. There are parallels with the non-financial accountability of corporate leaders on matters such as workplace safety and corporate social responsibility.

The chair of the committee, Henry Waxman, spoke of company documents that 

“portray a company in which there was no accountability for failure”.

Waxman said he was troubled by the attitude of Fuld where Fuld would not acknowledge any wrongdoing. Fuld did accept responsibility for the failure of the company but would not accept that his behaviour or the behaviour of the company he lead, contributed to the failure.  In other words, Fuld would not accept that his company had a culture that may have contributed to the bankruptcy.

There will be more of this type of inquiry and in many countries other than the United States.  OHS managers should not sit back and watch the chief financial officer squirm with discomfit and anxiety for the way that the financiers handle this crisis, as there are important lessons about their own accountability, responsibility and disaster planning.

Is consultation really a “two-way exchange”?

Talking about safety in the workplace is, by far, the best way to introduce and foster a healthy OHS environment.  OHS regulators in Australia have been pushing this for sometime.

A colleague of mine has pointed out an apparent anomaly in relation to consultation posted by WorkSafe Victoria on their website earlier this week.  In relation to Provisional Improvement Notices, WorkSafe says

“Consultation can still be said to have occurred even if:

* the duty holder does not respond to the HSR [Health and Safety Representative] in a reasonable time or at all.  In this case, the HSR can take the failure to respond into account before deciding to issue the PIN.  There does not have to be a two-way exchange – only the opportunity for this to occur;”

This sounds odd to me and I hope that one of the SafetyAtWorkBlog readers may be able to explain.

My colleague posed this question on the issue of consultation:

“If the duty holder generated an OHS issue and the HSR did not respond, would there still only need to be an ‘opportunity for this to occur’?”

It seems a far question when workplace consultation is supposed to be a “two-way exchange”.

Latest Australian farm injury statistics

The Victorian Injury Surveillance Unithas released its latest quarterly statistical report, HAZARD.  Number 68 provides a fascinating picture of the farm safety in Victoria, Australia.  I strongly recommend that you get on the mailing list so that you can understand their statistical sources and limitations, as these are important and there is not enough time to discuss them at SafetyAtWorkBlog.HAZARD - Edition 68

Farm injury statistics for the period 2004-06 found 41 unintentional farm injury deaths, 1,765 hospital admissions and 7,259 presentations to hospital emergency departments.  Years ago I remember (vaguely) a ratio of 17 injuries to every farm death.  On my calculations (and remember I am an Arts graduate) the new statistics show a ratio of 43 hospital admissions for every fatality or 177 injuries (ED presentation for every fatality.

The detailed breakdown of agency of injury, age of injured person etc. makes this a fantastic resource for those working in farm safety.

One of the benefits of this type of research is that it allows us to determine the success of safety interventions, usually coordinated by government agencies.  (One could argue that this is one reason for the paucity of research on intervention activities) In the VISU report’s discussion it said that

“No studies have reported that farmers’ or farm workers’ attendance at farm safety courses has reduced injury risk on their farms…. [and]… the authors suggest that safety training is better applied by farmers and farm workers if it is delivered in the context of farm skills-based training rather than stand-alone farm safety sessions.”

This confirms the adage that one can know how to do something safely but one has to see it being done, to be convinced it is the right way.

Part of the report’s conclusion is that

“…. the evidence suggests that education alone is insufficient to affect the adoption of safe behaviours and technologies.”

I strongly recommend you download the report and read it carefully.  There may be only a small amount of evidence and research in this sector but what there is VISU has identified and analysed.

New Work Safety Ads from Australia

Twenty years ago, I was at a FutureSafe conference in Sydney, Australia, where Eileen McMahon of WorkSafe Victoria showed a series of graphic ads.  The audience were impressed and roundly supported the use of such ads in their own States.

At the time confronting ads were de rigueur as road safety campaigns had been using the same technique for a while.  Ads from both government authorities won critical acclaim and many awards.

Confronting workplace safety ads recently ran on Canadian television to a mixed reception.  WorkSafe Victoria has clearly adapted these ads and their concepts to the Australian circumstance in its campaign that was launched on Australian television on 5 October 2008.

 

WorkSafe Young Workers Campaign
WorkSafe Young Workers Campaign

The Australian ads have emphasised the  lack of information and induction provided to young workers.  Rather than having the incident victim talk to the camera, WorkSafe emphasises the confused thought processes of a young person in a bakery being unsure of how to operate a machine safely, a young man experiments with a nailgun, and a young person scalded in a commercial kitchen.

In The Sunday Age, WorkSafe CEO, John Merritt, said that the graphic content was to gain the attention of young workers:

“It’s confronting, it’s not pleasant, but young workers have challenged us to confront them with the reality of what happens…”

“The guts of this campaign is to say to young workers: for goodness sake, if you’re not sure about something, speak up.”

“”It was clear from the research that nothing else would have impact.”

Media reports make no acknowledgement of the Canadian campaign which seems a little odd given the similarities of the kitchen-based ad, in particular.

The challenge of this type of ad is to run it for just long enough to make an impact but not so long that viewers get “graphic fatigue” – particularly important for appealing to young workers.  This is also a lesson that should have been learnt from the original WorkSafe ads a couple of decades ago.  The combination of both a workplace safety campaign and road safety campaign using the same techniques limited the effectiveness of both.

There is no doubt about the validity of the safety risks in WorkSafe’s target market but it is vital that these ads be balanced with the more gentle and parent-friendly “homecoming” ads and the workplace inspector ads aimed at business operators.  All three should be broadcast over the same period in order to provide the broadest context and the one that reflects the reality.

 

WorkSafe Young Workers Campaign
WorkSafe Young Workers Campaign

Clearly, the WorkSafe ad campaign is intended to maximise the retirn on the advertising budget by generating media debate.  This was vrtually acknowedlged by John Merritt when he said

“There will undoubtedly be a conversation and a debate about that message.”

A danger with this tactic is that the ads become the story rather than people discussing the safety of young workers.  Let’s watch who supports the ads and who criticises.

When psychosocial hazards originate from poor management

There are still some OHS professionals who are uncomfortable with approaching workplace hazards that do not involve nip-points and energy-transfer.  In fact there are some who can’t cope with the industrial relations interplay with occupational health and safety. A major industrial relations problem ran for some time at Tristar Steering and Suspension.  The absurdity of this…

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Workplace Safety at Board Level

In May 2008, the Safety Institute of Australia held a conference where, for one day, CEOs and senior executives talked about their experiences with workplace safety and how they manage OHS in their workplaces and with their boards of management. The presentations were of variable interest but those that were good were very good.  The…

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OHS uniformity is looking unlikely

Michael Tooma, a lawyer with Australian law firm Deacons, has stated

“Despite the enthusiastic manner in which the harmonisation agenda has been pursued, and the appearance of progress in that regard, it is likely that the quest for uniformity in OHS laws across Australia will remain elusive.”

His reasons for this statement in a recent edition of Safety Solutions magazine (August/September 2008) are

  • The National OHS Review was set up to develop model legislation for implementation in each State jurisdiction;
  • Duty of Care is absolute in two States, Queensland and New South Wales;
  • “Reasonable practicable” is not applied in each State to the same extent;
  • The New South Wales right for unions to undertake prosecutions for OHS breaches;
  • Not each State has a legal forum dedicated to handling OHS prosecutions;
  • The level of enforcement of OHS law is inconsistent between States; and
  • The level of maximum penalty available.

Tooma is worth listening to for lots of reasons but principally he seems to be less wrapped up in political baggage compared with other OHS legal commentators.

Tooma seems to favour an industrial or OHS court because of the substantial jurisprudence that has been achieved through the New South Wales Industrial Commission.  I support the expansion of this type of court as NSW decisions, regardless of legislative differences, can be particularly useful is clarifying the most suitable OHS interventiosn for particular hazards.

He also says that enforcement must be consistent.  This is true or else, if given the chance, an employer could undertake certain hazardous tasks in the jurisdiction where enforcement or prosecution is less effective and active.

This relates, in a way, to Tooma’s last point on penalties.  An OHS offence in Victoria could lead to jail but in Tasmania, not.  A monetary fine of over $1 million could apply in some States with only $180,000 in another.

It seems that the fantasy of one OHS law for Australia will remain a fantasy.  The trick will be whether, after months of government review and hundreds of submissions, there will be sufficient consistency across the States.  The likelihood is that we will be slightly better off but still with State variations.  We have a little less red tape but red tape nonetheless. 

My question will be, was it worth it?