Tag: CEO

Executive resigns over work-related suicides

According to various media reports, a senior executive of France Telecome has resigned due to the mismanagement of the organisational restructure of the company which has been happening for almost two years and that, some say, has led to suicides.

One report says:

“France Telecom’s deputy chief executive Louis-Piere Wenes had faced calls to resign from employees who say management policies are responsible for the firm’s so called “spiral of death”.”

A UK newspaper includes a quote from M. Wenes:

“Despite the hard edge of the technological and economic fight, especially in our business, nothing can justify men and women putting an end to their lives. Today, like before, I cannot accept it.”

France Telecome’s media statement reads:

“Louis-Pierre Wenes, the current Deputy CEO in charge of Operations in France, has asked Didier Lombard, Chairman and CEO of France Telecom, to relieve him of his responsibilities. Didier Lombard has accepted this request and thanks Louis-Pierre for all that he has accomplished since December 2002 and for the significant contribution that he has made to the turnaround and the performance of the Group.

As of today, Stephane Richard is appointed Deputy CEO in charge of Operations in France.”

UPDATE: 7 October 2009

Additional information and links available HERE

Safety Institute gets a seat at the OHSAC table

SafetyAtWorkBlog has been informed that the current CEO of the Safety Institute of Australia (SIA), Gary Lawson-Smith, has accepted an invitation to join the WorkSafe Victoria’s OHS Advisory Committee (OHSAC), as a representative of the SIA.  This is a terrific win for the SIA as it adds a degree of legitimacy to the organisation’s developing professionalism.

Lawson-Smith has had a long administrative role in the airline and air safety sectors and was a Carlton footballer for a short time.  He has no formal OHS qualifications but an OHS qualification is not a prerequisite for OHSAC.

Also, it is understood that the OHSAC position is conditional on Lawson-Smith keeping the CEO role with the SIA.  If he leaves, the SIA could nominate someone else for the role.  SafetyAtWorkBlog notes that Lawson-Smith had advised the SIA National Board previously that he was not renewing his contract at the end of 2009 but he is believed to have been talked out of this decision.

Several other OHSAC appointments have also been rumoured.  It is understood that the “tenure” of one of the two independent representatives, both who have been on the committee since its inception, has not been renewed.  It seems odd that one independent representative is “let go” and the other retained.  It would be interesting to know the reasons for departures from the Committee as much as the reasons for new members.

Whether the SIA appointment is a direct replacement is unclear.  Whether the SIA is to be one of the two independent representatives (as required under the Victorian OHS Act 2004 (Division 6 Section 19) is also unclear.

The Act requires

“2 independent persons who the Minister considers have appropriate expertise and experience in occupational health and safety”

The SIA Victoria Division has a number of very prominent OHS academics and practitioners but, even though OHSAC reports to a Victorian administrative agency, it is understood that the Victorian WorkCover Minister, Tim Holding’s, letter was to the Safety Institute’s CEO, a national position.

Prominent ergonomist, Professor David Caple, is an independent OHSAC member well known to SafetyAtWorkBlog.  Caple takes his advisory role seriously by encouraging Australian safety professionals to raise any OHS concerns with him so that he may be able to provide a broader experiential context to some of the WorkSafe Board’s initiatives.  He makes an annual appearance at the Central Safety Group in Victoria to encourage a broad range of input.

One of OHSAC’s legislative  functions is to

“to enquire into and report to the Authority’s Board of Management on any matters referred to it by the Board in accordance with the terms of reference given by the Board; and

advise the Board in relation to:

  • Promoting health and safe working environments: and
  • The operation and administration of this [OHS] Act and the regulations…”

The significant element of OHSAC is that it is only reactive to the WorkCover Board.  If the Board does not seek opinions, effectively, OHSAC has nothing to do.  The Victorian Trades Hall Council, in its 2008 submission to the Model OHS Law Review, expressed great concern about OHSAC

“The Occupational Health and Safety Advisory Committee (OHSAC) is established by s 19 of the Occupational Health and Safety Act 2004 (OHSA 2004).  However, this body has limited functions and no reporting line to the Minister.  Other than a specific role for OHSAC in the development of ARREO training, the OHSAC is limited to reporting to the Board on matters referred by the Board.  It has no capacity to ‘set the agenda’.”

“The Committee has met only 9 times since March 2005 and other than resolving the training issues relating to ARREOs, which is a specific requirement of OHSA 2004, the Committee has not been given the opportunity to deal with any strategic issue in any meaningful way.”

“Decisions of the Board on OHS are not transparent. The Board operates without the involvement of key stakeholders and relies on the “good will” of the Chair and CEO to relay information to the Board and back to the OHSAC. It is unacceptable for decisions relating to the VWA as a regulator of OHS to be inaccessible to scrutiny.”

SafetyAtWorkBlog is always concerned about the transparency of organisations associated with the promotion of safety and there is very little public information available about OHSAC.  Even the membership of the committee is taking SafetyAtWorkBlog some time to put together.  This may be due to the committee membership being updated, as indicated by the SIA’s inclusion, but even the previous committee membership is proving hard to collate form public sources.

The issue of transparency and communication is directly relevant to the OHSAC participation of the Safety Institute of Australia.  SafetyAtWorkBlog has heard that all committee representatives of the SIA, nationally and divisionally, are obliged to sign a Deed of Confidentiality.  Whether this applies to the SIA’s CEO is unclear as Gary Lawson-Smith is not listed as an official member on the National Board.

Some would assert that even if OHSAC did report to OHS stakeholders and members of the OHSAC representatives, they do not do anything of real interest.

The concerns over OHSAC are not restricted to Trades Hall, one of the few public members of OHSAC.  Parliamentarian Bob Stensholt undertook an administrative review of the 2004 OHS Act and expressed the following thoughts about OHSAC:

“Although I note WorkSafe’s comments that OHSAC has not been frequently required to consider key strategic issues because they have not arisen, I am of the view that the Committee is not operating as well as it could be.  There is a lack of conviction regarding the potential effectiveness of OHSAC from all stakeholders.  This impedes the Committee’s ability to work effectively as a representative stakeholder group.”

“It seems OHSAC has primarily been treated as an ‘information sharing’ committee by WorkSafe.  I do not believe this is what was intended by Parliament when the Bill became law.  Rather than merely providing OHSAC with its business plan for any particular financial year after it has been settled (for example), WorkSafe should also be prepared to engage OHSAC on key strategic issues as they arise in the rolling out of Strategy 2012, rather than just providing the Committee with updates as to how Strategy 2012 is tracking.  A primary consideration for WorkSafe in making OHSAC more effective should be to ensure it adopts”

If the WorkCover Minister, Tim Holding, is reviewing the membership of OHSAC in response to some of these concerns, his action is to be applauded, but, at the moment, OHSAC looks ineffective and of limited use.

The Victorian Government’s response to the Stensholt report referred Stensholt’s recommendations on OHSAC to the Victorian WorkCover Authority’s Board of Management for consideration.  OHSAC works to the direction of this very Board.

Gaining a seat at the OHSAC table remains a major feather in the cap of the SIA and the years of lobbying undertaken by a number of SIA officials should not be dismissed.  The size of the feather in the cap, however, depends on who one talks to.

Kevin Jones

Lawyers identify contentious OHS law elements

The Safety Conference scheduled for Sydney at the end of October 2009 has finally got an OHS issue that is contentious and is also a work in progress.  The unions are starting to make noise on the OHS laws.  The employer groups are manoeuvring cautiously.  The safety professionals are largely silent (again) but the lawyers – the group with perhaps the most to gain from the new harmonised OHS laws – are set to analyse and debate.

A media statement from the conference promoters was distributed on September 8 2009 and, very differently from most media releases, is informative without being pushy.  Below is the body of that statement:

Three issues are set to dominate discussion: the burden of proof, the personal liability of company officers, and the impact on prosecutions. Neil Foster, senior law lecturer from the University of Newcastle, believes personal liability is at the heart of the changes.

“The harmonisation process seems to have been driven by directors’ fears of personal liability and the hope that there would be some watering down of the laws,” he says.  “In my view, the Model Act inappropriately waters down the personal responsibility of company officers, although I do support some of the proposed changes in this area, including the acknowledgement that the officer has obligations to exercise due diligence to protect the workers. But with the change to the current onus of proof provisions, it is quite possible that guilty people will now escape justice.”

Michael Tooma of Deacons law firm, who will moderate The Safety Conference’s harmonisation panel discussion, says that while current state laws differ in their approach to the approach to personal liability of officers, all will be reshaped by the proposed Model Act.

“Despite the range of liabilities, all have one thing in common: the officer will be personally liable only if their company commits an offence,” Mr Tooma says. “The new regime does not require this.”

“Under the approved recommendations for the new OHS laws, officers will be liable if they fail to exercise due diligence. That is, the duty has been recast as a positive obligation on officers to proactively ensure compliance with OHS laws rather than an attributed liability in the event of a breach by the company. This is a landmark shift in approach which will have a significant impact on OHS enforcement and compliance.”

The definition of “due diligence” may also be contentious.

“The Workplace Relations Ministers’ Council (WRMC) did not approve the recommendation for a definition of due diligence,” Mr Tooma says. “The Committee had recommended that due diligence be defined in line with existing case law on its meaning, drawn largely from NSW where the term has been in use for almost 30 years.”

“Instead, WRMC preferred to rely on the Courts to interpret due diligence. Practically, that means that the true harmonisation of the scope of the personal liability of officers may have some way to go as each State Court and Territory Court attempts to interpret due diligence in the context of the case before it until a case is brought to the High Court so that an authoritative determination of that term is made which is binding on all state and territory Courts.”

Michael Selinger of Holding Redlich Lawyers points out that company officers found guilty will face increased penalties, rising from the from the current maximum in NSW of two years in prison or fines of $55,000 to fines of up to $600,000 for an individual and five years in prison.

New South Wales employers, however, may enjoy some relief as the burden of proof shifts to prosecutors.

“The new Model Act will have a more significant impact on New South Wales employers than those in any other states because the Model Act is largely based on the Victorian and Queensland Acts,” says Mr Selinger.

“For New South Wales, the onus of proof will move away from the employer as a result of the inclusion of the qualifier of ‘reasonably practicable’ in the general duty to ensure safety under the Act. When it comes to proving liability, the prosecutor will now need to show the employer has not taken all reasonable steps to prevent injury.

“In 95 per cent of cases, shifting the burden of proof to the prosecutor won’t affect the outcome. This is because when an injury occurs, employers examine the workplace to see what actions need to be taken to prevent a recurrence – by doing that, they show that there were reasonable steps that could have been taken, which makes it easier for the prosecution to prove liability. To some extent, there’s always been this tension between trying to improve the safety system and protecting your legal position.”

“The legislation in NSW has historically been enforced more vigorously than in other jurisdictions but most OH&S regulators only initiate a prosecution if it is in the public interest and they have a good prospect of success. Under the new Act, there’s likely to be more of an emphasis on education and cooperation between the regulator and business. We won’t really know the answer to whether there’s likely to be fewer prosecutions until the new Act is implemented – at the end of the day, how it is enforced will be the key factor. The regulator will still have plenty of enforcement tools and there is likely to be a uniform enforcement policy applied across the country.”

On the other hand, Neil Foster believes the onus of proof belongs with employers.

“The Model Act has been legitimately described as ‘a race to the bottom’,” Mr Foster says. “The onus of proof should be placed on employers because they have the greatest control over safety: how hard people work; safety procedures; how money is spent; and safety policies. There is still a lot of carelessness in workplaces and WorkCover sensibly doesn’t launch prosecutions unless there’s a good chance the employer is guilty and hasn’t taken reasonable precautions. I think the NSW safety system has been working well.”

Scarlet Reid, special counsel for Henry Davis York says the impact of reversing the onus of proof is uncertain.

“From a practical perspective, this could make convictions more difficult to obtain in New South Wales,” she says.  “In the absence of any changes that stipulate which courts hear prosecutions at first instance, it remains to be seen if this is in fact the case. It is questionable as to whether real uniformity can be achieved without examining this important issue.”

Ms Reid says employers were likely to benefit from other changes under the proposed Model Act.

“Defendants in NSW and Queensland should benefit from the proposed expanded appeal rights,” she says. “Defendants in NSW may also find comfort in the proposal to abolish the prosecutor’s right to appeal against an acquittal.”

If employers are winners under the changes, unions, who will lose the right to launch prosecutions, protest vigorously against the proposed Model Act, claiming it would be detrimental to safety. Neil Foster agrees.

“The changes to be brought in under the harmonisation process send a message from government to employers: safety’s been too tough and that we’re not so worried about it anymore. It’s very sad.”

Kevin Jones

The importance of independent advice at Board level

The recent court decision by Judge Gzell on the previous directors of James Hardie Industries generated considerable media attention in Australia for many reasons; a primary reason is that the company is perceived as making its profits at the cost of its employees’ health.  The social and corporate cost of inadequate workplace and product safety management is now clear to everyone, even public policy makers.

Another area of attention has come from how Judge Gzell’s decision has affected the operation of company boards and the roles of directors.  This is hugely important to the big end of town but the rules apply to boards big and small.  In August 2009 Regnan (Governance Engagement & Research Pty Ltd) identified three major points from Gzell’s decision; the third is the one that is most broadly relevant.

“Non‐Executive Directors – Today more than ever, investors need competent directors from diverse backgrounds, and this case highlights the critical role non‐executive directors play in overseeing and interrogating company management.  While the facts of the James Hardie case are very specific and do not create additional responsibilities for directors, it does underscore the value at risk when non‐executives fail to perform their role and highlights the role of independent directors to satisfy themselves through the taking of advice wholly independent of management.” [my emphasis]

The need for independent advice is regularly identified as an important element of effective risk management for all industry and professional sectors.  A board of “yes-men” can do a disservice to an organisation in a very short time.

The OHS professional often seeks a “devil’s advocate” role at senior management level yet to achieve that level of influence one often has to “sell one’s soul to the devil”.  It may be possible to be an independent director who holds strong OHS opinions but one would never achieve such a position unless one could demonstrate business acumen, and business acumen often requires the dilution of principles.

The environmental movement has shown one pathway to corporate influence but it is hard to identify an environmental advocate who has achieved corporate influence while maintaining a grass-roots credibility.  Similarly, at some point in the OHS professional’s career it is necessary to choose between the ideology from which progression has come and the career progression that requires a reinterpretation of that ideology into the corporate mould.

Is it possible to represent core OHS principles at board level without “joining the darkside”?

Kevin Jones

James Hardie directors face the consequences of their poor decisions

SafetyAtWorkBlog has kept a watchful eye on the long saga involving the directors of James Hardie Industries and their mishandling of a compensation fund specifically established for victims of the company’s asbestos products.  The compensation fund story has been handled well by Gideon Haigh in his book on the company.

The saga has since evolved into one of the duties and actions of the board of directors, moreso than one of compensation.  Today, 20 August 2009, the previous directors will be told of the financial and professional penalties determined by the New South Wales Supreme Court.

The ABC News online has an article about the impending court decision but more relevantly to the OHS and compensation issues is the fact that the existing compensation fund runs out in 2011 and the company says that the current economic climate does not allow for any more funds.  For a company that has earned good profits from asbestos over many decades, two years of poor corporate performance does not seem to balance the scales.

Too many corporations are using the global financial crisis to mask their own management failings.  The United States and England have seen this more than most countries.

The ABC was able to interview the current CEO of James Hardie Industries, Louis Gries, who is not as damning of the past directors’ decisions as some might expect, and the reporter, Sue Lannin, asks many direct questions about the company’s responsibilities to victims of its products.  This interview deserves careful listening.

Company directors around Australia are watching how the court case ends and the size of penalties they may face if they make similar decisions.  The OHS element is oblique to the issue of directors’ responsibilities but it is the hot topic in Australia at the moment and many OHS professionals talk with these same directors.  It may be necessary to adjust one’s language or message when talking safety with them from tomorrow on.

Kevin Jones

Do health professionals make the best OHS leaders?

David Michaels has been nominated by President Obama as the new Assistant Secretary for the Occupational Safety and Health Administration in the Department of Labor.  (A brief profile of Michaels is available HERE.)  A posting at a US Workers’ Compensation website links through to a discussion on the potential impacts of the Michaels’ appointment.

There are several telling quotes in the podcast.  Sidney Shapiro, a law professor at Wake Forest University, says that OHS achieves more when run by someone with a health professional background.

“…I think it’s important that we know that David Michaels is a health professional.  And I think OSHA’s done best when it’s had administrators from the public health community.  It is, after all, a public health agency.  More times than many of us would wish, it’s been headed by someone who’s been an adamant critic of OSHA and has come from industry or been an industry lawyer.”

Whether this position can be applied to regulators in other jurisdictions is an interesting question.

The Chair of the UK HSE Board, Judith Hackett,  has a background in petrochemicals.  The CEO of the HSE, Geoffrey Podger, has a background in the civil service, health and food safety.   The chair of the Safe Work Australia Council, Tom Phillips was the former CEO of car manufacturer, Mitsubishi, and has served on a range of industrial company boards in South Australia.  The Chair of WorkSafe BC board, Roslyn Kunin, harks from human resources and the labour market.   Greg Tweedly CEO of WorkSafe Victoria has a background in insurance and compensation.  Nina Lyhne of WorkSafe WA comes from road safety and compensation.

This unrepresentative sample shows a mix of experience and not all from health promotion.  If the list was comprehensive, it would be interesting to see if Shapiro’s comments stack up and to see how many trade union officials have moved to “the top” or will simply remain “on the board”.

The Living on Earth podcast includes the following quote from Michaels from some time ago:

“What polluters have seen is that the strategy that the tobacco industry came up with, which essentially is questioning the science, find the controversy and magnify that controversy, is very successful in slowing down public health protections.  And so the scientists who used to work for the tobacco industry are now working for most major chemical companies.  They don’t have to show a chemical exposure is safe.  All they have to do is show that the other studies are in question somehow.  And by raising that level of uncertainty, they throw essentially a monkey wrench into the system.”

This statement could generate optimism for OSHA’s future but there are many examples of the views of environmentalists changing once they move into the corporate world.  Politicians like Australia’s Minister for the Environment, Peter Garrett, is an obvious recent Australian example.  Harry Butler in the 1970s was roundly criticised for “selling out” to the petrochemical industry.

However, the appointment of David Michaels pans out, it will be an interesting one to watch, particularly if the US Democrats can stay in power for more than Obama’s two terms.

Kevin Jones

Maintain instead of repair

Every country has its share of high-fliers who “burn out”.  Many fade away from the public eye with their careers over.  Frequently this path to wealth and prominence is not perceived as a workplace health or safety matter.  Some people decide that the health trade-off of multi-million dollar salaries is worth it.

Sadly the psychological reality of this personal decision is often masked by clichés.  Frequently, executives say that a major motivation for their decision is “to spend more time with my family”.  Many executives may believe this to be a major part of their decision, but regrettably, this worthy sentiment has become a cliché – the equivalent of a beauty pageant winner working toward “world peace”.

The family-time phrase/reason/excuse signifies an important element of the executive’s personality.  They were willing to sacrifice decades of their relationship with their partner and to be absent from the development of their children for money.

If any of these departing executives use the family-time phrase in the same departure speech or media exit-interview  as regaining “control of their lives” to “re-engage with the most important people in my life”, ask the executives, or politicians, “how do you justify ignoring your family over your career?”.

In some cases one could be more specific.  “Do you think that your multi-million career was related to your daughter’s persistent attempts to kill herself?”  “After being absent so frequently and for so long, are you still justified in describing your marriage as a loving relationship, or your partner as your ‘soulmate’?”  “Was your million-dollar salary really worth it?”

Int he wake of the self-generated corporate financial crisis, some corporate executives are re-examining their ethics and morality.  Not enough are going through this but it’s a start.  Most say they operate for the benefit of shareholders but they cannot deny the reality of massive remuneration for their efforts.  What they are ignoring is the individual cost to their loved ones of these efforts.

Should we look up to the billionaires who sacrifice the wellbeing of others they say they love to chase the dollar?  Are these the paragons of our society?

People are trying to maintain or establish a work/life balance.  (There are several articles at SafetyAtWorkBlog that report on this movement.)  But the reality is that to achieve a work/life balance, one must be prepared to sacrifice income.  This may involve the necessity of achieving a certain stage in one’s career that is not the top, but still a position of value in the company and, equally important, of value to one’s family and even one’s own psychological well-being.  If one’s colleagues fail to understand this decision, the workplace culture is faulty, and probably irreparable.

If the ultimate ideal is to have a happy, functional, and sustainable community, one must examine one’s own motivations, and one’s own personal priorities.  Everyone must consider whether we want to emulate those who sacrifice their family’s welfare for money or whether we support those who rebut the “glory of the high-achiever” and emulate those who love their family enough to spend time with them through their career.  Maintenance is easier than repair in life as in safety management.

Kevin Jones

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