Revitalising health and safety: Health and safety in Annual Reports

Health and safety in annual reports: Guidance from the Health and Safety Commission

INTRODUCTION

1 Managing corporate risk is a key issue for all organisations in the public, private and voluntary sectors. Risks take many forms, as the "Turnbull Report"¹ makes clear. Companies need to have systems in place to manage them. One key risk area is the health and safety of a company's employees, of its contractors and members of the public, who may be affected by its activities.

2 Effective management of health and safety risks will help :

• maximise the well being and productivity of all your employees;
• stop people getting injured, ill or killed by their work for you;
• prevent damage to the company's reputation in the eyes of customers, competitors, suppliers, other stakeholders and the wider community;
• avoid damaging effects on turnover and profitability;
• encourage better relationships with your contractors, and more effective contracted activities;
• minimise the likelihood of prosecution and consequent penalties.

3 The Revitalising Health and Safety Strategy statement published by DETR and HSC in June 2000² sets out how the Government and the Health and Safety Commission (HSC) will work together to revitalise health and safety, and includes the following targets for Great Britain's health and safety system:

4 The Government and the Health and Safety Commission believe that companies reporting on health and safety performance to common standards will help achieve national health and safety targets. This guidance explains how you should address health and safety issues in your company's published annual report on your business activities and performance. It is aimed, initially, at everyone responsible for drafting or approving such reports for the top 350 companies in the private sector. The guidance will be extended to all businesses and organisations with more than 250 employees by 2004.

5 There is currently no international agreement on how multinational companies should deal with the issues covered by this guidance. Such companies should consider whether to publish data for their entire operation, or only in relation to their UK operation. The Organisation for Economic Co-operation and Development (OECD) have published guidelines for multinational enterprises³ and on good practice in corporate governance for multinational companies⁴.

HEALTH AND SAFETY IN ANNUAL REPORTS

6 You should include appropriate health and safety information in your published reports on your company's activities and performance. This demonstrates to your stakeholders your company's commitment to effective health and safety risk management. It shows that you are alert to the need to monitor and improve your health and safety performance.

7 Although the law requires you to monitor your arrangements for controlling health and safety risks it does not require you to include health and safety information in your published reports. But we consider it good practice to do so. This guidance sets out the Health and Safety Commission's views on the minimum health and safety content of reports. The Health and Safety at Work etc Act 1974 and the Management of Health and Safety at Work Regulations 1999 lay down legal requirements for the control of health and safety risks at work.

8 To some, the health and safety content we suggest may seem to focus too much on the consequences of failures in risk management systems. But we have focussed on data which, in general, your company should already have available, rather than suggesting you set up new procedures or information gathering systems. There may be other health and safety developments that you wish to report on to highlight the contribution these are making to improved health and safety performance. RoSPA has recently published "Towards Best Practice"⁵, which sets out some alternative approaches to the reporting of corporate health and safety performance with the aim of stimulating further discussion.

9 As a minimum your company's annual report should address key health and safety issues including the effectiveness of your systems for controlling health and safety risks. Reporting should include the following information, or give an indication of the steps your company is taking to gather the information for publication in later reports :

• the broad context of your policy on health and safety;
• the significant risks faced by your employees and others and the strategies and systems in place to control them;
• your health and safety goals. These should relate to your written statement of health and safety policy (and the arrangements for carrying the policy into effect), required by Section 2(3) of the Health and Safety at Work etc Act 1974. Specific and measurable targets - contributing to those in the "Revitalising Health and Safety" Strategy Statement and "Securing Health Together"⁶ - have a key role;
• report on your progress towards achieving your health and safety goals in the reporting period, and on your health and safety plans for the forthcoming period. There may be specific developments you wish to report on which had an impact on your company's health and safety performance, for example, the introduction of new working practices, technological change or employee training and development. Your company may have significant health and safety plans for the coming years which build on past performance and are noteworthy;
• the arrangements for consulting employees and involving safety representatives

10 In addition, your report should provide data, on your health and safety performance. Unless it is not available (in which case your report should indicate the steps you are taking to gather the information) the following data should be included :

• the number of injuries, illnesses and dangerous occurrences which should be reported to your health and safety enforcing authority by the Reporting of Injuries Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR). This data should distinguish between fatalities, other injuries, illnesses and dangerous occurrences. More inclusive definitions (lost time injuries, for example) may be used. This may be particularly helpful if you include data from overseas subsidiaries⁷. To help with comparison against the "Revitalising" targets, this data should be presented as the rate of injuries per 100,000 employees⁸;

• brief details of the circumstances of any fatalities, and of the actions taken to prevent any recurrence;

• the number of other cases of physical and mental illness, disability or other health problems that are caused or made worse by someone's work first reported during the period;

• the total number of employee days lost by the company due to all causes of physical and mental illness including injuries, disability or other health problems. You should identify the number of these days thought to be caused or made worse by someone's work and a statement of the main causes of absence;

• the number of health and safety enforcement notices⁹ served on the company and information on what the notices required the company to do;

• the number and nature of convictions for health and safety offences sustained by the company, their outcome in terms of penalty and costs, and what has been done to prevent a recurrence;

• the total cost to your company of the occupational injuries and illnesses suffered by your staff in the reporting period.

11 We encourage companies to go beyond these minimum standards. It can be useful, for example, to include information on the outcome of health and safety audits, and on the extent and effectiveness of health and safety training provided to staff.

HEALTH AND SAFETY PERFORMANCE MONITORING

12 HSE guidance, Successful Health and Safety Management⁸, sets out the elements of effective health and safety management systems. Measuring your health and safety performance is a key task for you, in the same way as is measuring your production, service provision or sales. You need systems to measure your health and safety performance which should include both active and reactive monitoring. This information will be the basis for the health and safety content of your published annual reports.

13 Active monitoring gives you feedback on performance before risks result in injury, ill-health or other damage. It includes procedures to monitor:

• progress towards specific health and safety plans, objectives and targets;

• the operation of your health and safety risk management arrangements;

• the effectiveness of the precautions in place to prevent harm, for example by:

14 Reactive monitoring includes gathering data about injuries and cases of ill health (including monitoring of sickness absence records) and incidents with the potential to cause injury, ill health or loss. Data about such health and safety failures provides the opportunity to learn from mistakes, and to improve both your risk management systems and the control of particular health and safety risks.

15 Your board should ensure that your management systems are adequate to provide the factual basis for the regular reports on health and safety performance that the board will need.¹⁰ Periodic audits can also provide useful information on the operation and effectiveness of your health and safety risk management system.

References :

1 "Internal Control: Guidance for Directors on the Combined Code", the report of the Institute of Chartered Accountants in England and Wales on Corporate Governance published in September 1999 (ISBN 1 84152 010 1). The Code states that the directors should, at least annually, review systems of control including financial, operational and compliance controls and risk management that are key to the fulfilment of the company's business objectives.

2 Copies of "Revitalising Health and Safety" are available from DETR Free Literature PO Box 236 Wetherby LS23 7NB

3 See http://www.oecd.org/daf/investment/guidelines/mnetext.htm (document no longer available)

4 See http://www.oecd.org/daf/governance/principles (document no longer available)

5 "Director Action on Safety and Health - Measuring and Reporting on Corporate Health and Safety Performance - Towards Best Practice", Royal Society for the Prevention of Accidents, 2001

6 Copies of "Securing Health Together" are available from HSE Books, or on the Securing Health Together website at http://www.ohstrategy.net

7 More inclusive definitions (lost time injuries, for example) may be used

8 HSE's guidance Successful Health and Safety Management (HSG65 : ISBN 0 7176 1276 7)) explains how to calculate incidence and frequency rates. The guidance is available from HSE Books, price £12.50

9 This means statutory prohibition notices (either immediate or deferred) and improvement notices, issued by the health and safety enforcing authorities

10 See HSC's consultative proposals on a Code on the health and safety responsibilities of directors . The results of consultation, which ended on 9 March, are currently being considered by HSE.