Reporting on corporate health and safety performance

Accounting for performance internally
In order to manage health and safety effectively, it is essential that, periodically, organisations should set out a clear and concise account of their performance against strategy for the whole workforce, but especially for managers, safety representatives and health and safety professionals. This is to enable all employees to understand progress in achieving corporate health and safety objectives and for those with management responsibilities to communicate such information to key internal and external audiences.

Many large companies produce internal health and safety performance reports, often in conjunction with reports on environmental performance. Smaller organisations too can provide simple periodic reports on progress in tackling health and safety matters using their internal communications procedures.

Reporting externally
The requirements of the workforce for information on OS&H performance overlap with those of a number of other external stakeholder audiences such as shareholders as well as regulators, insurers, clients, local and national political bodies and the media. Many companies have developed an 'open' approach to OS&H performance reporting, although the level of detail and approach may be varied on occasions to take account of varying audience needs and characteristics.

Costs and benefits of reporting
Enhanced OS&H reporting by companies imposes certain costs but there are also many potential benefits.

Costs include both those associated with editing and publishing the required information as well as those arising from the maintenance of record systems, monitoring and the analysis and verification of the resulting data. It could be argued that many of the data are (or should be) gathered for operational purposes anyway and thus the main additional costs will be those associated with aggregation, analysis and dissemination. There could be disproportionately greater costs for smaller organisations, particularly if the information needed was extensive.

Besides direct financial costs there may be other indirect costs incurred in reporting, particularly if the information gives a negative impression of a company's approach to health and safety and if quoted inappropriately in the media or used as evidence in civil proceedings.

So far as benefits are concerned, in RoSPA's view the advantages to annual OS&H performance reporting are:

It provides essential information to shareholders on the organisation's approach to risk management and its effectiveness, explaining the organisation's approach to OS&H as a key business performance objective.

1. It provides essential information to other key stakeholders/partners such as the workforce; contractors/suppliers/customers; regulators, insurers, political representatives and campaigning organisations and can therefore complement the existing requirement to report on environmental performance. In addition, it can provide a basis for providing information to the media and wider public.
2. It can enable companies to report on progress towards the achievement of improvement targets.
3. It can help to create a greater understanding of the 'management system' approach to OS&H.
4. It can provide a basis for 'benchmarking', for example, within a sector or a group of companies.
5. It can help to demonstrate openness and transparency, both internally and externally.
6. It can provide a basis for celebration of achievement, helping to demonstrate and reinforce the organisation's H&S values and culture.
7. It provide a useful way of collating summary information on OS&H in support of other business processes such as tendering, entry to awards schemes and so on.
8. For those companies already achieving high standards, publicising a positive OS&H profile can help to help secure competitive advantage in the marketplace.

Looking at the balance of costs and benefits, it might be hard to show a direct causal link between corporate performance reporting and any subsequent reduction in levels of risk, harm and loss. However, creating a climate in which corporate OS&H reporting became an established norm, with an accounting requirement affecting the company at its highest level, would create a powerful incentive in companies with deficient senior OS&H management to improve. The main net benefit therefore would be in enhancing the influence of other OS&H performance 'drivers' (particularly those associated with fear of loss of reputation, business opportunities and competitive advantage).

In RoSPA's opinion it seems likely that, for the economy as a whole, the additional costs to companies of reporting will be significantly outweighed by the benefits of improved OS&H performance as well as the other incidental commercial benefits of the kind referred to here (although detailed CBA studies would be required to confirm this). The more organisations are able to communicate their OS&H performance data in a variety of ways (for example, in tender documentation, in seeking awards, in communicating with customers, insurers, regulators, the media and so on) the greater the resulting benefits are likely to be.