The role of health and safety in the food and beverage sector
If you’re a non-executive director (NED) at a food and beverage business, supporting improved health and safety is one area where you can have significant impact.
Although the core principles of health and safety law have remained unchanged for some time (see below) the Health and Safety Executive’s (HSE) enforcement activities are evolving, with the regulator indicating resourcing moves aimed at increasing the number of successful prosecutions.
This change of attitude, coupled with the substantial, and in some cases unlimited, fines the courts can now hand down for health and safety offences, means the risk profile of organisations within the food and beverage sector may have significantly changed. In the absence of good governance, this increased risk profile may not only have a significant and adverse impact on the performance of the business, it could also create personal liability for those directors and managers charged with running the organisation, including NEDs.
As such, health and safety governance must be a key agenda item for boards of any organisation working in the food and beverage sector and NEDs have a central role to play in driving this messaging.
What are the health and safety governance obligations on food and beverage NEDs?
Before we look at how NEDs can own the health and safety agenda, it’s worth considering the core principles of health and safety law and the various governance obligations organisations must comply with.
The Health and Safety at Work Act 1974 requires employers to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all employees, as well as any non-employees who may be impacted by the way the employer conducts its operations.
It’s important to remember that an accident or injury doesn’t need to have happened for an actionable breach to occur.
The Institute of Directors and HSE have issued guidance INDG417(rev1) stipulating that protecting the health and safety of employees or members of the public who may be affected by your activities is an essential part of risk management that must be led by the board.
The HSE has issued further, sector-specific guidance A recipe for safety Health and safety in food and drink manufacture, highlighting the need for attitudes and behaviours that encourage safe and challenge unsafe behaviour. While these attitudes and behaviours apply at all levels, a culture of health and safety first can only be led from the top.
The Companies Act 2006 places statutory duties on executive and non-executive directors alike to promote the success of the company, exercise independent judgement and exercise reasonable care, skill and diligence, amongst other obligations.
The U.K. Corporate Governance Code, meanwhile, applies to companies with a premium listing on the London Stock Exchange and states, “Non-executive directors…should provide constructive challenge, strategic guidance, offer specialist advice and hold management to account.”
So, what practical steps can NEDs take to lead the health and safety conversation?
How can NEDs challenge boards on health and safety?
NEDs need to be familiar with the organisation’s strategic approach towards health and safety management and then challenge the executive team to evidence it is delivering the core objectives.
Initial areas you might focus on here include establishing the executive team’s confidence there are no coverage gaps. This may involve assessing whether the data the board relied on in drawing its conclusions on coverage is sufficient.
Other useful lines of enquiry include seeking evidence to demonstrate employees are adhering to the relevant policies and procedures ‘on the ground’. For example, what happens to those employees found working in breach of policies and, crucially, what is being done to redress any systematic non-compliance? More broadly, how is the health and safety governance data and information presented to the board and analysed to establish trends and other key performance indicators?
Further areas of interrogation include accident and near-miss reporting and evidence of learnings and improvements being implemented after things have gone wrong, as well as the organisation’s monitoring of occupational ill-health.
Finally, another area of scrutiny, which is often overlooked, is how far the range of data and information being presented to the board by the operational teams is validated by external scrutiny. This is about how the board satisfies itself it really does know and understand what is happening ‘in the real world’ as compared to the information they’re being presented with.
As a NED, you’re in a good position to play devil’s advocate on health and safety by providing an outside perspective and constructive challenge, with the ultimate aim of ensuring the long-term viability of the business in the face of increasing health and safety risks.
However, you and the wider board can only play an effective role in the process of ensuring the business can prove health and safety is a real priority and is compliant with health and safety laws if you have sufficient knowledge and understanding of the relevant issues. Ensuring business leaders understand this complex area is a key strategic consideration all boards and individual directors should factor into their development plans.
Appropriate training and support can help boards understand how it can identify opportunities to modify and enhance existing systems and procedures to meet regulatory standards and promote a safety mindset and culture.
As HSE says, robust health and safety is not just about the cost of claims and replacement labour, it is about the whole economic wellbeing of the business, as well as trust and reputation.
To help ensure your business has the right policies, procedures, and documentation in place to ensure liability claims brought against you can be met with a robust defence, get in touch with WTW Food and Beverage Practice.
