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February 6, 2009

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Unions and business on collision course over directors’ duties

Calls have been renewed to put directors’ duties on a statutory

footing, after an HSE-commissioned study indicated that the voluntary

code, published in October 2007, had failed to make an impact among

company directors. But manufacturers’ organisation, EEF, has urged the

Government to resist such pressure, pointing to conflicting findings

that directors of manufacturing companies are, in fact, taking their

responsibilities more seriously.

The HSE study, undertaken by Databuild, aimed to assess the extent to which directors are aware of the joint HSE-Institute of Directors’ (IoD) voluntary code on directors’ duties on health and safety. The Executive has warned employers that they have until 2010 to demonstrate that the voluntary approach works, or face a change in the law.

Telephone interviews, which took place over the summer, found that just one in four directors, or equivalents, were even aware of the guidance — although in larger organisations this figure rose to 40 per cent. Penetration was greatest in the NHS sector (54 per cent) and weakest in hotels and catering (19 per cent). Awareness was also low in the relatively high-risk sectors of manufacturing (24 per cent), and transport and communication (26 per cent).  One in three construction companies surveyed knew of the guidance.

Half of those aware of the publication had read the guidance, and, of these individuals, half had taken, or planned to take, further actions.

The findings have prompted construction union UCATT to reiterate its call for statutory duties to be introduced. General secretary Alan Ritchie said: “Once again it has been shown that construction companies have complete contempt for the voluntary code. This is not arguing over bits of papers. The introduction of statutory directors’ duties would help make industries like construction safer almost overnight.”

However, the EEF group has urged the Government to resist pressures for new legal duties on directors, after a survey of its members painted a different picture. According to EEF’s 2008 Health and Safety Survey, directors in more than 80 per cent of companies are actively involved in managing health and safety, while more than 75 per cent of firms are discussing health and safety at board meetings. Moreover, in the last three years, there has been a 40-per-cent rise in the number of boards who monitor health and safety management as part of their key performance indicators.

Commenting on his organisation’s research, head of health and safety policy at EEF, Steve Pointer, said: “This survey shows that active leadership by directors is now very definitely the norm, not the exception.”

He continued: “The law already allows directors or managers to be held to account if their personal actions put someone at risk. Adding specific requirements, such as appointing a single director to be charged with managing health and safety, could only be counter-productive. It would send a message that fellow directors can forget all about health and safety, which would be disastrous.”

He described the Databuild survey “as an important first step”, but criticised its methodology, saying “asking busy people about awareness of a leaflet does have limitations”.  

The head of the HSE’s Business Involvement Unit, Tony Bandle, accepted that “these are trying times for businesses, their suppliers and customers”, but encouraged other industry leaders to take advantage of the HSE/IoD guidance, which, he said, was written “by business people for business people”.

The Institute of Directors’ head of parliamentary and regulation affairs, Alexander Ehmann, told SHP: “Forty per cent of larger businesses had awareness of the guidance, which is a good start. We want to go further [in terms of awareness] but we’ve done well on various indicators compared to very high-profile and well-funded national awareness campaigns.”

But he felt the unions could contribute more in terms of publicising the guidance. Added Ehmann: “The unions have not been as committed to disseminating the guidance as they could have been, and are not utilising themselves as a conduit for it.”

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