Engaging directors: the numbers game

Duncan Spencer | Feature | HSW
10.11.2008

Some health and safety managers become frustrated because their management boards don't appear to understand the problems and challenges they face. Their pleas seem to fall on deaf ears. But the increasingly high standards of corporate governance expected by the public, HSE guidance on directors' duties and the publicity surrounding the Corporate Manslaughter and Corporate Homicide Act mean that most directors should realise the risks poor health and safety performance poses for them.

As recently as the spring, HSE chair Judith Hackitt was warning that a lack of evidence of boards of directors taking their health and safety responsibilities seriously meant the executive would not rule out pressing for a directors' duty in law.

So why don't we always get buy-in? Maybe it's the format and content of what we report that's the problem.

Most organisations, particularly medium or large enterprises, require incident statistics to be reported to the boards or mentioned in their company reports. (Incidents comprise both accidents - injury events - and near-misses - non-injury events, or ones that might easily have been worse.) These reports often single out the number of incidents notifiable under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR) per 100 full-time-equivalent employees.

Reporting incident statistics to company boards certainly isn't a formal legal requirement, though HSE guidance (specifically the Approved Code of Practice accompanying the Management of Health and Safety at Work Regulations) recommends it as part of the general performance monitoring process. The thrust of the guidance is that directors should be given sufficient information to enable them to understand the degree to which the organisation is exposed to risk.

Flawed concept?

So, faced with unresponsive executives, perhaps we should challenge the conventional view of the value of incident statistics in managing safety standards? Are there better ways to present information to boards to stimulate them to interest and action?

The theory first proposed by US insurance analyst HW Heinrich in 1950, and expanded by FE Bird in 1969, suggests that if you analyse total incident numbers, you discover a ratio of one major injury to 30 minor injuries to 300 no-injury incidents. (These numbers do vary by industrial sector, but the principle holds.) This led to the hypothesis that if you could reduce the number of non-injury or minor-injury incidents then you would make the chance of suffering a major-injury event more remote.

But former US secretary of state James Baker's report on the 2005 explosion at BP's Texas City oil refinery raised serious questions about this conventional wisdom. Non-injury events are rarely recorded and seldom investigated, regardless of organisations' blanket policies to report them. It's the large numbers of minor-injury events that become the focus of attention. If management action is directed to reducing the numbers of minor incidents, it diverts the eye of the organisation away from the potential catastrophic event.

The Baker report argued that this was one of the organisational failures that led to the catastrophe at Texas City; BP spent resources on reducing the likelihood of minor-injury events at the expense of maintaining adequate controls for the catastrophic one waiting in the wings.

There are other problems with focusing on incidents. For instance:

• just because an incident has happened, there is no guarantee it will again
• just because we haven't suffered an incident doesn't mean it won't happen in the future
• just because an incident has happened once doesn't necessarily mean that we have to go back to the drawing board and redesign all of our risk controls.

Organisations keep their incident statistics to show trends down the years in the hope that they demonstrate improvement. While this is a laudable hope, it has to be tempered by realism. In the retail world we are constantly evolving the way we do things to develop our business. Competency levels change, as does our store design, available space, equipment provision, procedure and operational circumstances. We are not the same organisation that we were 10 years ago, or even five years ago. So how far back we extend our view of general incident history must be limited (perhaps three years at most). The only exceptions to this rule are significant incidents, where people are killed or maimed.

What about near-misses? As we've said, most organisations impose a policy that requires all near-misses to be reported. But is that really achievable? How many hundreds do you have each day? If you can't report them all, how do you rationalise which of them should be reported?

Rid of RIDDOR

Setting goals for incident numbers can also be flawed. If the board sets a target of reducing the number of incidents or RIDDORs by 10% this year, are they suggesting they are comfortable with the other 90% happening? What if the trivial injury events were in the 10% and the major-injury events still in the 90%; what would we have really achieved? What if you reach your goal well within the year - can you then relax?

Surely our constant aim should be zero incidents, even though we know that this is highly unlikely in reality? In any case, the easiest way for managers to achieve incident-reduction targets is to forget to report; clearly that would be very unhelpful for any meaningful progress.

Why should executives focus on RIDDOR numbers anyway? This is legislation that enables the HSE to gather statistics so it can monitor the effectiveness of campaigns and validate its strategy for the coming year. It also provides enforcement authorities with the opportunity to investigate incidents and decide whether enforcement action should be made against the employer.

The flaws associated with RIDDOR reporting are as follows.

• Some organisations have a history of significantly over-reporting RIDDORs; others of significantly under-reporting them. Maverick employers do not report at all.
• The cut-off point of an injury causing the victim three days' absence from work can lead to anomalous reporting. Something that is normally not RIDDOR reportable (such as a bruised foot) becomes reportable if a person is away for three working days. It could have been little more than a convenient excuse for a couple of days off but the event now becomes part of our RIDDOR statistics. It's a common experience in many organisations.
• RIDDOR reporting categories can be difficult to interpret. Even safety practitioners are known to argue about whether a particular event is reportable or not. RIDDOR categories are certainly not fully understood by managers or administrative functions reporting incidents.

Often the board receives a headline figure of the number of RIDDORs reported in a month or year per 100 full-time-equivalent employees. What use is this figure? Say it was 1.23 last year and 1.12 this year, what does that mean? Similarly, the fact we have reduced the total number from 292 to 276 is meaningless if we still killed and maimed people.

Incident statistics hide the detail and the devil is in the detail. Providing a statistic without explanation of significant events and what was learnt from them is arguably a meaningless waste of time, making RIDDOR stats almost a red herring. The fact that they may invite enforcement interest serves to provide impetus to act, but does not dictate whether we should or not.

Near fatalities

At the John Lewis Partnership, our approach to accident statistics is based on a three-point hazard scale.

In a large organisation such as the partnership, this division of labour in incident investigation is a necessity; it ensures an appropriate response for each level of incident.

Level 1 incidents can never be eradicated; trend and pattern analysis by local management may suggest extra actions to reduce accident numbers, but this may be at the edge of what is reasonably practicable. Level 2 incidents may well have a litigation claim attached to them, so managers must ensure not only that they produce high-quality accident reports, but also that they examine root causes to identify and rectify systems failures. Level 3 incidents are at the extreme of seriousness. Investigation needs to be of the highest standard and needs specialist help. The board would be informed of the accident, the results of the investigation and any actions to mitigate future risk.

The most interesting contrast is the number of actual injuries compared with those that reasonably foreseeably could have resulted from the accident or near-miss. If a case of tin cans falls from a high warehouse shelf and lands in front of a passing employee, it's an obvious near-miss. If the employee was two steps further ahead and it struck them on the head it would be a potential fatality (level 3). But what if the employee was half a pace to one side and it hit them on the shoulder causing a heavy bruise? That's a level 2 injury, but we should capture it as though it were a level 3 incident and act accordingly.

Having reporting systems that pick up such occurrences shows that even in a relatively low-risk business like retail, we still have near-miss fatalities. Board members need to be appraised of this if they are to shed the blanket belief that all is rosy in the garden because most actual injuries reported are minor.

Model report

So how might a monthly board report on incident figures read, using the three-point scale to measure both accidents and near-misses?

"We had 16 minor and three moderate injury incidents last month. Of those, three could reasonably have resulted in fatalities. One of these was linked to a vehicle reversing into a yard. This further supports the case for acting on the recommendations elsewhere in this report for implementing new controls for reversing vehicles; the number one risk on our risk register.

"One other incident was an electric shock suffered when working with display cabinets in stores, which is also in the top six risks this year. This supports the training and redesign recommendations given for working with display cabinets.

"Implementing the recommendations for both of these risks will not only potentially reduce the total number of incidents but would also have the following business benefits...

"For the board's general information, only one of the four potential fatalities was RIDDOR reportable."

In a large multi-site, multi-functional organisation, restricting board reporting to actual and potential level 3s makes sense. Middle management should deal with the level 2s and below. In smaller organisations, where the board is closer to the coal face, it may make more sense to report level 2s and 3s, but the focus must always be on level 3s.

We cannot discuss incidents without pointing out that the true intent of health and safety law is to predict incidents and implement preventative measures. What should be of far more importance to organisations is the risk assessment, reporting and management system. An incident reporting and investigation system should only serve to assure directors that our identification and management of risk is effective.

Escalating problems

The challenge is getting the right information, presented in the right way, to the right decision-maker at the right time; and preferably in a way that enables the problem to be appropriately prioritised against any others. Depending on the nature of the problem and the resources necessary to solve it, problems are passed up the chain of management.

Our systems should filter out the everyday issues. The board only wants sight of those things that are outside the budget and operational authority of the managers they employ to manage the company systems.

We may decide to place complete incident numbers in an annex, but we must explain to directors what they mean and how they relate to our significant risk. What is clear is that merely listing and comparing incident or RIDDOR numbers from year to year does not provide a meaningful picture of how we are actually performing in our safety management or feed our safety management decision-making.

In the next article we will consider how safety practitioners can build better working relationships with senior management.