The challenges of getting a Board on board about upfront compliance – Why is it so hard?

If prevention is better than cure, why is it so hard to get Boards to be proactive about compliance?

So, why don’t businesses want to get on board with compliance?  I’m sure there are more reasons but in my experience, it comes down to the perceived cost, the time and effort of compliance, a lack of knowledge about obligations and often, in the case of workplace health and safety, an attitude that people just shouldn’t be so precious or that because they haven’t had a problem in the past, they won’t have one in the future.

This brings to mind an experience I had where I was asked to address the Board of a relatively large hardware store about their workplace health and safety obligations.  This was the sort of company which had been family owned for generations and the Chair of the Board was the patriarch of the family and had worked in the business his entire working life.

Although I had been invited by the Company Secretary to come and speak to the Board, it was quickly apparent that the Chair was hostile to any suggestion that the company may not be meeting its workplace health and safety obligations.  It was also painfully obvious that my words were falling on deaf ears.  Somehow, I felt that my presence was merely to tick some compliance box or to appease the Company Secretary who, quite rightly, had recognised that the Company had some compliance issues in that area and had insisted that the Board take advice on this very important issue.

Although I went to great lengths to explain to the Board their workplace health and safety obligations and the risks and penalties associated with non-compliance, the Board’s attitude, and particularly that of the Chair was “Why should they do anything differently as they’d had no claims in the past?”  They simply couldn’t justify the cost or time required to put in place certain basic WH&S policies and procedures when there hadn’t been any need to worry about it to date.  It was evident that the fact that this company had not faced any major issues in terms of WH&S meant that they were unaware of the vast costs associated with prosecutions and claims arising from WH&S breaches.

So, how do you convince companies to spend money and time on upfront compliance when they’ve never had to deal with the costs associated with non-compliance?  You can always wheel out stats on average penalties imposed and make a reasonable estimate as to legal costs and the costs of downtime within the business to deal with the issue and compare that with the cost of being proactive in implementing policies and procedures to show that upfront compliance is considerably less expensive than responding to non-compliances.  However, in my experience this is often met with the attitude that “That won’t happen to us”.  My response to that is usually that “That’s what everyone thinks” but I find that that isn’t sufficient to change mindsets.  To this day, I’ve never been able to find a way to convince some people of the value of upfront compliance compared to the costs of responding to non-compliances but I guess some people just don’t get it until they experience it for themselves.  I can’t help those who won’t help themselves!  Perhaps you have some ideas you could share with me?

Of course, my experience with this particular company doesn’t mean that all or that even most companies have this kind of attitude.  There are many very diligent companies who work hard to do the right thing.  Thankfully, we are seeing more and more businesses who pro-actively seek out our advice to help them avoid non-compliances.  They do this not only because they want to comply with the law, but also because they want to do the right thing, particularly for their employees.  These are the businesses who are a joy to work with and who make my job all that much more satisfying.

At HR Business Direction we can assist with educating your board.  Contact us here.

Melissa Fitzpatrick LLB (Hons), BIntBus
Industrial and Employment Relations Specialist
melissa.fitzpatrick@hrbd.com.au
07 3890 2066
www.hrbd.com.au