Guest Editorial from the Millennium Edition of Croner’s Health and Safety Manager
Down these mean streets a man must go who is not himself mean; who is neither tarnished nor afraid. – Raymond Chandler.
Health and safety managers are facing an important turning point in their profession which has come, aptly enough, at the dawning of a new millennium. Decisions need to be made by those brave enough to face them. The very justification for health and safety management is at stake.
To put the whole dilemma in a nutshell, risk management has moved the profession away from the traditional emphasis upon the humanitarian justification for managing health and safety towards an economic justification.. But; this is like the Emperor’s new clothes, what happens when he is caught naked at an important business seminar? The whole concept of there being an economic justification for health and safety management has an inherent contradiction to overcome. How can it be argued, on the one-hand, that health and safety measures are an investment which will repay themselves through reduction in business losses, and, on the other hand, that the harmonisation of health and safety standards was required in all European Member States in order to create a level playing field by preventing organisations in some countries from gaining an unfair advantage through operating with lower health and safety standards?
The traditional "holy trinity" of reasons for health and safety management was legal, humanitarian and economic. Looked at closely, legal reasons are based upon the concept of a duty of care which derives from the moral duties we each hold to ourselves and others. In the traditional viewpoint, economic justifications were merely a by-product of this moral duty.
The modern view has reversed this pyramid. Economics has become the base, with legal duties a grudgingly accepted necessity (or removed completely in a de-regulated system!). Humanitarian justifications being seldom resorted to if at all. Such an approach will inevitable turn the health and safety manager into an offshoot of the insurance industry. We already have "risk managers" who have to pay for their own salaries by the savings they make to their employers through reductions in losses. Such an approach may not be inherently bad, but it quickly becomes coupled with the concept of risk transfer. In other words, instead of attempting to reduce the risks involved the risk of losses are transferred to the insurance company.
This may make sound economic sense, but it represents a turning away from the acceptance of moral responsibility. Samuel Colt refused to have fire insurance in his premises, for example, on the grounds that he owed a moral duty towards the people he employed and that every dollar spent on insurance would be a dollar less spent on health and safety measures.
Most people would think that this would be taking matters too far and that insurance cover can be justified on sound prudential grounds, it does at least ensure a pool of money against which injured parties can claim. The danger is that risk transfer becomes perceived as an equal to risk reduction and risk control in the mind of senior management. One of a mix-and-match of options available in order to manage the losses faced by the organisation. Traditional health and safety managers quickly become seen as a thorn-in-the-side of management when they point out the errors of holding such a rosy view of the world. After all, the organisation may be able to transfer financial losses to the insurance company, but the injured employee will not be able to transfer the personal injury or ill-health suffered to the insurance company.
Much of modern management theory starts with the fundamentally mistaken notion that organisations exist. They do not, they are merely abstract legal entities (constructs of our minds if you like). An organisation cannot feel pain, experience hope or enjoy a beautiful sunset at the close of day. Only the people who comprise an organisation can experience such things, that is why we owe each other a moral duty that we do not owe to the organisation. It is this moral duty that forms the bedrock of health and safety management.
Take a recent example, the Institute of Risk Management’s recent annual conference emphasised the need to merge the management of all business risks, including health and safety, the environment, insurance and financial risks, into a single function. Such an approach needs not only to prevent loss and to appease insurers, but also to create shareholder value and to ensure certainty of performance.
Suddenly the language of risk changes, Howard Martin of Ernst and Young told the conference that "risk management is too important to be left to the risk manager, and should be pursued at director level". Citing the health scare concerning Coca Cola in Belgium he suggested that an integrated risk strategy could have prevented damage to the company’s image.
Here we hit a snag, the meaning of the term "risk" is different in management terms, insurance terms and health and safety terms. Therefore, it is only at the surface level that such a cosy integration appears possible. When faced with a concrete issue, it is quickly discovered that those involved are talking about very different things. The management specialist about the risks to image, the insurer about the risks to the pool of money available to settle claims and the health and safety manager about the risks to people’s health. Only the health and safety manager is directly governed by humanitarian considerations. To blur the edges and to make economics the primary justification for health and safety management reduces the health and safety manager to a risk manager in either management or insurance terms.
We cannot have things both ways. We either accept that health and safety managers are merely an offshoot of the insurance industry or we stand firm and argue the humanitarian reason for health and safety management. The current approach of using the economic argument to persuade reluctant managers to adopt health and safety measures is fraught with dangers. Either the approach fails and we are left with no solid ground to operate from, or the approach succeeds and the manager’s perception, that the only valid reason for managing health and safety is economic, is reinforced. Health and safety managers are either economists or redundant!
The key issue here is that health and safety losses are not the same as other business losses because they involve pain and suffering to human beings, and only human beings can experience such suffering. Hence the humanitarian argument only applies directly to health and safety management and not directly to other branches of management. (Although it may apply indirectly, as if the organisation closes due to poor management then pain and suffering will be experienced by those who comprise the organisation). Health and safety managers forget this key point at their peril. And what better time to remember it than at the turning of the year, the century and the millennium.
However; according to Maureen Gibbins , the Chief Executive of the Institute of Risk Management as quoted in the November 1999 issue of Health and Safety at Work, "whether or not risk management ends up as a more centralised business function, the risk assessment and the planning skills of the health and safety manager are likely to be in greater demand than ever in maintaining profit continuity". Whether "profit continuity" should be the primary consideration of the health and safety manager is itself a matter of conjecture, depending upon whether economics or humanitarian considerations form the base of the pyramid of reasons for managing health and safety, as is what is meant by "risk" in a risk assessment. Remember, in management terminology risk is not necessarily something to be avoided or reduced. In fact some organisations are criticised for having cultures which are too risk avoidant and fail to develop risk-taking skills in managers. Here risk means the chances of making a profit or loss, and we all know from the school of gambling that the greater the risk the greater the potential rewards should the risk come off. The use of umbrella terms such as "risk" may lead to the false belief that managers, insurers and health and safety managers are talking about the same thing when, in fact, they are not.
Have a happy, safe and healthy millennium ……………………