Business owners and Directors: Questions to ask yourself

Business owners, company directors and CEOs have mandatory legal requirements to ensure that the business they manage is meeting its primary obligations under Workplace Health and Safety (WHS) laws.

Every organisation's primary obligations include providing the WHS management system, managing risks and hazards, and consulting with workers on WHS matters before making decisions.

In Work Health and Safety law, an organisation, business, company or body corporate that employs staff is called a "Person Conducting a Business or Undertaking (PCBU.)

"Officers of the PCBU" are the human beings that are responsible for real-world compliance. They are the directors and CEOs of the company. Theirs is an assurance role.

The actions required of officers to ensure the business is in compliance with WHS requirements are collectively called "due diligence." (This is a slightly different use of the term otherwise used in business and finance.) These WHS “due diligence” obligations apply to all officers across all PCBUs, large and small, with both flat and hierarchical structures. 

To help the officers of the PCBU carry out relevant actions that would demonstrate this, the WHS Act 2011 lists 6 broad actions that Officers must be actively involved in. Including examples, the list becomes 11 routine actions that an officer is expected to take. These actions are stated in Section 27(5) of the Act.

As directors of the business, officers must consider every one of these points in their ongoing operation of the organisation’s WHS management system. An officer may be personally liable for a breach of any of the actions expected of them in Section 27 of the WHS Act. To help with these an officer may need to routinely or periodically ask themselves questions such as:

1.      How do I review the business’ health and safety systems and ensure that they adequately address health and safety risks – on an ongoing basis?

2.      How am I demonstrating active engagement in my due diligence obligations, beyond “oversight”? (Am I a “hands on” CEO?)

3.      Am I relying on the “best” expertise and advice in relation to health and safety matters in my industry? 

4.      Are the actions of my managers and supervisors proof that I am fully accountable for my duties and responsibilities as an officer of the PCBU?

5.      Can I provide hard evidence that I am actively involved in the 11 actions an officer must take as stated in Section 27(5) of the WHS Act?

The duty to exercise due diligence in this way is not met through “governance or directorial oversight functions” alone – it requires more. The officer must personally acquire and maintain sufficient knowledge to be reasonably satisfied that the PCBU is complying with its duties under the WHS Act.

Here is a court case where a hands-on director who prioritised and actively kept on top of health and safety was not prosecuted for a serious workplace incident, despite being investigated for failures in due diligence. in this case, only the business (PCBU) itself was charged:

In SafeWork NSW v Miller Logistics Pty Ltd; SafeWork NSW v Mitchell Doble [2024] NSWDC 58 (Doble) where a worker was killed in a forklift accident, the NSW District Court held that although there had been a failure by the PCBU (the business), the director of the company had not failed to exercise due diligence. In particular, the NSW District Court held that the “...duty on an officer to exercise due diligence does not mean that the officer must do everything that the PCBU must do to ensure compliance with its own duty and that a failure by the PCBU does not, of itself, demonstrate a failure by an officer to exercise due diligence.”

Perhaps these 5 questions can help you demonstrate and validate your good intent and commitment to your WHS duties as a director or CEO?

We recommend all business owners, company directors and CEOs, if not done already, partake in a short training session on WHS Law that clearly covers their WHS duties as officers of a business. This is a main service of Courtenell and the training program is only a few hours.

For more information, please feel free to contact us at train@courtenell.com.au or phone us on 02 9552 2066.