Making Companies Safe - what works? (CCA ... - Unite the Union

In contrast to this, two recent surveys indicate that reputational risk may be a driver for large
firms. A 1999 MORI survey of 102 of the most senior directors in Britain, drawn from a
representative sample of large companies, found that 79% of respondents cited health and
safety as having a great or fair amount of tangible impact upon corporate reputation. 26 And
Wright et al. report that amongst large organisations, concern about corporate responsibility
and ethical image was the second top ranked influence determining board level involvement
in health and safety management. 27
There is no clear explanation for these contradictory findings. Gunningham notes that much
of Wright’s evidence that concern for corporate credibility is one of the main drivers of
management commitment to OHS is drawn from studies of firms operating in high risk
sectors, such as chemical production and public transport. In such sectors, firms fear “that the
adverse publicity, loss of confidence and regulatory attention subsequent to a serious incident
will cause serious curtailment of operations, imposition of additional costs, loss of corporate
credibility and loss of business/interruption of operations.” 28 Gunningham argues that:
“Corporate image may be less influential in sectors which do not have such concerns.” 29
Thus, there appears to be some evidence that high profile firms in high risk sectors are most
likely to be ‘reputationally sensitive’. However, Wright has identified a range of circumstances
that will diminish concern for corporate image even amongst high risk, high profile
operators. These will be discussed further below. What is clear is that ‘reputational risk’ is
highly contingent and will not motivate all organisations in all sectors all of the time.
To what extent then, and under what circumstances, might regulators be able to persuade
employers that poor health and safety performance will damage their company’s reputation
and that this will pose a significant risk to their business? These questions will be explored
below.
How does OHS performance impact upon corporate reputation?
Research by Smallman and John suggests that the ‘poor OHS performance can lead to
competitive disadvantage through impairing a firm’s status in the eyes of one or more of
its stakeholders’, 30 but that good OHS performance does not generally enhance firm
reputation or lead to competitive advantage. Thus, it appears that OHS performance
generally only impacts on corporate reputation in a negative sense. This is consistent with
Wright’s interpretation of the data. Wright suggests that:
“the ultimate fear concerning adverse publicity and loss of public / customer
confidence is that business activities may be curtailed”. 31
A number of implications flow from this. First, these findings suggest that, at present,
concern for corporate reputation is unlikely to lead to improvements that go significantly
beyond what is required by law. Second, a number of conditions must exist before
reputational risk will begin to operate as a driver of OHS compliance:
• there must be a high chance that poor performance will be detected and broadcast;
• there must be an audience that will react to poor OHS performance,
• and finally there must be a significant chance that this audience reaction will result in
the curtailment or interruption of business activity or some financial loss.
The circumstances and extent to which these conditions may exist are explored further below.
Detection and Blame
In the UK the detection of poor OHS performance not involving major injury or loss of life is,
by and large, wholly dependent upon HSE inspections and investigations. Some individual
fatalities, major injuries and serious ‘near misses’ may be picked up and reported by the media
independently of HSE involvement, but many will not and reporting is likely to be restricted
to the local press. Multi-fatality disasters will generally be reported by the national media
independently of any HSE involvement.
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