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Company
Annual Reports
What
the Government said in its June 2000 Strategy Statement
The consultation Process
Excerpt from HSC Minutes of meeting
of 28 Feb 2002
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Final
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HSC Paper on Company Reporting
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HSE Research
What the Government said in
June 2000
Action Point 2 of the Revitalising Health and Safety
Strategy Statement – published by the government
in June 2000 - stated that:
"The Health and Safety Commission will promote
publication of guidance, by March 2001, to allow large
businesses to report publicly to a common standard on
health and safety issues. The Government and the Health
and Safety Commission challenge the top 350 businesses
to report to these standards by the end of 2002, and
will then work to extend this to all businesses with
more than 250 employees by 2004."
| 42 |
An
analysis of health an safety coverage in the annual
reports of companies in the FTSE 100 was carried
out by the charity 'Disaster Action' in 1996.
This showed that roughly half of these reports
covered health and safety in some way, with wide
variation in the quality of reporting |
| 43 |
In
line with the approach adopted on environmental
reporting, were there are some excellent examples,
Ministers wish to seek to encourage more widespread
reporting on a voluntary basis in the first instance.
However, Ministers are minded to move to a compulsory
regime if good progress is not made against this
action point. |
| 44 |
It
is anticipated that the new guidance on annual
reporting will encourage companies to include
details of their health and safety policies, numbers
of reported incidents and details of any enforcement
action. Ministers attach particular importance
to details of prosecutions , fines and statutory
notices being made public. Many of the unions
responding to our consultation argued for auditable
standards for reporting the costs of health and
safety failures and the benefits of health and
safety failures and the benefits of health and
safety interventions. The feasibility of this
proposal will be considered in working up guidance. |
| 45 |
The
Royal society for the Prevention of Accident is
taking forward a new initiative called Director
Action on Safety and Health (DASH). One aspect
of this work is to be a consultation on encouraging
best practice in measurement and reporting (both
internally and externally) of health and safety
performance and plans. |
| 46 |
The
Company Law Review, which includes within its
remit an examination of the legal framework for
company accounting, reporting and disclosure,
may also make proposals relevent to company reporting
on health and safety. The Review, which was launched
by the Department of Trade and Industry in 1998,
is overseen by a steering group of independent
experts. It is due to make its final report in
Spring 2001 |
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Consultation Process
In December 2000, the HSE drafted a document setting
out voluntary guidance to companies. This was not open
to a general consultatoin process - and the CCA only
obtained it only by accident.
To
see the original HSE draft,
Click here
To
see the CCA response, Click
here
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Excerpt from HSC Minutes of
meeting of 28 Feb 2002
Draft
HSC Guidance: Health and Safety in Annual Reports:
HSC/01/50
| 8.1 |
David
Morris introduced the paper. Since the paper,
there had been some additional input from interested
parties. This included the view of the Centre
of Corporate Accountability (CCA) that the requirement
to provide health and safety information in a
company's report should be put on a statutory
basis. The Institute of Directors (IOD) had identified
difficulties in providing data on occupational
ill health. To take account of this concern, it
was proposed that reports should include, as a
minimum, an account of what the company was doing
to collect this information. |
| 8.2 |
The
following points were made in discussion:
| i |
the
guidance was originally intended for the
top 350 companies as set out in "Revitalising"
and the public sector but might usefully
be extended to smaller companies later;
|
| ii |
the
guidance represented a minimum requirement
for inclusion in annual reports. It did
not preclude the inclusion of more extensive
information about positive indicators of
health and safety such as benefits the company
derived from investment in health and safety
training. More examples on this type of
information could be included in the guidance; |
| iii |
the extent to which including health and
safety in annual reports improved performance
was open to debate but there was anecdotal
evidence that it focused the minds of directors.
Stakeholder impact might be greater by including
data on the financial costs of health and
safety and measuring this against the business
performance and targeting the corporate
risk agenda; |
| iv |
reference
to ROSPA might be better be placed as a
footnote; |
| v |
the
guidance should also be directed at the
public sector |
| vi |
the
revitalising context and the reasons for
issuing the guidance, including the importance
of reporting to common standards, - should
be better emphasised in the letter and the
guidance; and |
| vii |
some of the ‘top 350’ companies
may already be including this type of information
in their reports. The letter to the top
350 companies should be redrafted to reflect
this. |
|
| 8.3 |
The
Commission agreed that the letter and guidance
should be amended in the light of discussions
and put out as a challenge to the ‘top 350’
companies before the end of March. The letter
should go from the Chair and either the Minister
or the DG. |
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Final
HSC Document
To see the final HSC Document Click
Here
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Paper
to HSC meeting on Company Annual Reports
In April 2002, the HSC received a paper on "Corporate
respsonsibility and accountability for health and
safety - progress report on key initiatives"
which contained the following information:
Challenge’
to top companies on annual reporting
| 7 |
The
Commission received a report at its 20 November
2001 meeting (see HSC/01/155) on the progress
of the health and safety reporting ‘challenge’
by Government and the HSC to top UK companies
- Action point 20 of “Revitalising Health
and Safety” (RHS). Since then arrangements
have been put in place to take forward actions
agreed at that meeting including the submission
of a progress report to Ministers, the publication
of the results of the ‘challenge’ and
associated research
to coincide with the publicity launch for the
RHS stakeholders conference and planned meetings
on reporting with some 80 Chairmen and Chief Executives
of top companies in 2002. The Minister has indicated
his keenness to attend some of the planned meetings. |
| 8 |
To
date the Chair, Director General and Deputy Director
General have met with Chairmen, Chief Executives
and other senior managers of 20 of the top companies
challenged. The purpose of the meetings are to
secure the commitment of top companies to reporting
on health and safety in line with the HSC guidance
and to promote greater board and director responsibility
for health and safety. Although most of the companies
have given that commitment and have boards that
provide direction and leadership on health and
safety some remain to be persuaded that public
reporting will bring business and social benefits. |
| 9 |
The
programme of visits planned for 2002 are in the
main with companies which have not formerly responded
to the ‘challenge’ and in many cases
do not report publicly on health and safety. Further
research is planned for 2002 to establish to7
what extent reporting practice has changed in
the light of the ‘challenge’. |
To
download the whole paper - which also deals with (a)
director duties and (b) safety and institutional investment
- click here
(PDF)
Research
The HSE commissioned consultants to undertake "A
study of the Provision of health and safety information
in the annual reports of the top UK companies"
The Executive Summary is set out below.
To download the whole report, Click
Here (PDF)
"This
report details the findings of a study of the provision
of health and safety information in the annual reports
of the UK’s top companies (in terms of turnover).
The study was undertaken to assist the Health and
Safety Commission (HSC) with their current Strategy
Statement to promote the reporting of health and safety
information in company annual reports.
The main aims of the study were:
| • |
To
determine the current level of reporting of health
and safety issues in
annual reports of the top UK companies. |
| • |
To
determine the quality of health and safety information
reported. |
| • |
To
compare current levels of reporting with those
in 1995. |
Of
the top 350 UK companie s contacted, 282 were identified
as producing an annual report; 227 of which were received
and examined. Less than half (107 reports) contained
health and safety related information.
The quality of reporting in these 107 reports varied
greatly. Whilst many companies reported high quality
information and dedicated an entire section of their
annual report to the issue of health and safety (describing
principles, performance and targets information),
other companies only briefly mentioned health and
safety, often in the form of a low quality statement
indicating that the company met the requirements of
the Health and Safety at Work Act 1974.
Based on our comparison there has been a slight increase
since 1995 in the number of companies reporting health
and safety information in their annual report. In
1995, 47% of (FTSE 100) companies reported on health
and safety in their annual report (based on the findings
of a study conducted by Disaster Action). This can
be compared with the 60% of companies who currently
report health and safety issues (based on year-2001
FTSE 100 companies who are also UK top 350 constituents).
To ensure the success of the HSC’s Strategy Statement,
there are several issues that have arisen from our
study which require further investigation. These are:
| • |
Determining
why some companies report on health and safety
information in their annual report and other companies
do no |
| • |
Establishing
if there is a relationship between health and
safety reporting and health and safety performance." |
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