Summary of Abbreviations AASB Australian Accounting Standards Board AIRC Australian Industrial Relations Commission ASCC Australian Safety and Compensation Council ASIC Australian Securi
INTRODUCTION
Justification for the research
The growing interest in corporate social issues has prompted increased academic scrutiny of corporate disclosures related to intellectual capital, human resources, minority interests, gender equality, ethical investment, corporate philanthropy, and corruption This trend is supported by various studies, including those by Abeysekera (2003), Adams et al (1995), and Guthrie et al (2004), highlighting the importance of transparency in these areas.
Despite significant academic focus on various social issues, corporate reporting on Occupational Health and Safety (OHS) performance remains under-examined This lack of scrutiny is notable given the longstanding recognition of OHS information in annual reports, as highlighted by studies from Andrew et al (1989), Deegan et al (2000), Gray et al (1995b), and Guthrie and Parker (1989).
7 These supplementary, stand-alone reports have various titles including Triple-Bottom-Line Reports;
OHS disclosure is crucial for fulfilling employers' legal obligations to provide a safe and healthy work environment, thereby reducing the impact of workplace injuries and illnesses on both employees and the organization This practice helps mitigate the significant external costs associated with poor OHS performance that affect various stakeholders However, there is an ongoing debate in the OHS literature regarding the best methods for managing and assessing OHS performance, focusing on the philosophical understanding of OHS risk and the reliability of evaluation metrics In this context, organizations must ensure that their managers are ethically accountable to stakeholders for their OHS strategies and outcomes.
Current knowledge about the quality of Occupational Health and Safety (OHS) information voluntarily shared by organizations with stakeholders is limited, particularly regarding the relevance, reliability, comparability, and completeness of these disclosures This study aims to fill this research gap by examining corporate OHS disclosures alongside stakeholder demand, identifying the OHS information that stakeholders value most The findings will provide valuable insights for report preparers in creating effective OHS disclosures and assist in evaluating the quality of publicly available OHS information Additionally, the results of a gap analysis between stakeholder expectations and corporate OHS disclosure supply will have significant implications for reporters, legislators, policy-makers, and researchers.
Research objectives
Despite the longstanding recognition of OHS information in annual reports, there has been limited academic focus on analyzing these disclosures in depth This is unexpected, considering the management literature highlights a persistent challenge in finding effective OHS management strategies and an ongoing discussion regarding the value of outcome metrics like the 'lost time injury' (LTI) rate Specifically, the effectiveness of OHS metrics in delivering a meaningful evaluation of OHS performance remains a critical concern.
This study presents eight definitions of key characteristics of Occupational Health and Safety (OHS) information quality, including relevance, reliability, completeness, and consistency, as outlined in Section 1.3 It critically examines the evaluation and control of OHS performance, contributing to the literature on sustainability reporting and accountability By exploring the construction of corporate accounts related to OHS performance, this research highlights the importance of the quality of information provided.
This research aims to evaluate the adequacy of corporate Occupational Health and Safety (OHS) disclosures in meeting stakeholder information needs, focusing on the qualitative characteristics of relevance, reliability, comparability, and completeness Chapter 2 begins with a literature review to identify key issues in OHS performance management and assessment that influence publicly available OHS disclosures The study is structured around three specific objectives, each representing a distinct phase of the research.
This study investigates stakeholder perceptions of corporate Occupational Health and Safety (OHS) accountability and their demand for OHS information It aims to identify key OHS disclosures that stakeholders consider essential for an organization to fulfill its OHS accountability The findings will subsequently be analyzed to assess how well stakeholder demands are being met.
This article aims to assess the quality of publicly shared accounts of Occupational Health and Safety (OHS) management and performance from high-risk firms over the past decade Utilizing institutional theory, the research seeks to identify the presence of standardized accountability templates for disclosure across organizations and over time, while also examining the impact of the Global Reporting Initiative on these practices.
Reporting Initiative (GRI) has influenced the quality of OHS disclosures over time
This article aims to align stakeholder demand with corporate supply of Occupational Health and Safety (OHS) information By analyzing the findings from initial phases, it assesses whether corporate disclosures meet, exceed, or fall short of stakeholder expectations for accountability in OHS The study utilizes insights from a stakeholder survey to create the Occupational Safety and Health Accountability Index (OSHAI), which rates the quality of OHS disclosures.
Issues for research
This research contributes to the expanding field of sustainability reporting and accountability by exploring the often-overlooked area of corporate Occupational Health and Safety (OHS) reporting It is based on the understanding that organizations have a responsibility to their stakeholders, both internal and external, regarding the intended and unintended consequences of their activities.
Occupational injuries and illnesses remain a significant concern for workers globally, as highlighted by various studies (ABS 2001, 2002; Al-Tuwaijri 2008; ASCC 2008a; NOHSC 2005) This issue persists despite a strong inverse correlation between managerial efforts in occupational health and safety (OHS) and the occurrence and severity of workplace incidents (Chelius 1991; Ginter 1979) Consequently, employees and contractors are crucial stakeholders in addressing these challenges (Corocan 2003).
Stakeholder groups, including those affected by occupational health and safety (OHS) incidents, have intrinsic rights to safe working conditions (Deegan 2006b, p 296) The costs associated with OHS incidents are often externalized, impacting various stakeholders (Chelius 1991; NOHSC 2004a) Consequently, prior research indicates that many stakeholders view corporate OHS disclosures as significant (Deegan and Rankin 1997; Deegan and Rankin 1999; Epstein 2008).
This research focuses on Occupational Health and Safety (OHS) in the resource sector, a critical industry for the Australian economy The choice of this sector is supported by the high investor demand for resource shares, significant health and safety risks associated with operations, and the historically elevated rates of fatalities and serious injuries among workers.
2008) Further justification for this choice of industry sector is provided in Chapter 2
This thesis focuses on the quality of corporate Occupational Health and Safety (OHS) disclosures and their ability to satisfy stakeholder demands for accountability This accountability is rooted in the employer's duty of care towards employees and supported by research on the effectiveness of organizational policies and practices.
Chapter 2 discusses the identified stakeholder groups and their associated externalities that impact the rate of workplace injuries and illnesses, as highlighted by Ginter (1979) This study focuses on relevant definitions pertaining to these factors.
Quality refers to the degree to which information demonstrates the qualitative traits of relevance, reliability, consistency, and completeness While this thesis primarily discusses non-financial information, the characteristics of financial reporting information outlined in AASB ED164 remain applicable.
Relevance refers to the degree to which information influences decision-making through its predictive or confirmatory value In this context, relevant information is essential for stakeholders, as it aids them in making informed decisions.
Reliability refers to the degree to which a phenomenon is represented accurately and impartially, ensuring that it is devoid of errors and biases.
Consistency refers to the replicability of performance measures, particularly in the calculation and presentation of Occupational Health and Safety (OHS) performance metrics This consistency is crucial for enabling meaningful comparisons between different sets of data, such as analyzing results over time or across various firms.
Completeness: The provision, without omission, of all relevant information necessary for the faithful representation of that event or phenomenon the disclosure purports to represent
The thesis investigates the rationale behind corporate accountability for occupational health and safety (OHS) and analyzes the methods employers use to manage OHS outcomes It contextualizes the literature on OHS reporting by identifying the activities and results for which companies can be held accountable to stakeholders Additionally, the thesis reviews the various factors that shape the format and content of corporate OHS reports, with a particular focus on the emergence of the Global Reporting Initiative (GRI) and its guidelines for corporate sustainability reporting.
This study employs a mixed method approach to develop a survey aimed at understanding stakeholder perceptions of Occupational Health and Safety (OHS) accountability, focusing on concerns from various groups including employees, OHS professionals, managers, unions, regulators, academics, shareholders, and small business owners A disclosure index is utilized to evaluate and compare the extent of disclosures in corporate annual and sustainability reports from 1997 to 2007, as outlined by Guthrie and Abeysekera (2006) The findings are analyzed through the lens of neo-institutional theory to reveal disclosure patterns over time and to identify external factors, such as the introduction of the Global Reporting Initiative (GRI), that may influence changes in OHS reporting practices.
This study conducts a comparison between survey results and content analysis to assess how well Occupational Health and Safety (OHS) disclosures fulfill stakeholder information needs By triangulating user perceptions with recommended disclosures from the literature and those found in sampled corporate reports, significant gaps in OHS reporting are identified These gaps raise concerns regarding the effectiveness of the sampled disclosures in ensuring accountability for OHS to stakeholders.
Contribution to knowledge
Sustainability reporting has gained significant attention in the last 30 years, yet organizations have historically included 'health and safety' information in their corporate annual reports This practice can be traced back to various studies and reports from notable authors such as Andrew et al (1989), Deegan et al (2000), Gray et al (1995b), Guthrie and Parker (1989), and Kolk (2003).
Despite the prevalence of Occupational Health and Safety (OHS) disclosures, there have been few efforts to analyze their content or evaluate the quality of the specific OHS metrics used for managing, assessing, and communicating accountability for OHS performance.
The management control literature has seen ongoing debate for over a decade regarding the validity, reliability, and timeliness of 'lost time' indicators used to assess Occupational Health and Safety (OHS) performance Critics argue that reliance on these metrics has led to growing dissatisfaction among stakeholders Despite this, there is a lack of empirical evidence on the prevalence of these indicators or alternative performance measures in the public reporting of OHS outcomes to stakeholders.
This study makes three significant contributions to the existing literature by combining content analysis and surveys Firstly, it offers valuable insights into how public accounts of Occupational Health and Safety (OHS) performance are constructed, providing a thorough description and critique of the current OHS disclosures from large Australian resource companies.
From an accounting perspective, the discussion on safety management emphasizes the importance of performance indicators, particularly the lost time injury frequency rate (LTIFR), in ensuring public accountability for occupational health and safety (OHS) performance.
The analysis of corporate Occupational Health and Safety (OHS) disclosures within their broader institutional context reveals significant insights into the accountability frameworks and reporting practices that have become widely accepted in the industry Additionally, the findings highlight the impact of the Global Reporting Initiative (GRI) sustainability reporting guidelines on the quality of corporate OHS disclosures over the past ten years, indicating both their influence and limitations.
The findings highlight stakeholder expectations for corporate accountability regarding occupational health and safety (OHS) in resource firms By analyzing stakeholder demand for OHS information alongside the reporting practices of major mining and energy companies, the study reveals the effectiveness of OHS disclosures in providing accurate accounts of OHS performance To enhance the quality of OHS accountability disclosures, several recommendations are proposed.
Structure of the thesis
This thesis consists of eight chapters, beginning with an introduction Chapter 2 summarizes literature on OHS accountability and explores issues in OHS performance management, evaluation, and reporting Chapter 3 reviews literature on stakeholder, legitimacy, and institutional theories, establishing the theoretical framework for the research and formulating several research propositions The research methodology is discussed and justified in Chapter 4.
Chapters 5 and 6 of the study detail the findings from a stakeholder survey and a content analysis of OHS disclosure, respectively Chapter 5 highlights stakeholder demand for OHS information, while Chapter 6 critiques the corporate supply of such data In Chapter 7, the results from these chapters are compared, revealing various reporting gaps Chapter 8 concludes the project by summarizing key insights, discussing implications for research and practice, and providing recommendations for policymakers, standard setters, professional bodies, the GRI technical committee, and corporate reporters This chapter also addresses study limitations, suggests avenues for future research, and presents the overall research conclusion.
LITERATURE REVIEW
Corporate accountability for OHS
The evolution of globalization, technology, and management techniques has led to workplace restructuring, resulting in downsizing, longer work hours, and increased workload and pace While these changes aim to enhance competitiveness and productivity, they have also been linked to serious health and safety issues, including repetitive strain injuries, stress, workplace violence, and other work-related illnesses and fatalities.
The majority of occupational injuries and illnesses are fundamentally preventable, as highlighted by significant advancements in the behavioral and social sciences that have improved our understanding of occupational health and safety (OHS) cause-effect relationships Research has generated an unprecedented volume of knowledge regarding risk management, particularly in public and workplace settings Over the past 30 years, studies have consistently shown a strong inverse relationship between employers' preventative OHS control measures and the frequency and severity of workplace injuries and illnesses.
Occupational injuries and illnesses are inherently predictable and preventable, which underscores the need for organizations to take responsibility for ensuring workplace health and safety Consequently, they should be held accountable for occupational health and safety (OHS) outcomes.
This section provides a comprehensive overview of Occupational Health and Safety (OHS) accountability, starting with essential concepts and definitions of key terms such as work-related incidents, injuries, and illnesses It situates OHS within ethical and regulatory frameworks, identifying various stakeholders impacted by workplace injuries and illnesses The section concludes by emphasizing the importance of corporate accountability to stakeholders in managing OHS and preventing workplace fatalities, injuries, and illnesses.
Occupational health and safety focuses on preventing work-related injuries and illnesses, emphasizing the maintenance and improvement of workers' health and safety in the workplace Health is defined as a state of well-being in both mind and body, while safety refers to the freedom from hazards An ideal work environment minimizes risks associated with potential health and safety issues, distinguishing it from a workplace that has not yet encountered injuries or illnesses due to various factors, including luck.
Workplace injuries and illnesses represent a significant health risk in Australian society, as highlighted by Johnstone (2003b) These unplanned incidents can result in physical harm to various individuals within the work environment, including employees, suppliers, contractors, visitors, and bystanders.
Injuries in the workplace can stem from various incidents such as falls, slips, trips, fires, electrical shocks, lifting accidents, equipment failures, spills, journey mishaps, or poor task organization These incidents can lead to serious outcomes, including temporary or permanent disabilities, and in severe cases, even death.
Work-related illnesses are occupational diseases caused by factors such as excessive heat, noise, dust, inappropriate lighting, and exposure to harmful chemicals or psychosocial stressors like bullying and workplace violence These conditions can lead to temporary, permanent, or even fatal health outcomes.
2.1.2 Ethical duty of care – OHS as a human right
Kofi Annan, former Secretary of the United Nations, emphasized the ethical responsibility of employers to prevent workplace injuries and illnesses, highlighting the importance of ensuring a safe and healthy work environment.
Poor working conditions and insufficient safety measures frequently lead to unnecessary tragedies It is essential for everyone to support the International Labour Organization in advocating for workplace safety and health Promoting these standards is not only a wise economic strategy but also a fundamental human right.
The right of employees to return home safely and in good health after work is acknowledged both in Australia and globally This principle is enshrined in the Universal Declaration of Human Rights, which was adopted by the United Nations General Assembly on December 10, 1948.
Critics advocate for the use of the term 'incident' instead of 'accident,' as the latter suggests unpredictability and a lack of causality (Hopkins 2005b; McDonald 1994, 2006) This perspective aligns with the understanding of a contract between governments and their citizens, as highlighted by the United Nations (2008a, p 1), which acknowledges various human rights.
Everyone has the right to life, liberty and security of person (Article 3)
Everyone has the right to work, to free choice of employment, to just and favourable conditions of work and to protection against unemployment
The "right to life" outlined in Article 3 is crucial to Occupational Health and Safety (OHS), especially considering the 2.2 million annual work-related fatalities (Somavia 2005) The United Nations emphasizes the importance of the "right to safe and healthy working conditions" as an essential element of "decent work" and "just and favorable conditions of work," as stated in Article 7 of the International Covenant on Economic, Social and Cultural Rights (United Nations 2009).
The UN’s Global Compact, a voluntary network embraced by many Australian companies, recognizes occupational health and safety (OHS) as a fundamental human right Specifically, the guidelines for Principle 1 emphasize that businesses should support and respect internationally proclaimed human rights, highlighting the provision of safe and healthy working conditions as a top priority for companies to ensure human rights are upheld.
The International Labour Organization (ILO) acknowledges the fundamental right to life, which encompasses the right to health and safety Over its 80-year history, the ILO has issued numerous conventions and protocols to strengthen these rights Governments are urged to prioritize the ratification of various conventions focused on workplace safety and health.
Constructing corporate accounts of OHS
Accountability in corporate governance, as defined by Gray et al (1996), requires those in charge to report their decisions and actions to stakeholders This principle extends to Occupational Health and Safety (OHS), where governance parties must account for their choices regarding OHS inputs, activities, and outcomes This section examines how to construct corporate accounts of OHS, focusing on various approaches to conceptualizing and evaluating OHS strategies and practices, as discussed by Johnstone (2003a).
“conceptions of culpability, reflecting dominant and individualistic ideologies of OHS” (p208) These ideologies have implications not only for OHS risk management but also for the evaluation of OHS performance outcomes
This section reviews the literature on safety, management, and accounting to critique the financial and non-financial metrics used to assess Occupational Health and Safety (OHS) outcomes Understanding the ideological stance driving OHS strategy is crucial before selecting metrics for evaluating OHS inputs and processes This ideological perspective significantly influences the design, evaluation, and communication of OHS policies and performance Therefore, Section 2.2 provides an overview of the primary OHS ideologies and explores their impact on shaping OHS strategy, as well as the metrics and narratives used in corporate accounts of OHS interventions and performance.
2.2.1 Accounting for corporate OHS performance
To effectively meet the decision-making requirements of managers and the accountability expectations of external stakeholders, organizations must reliably assess and communicate their Occupational Health and Safety (OHS) performance This necessitates the ability to measure clear indicators that accurately represent OHS inputs, activities, and outcomes.
Measurement, as defined by Campbell (1938), involves assigning numerals to represent properties of material systems, but the challenge lies in quantifying workplace 'health' and 'safety' since these are constructs rather than directly observable properties While social outcomes like death, injury, and illness can indicate a complex understanding of health and safety, they do not accurately encapsulate the full concept (Van Peursem et al 1995).
Consequently, measures of OHS are described as “genuinely difficult to construct and manage” (Bottomley 2000, p1)
Surrogate measures of workers' compensation insurance premiums and workplace incident rates are often criticized for their lack of accuracy in reflecting true workplace safety Employers seek more effective strategies to mitigate increasing occupational health and safety (OHS) costs, while workers are advocating for improved measures to minimize their exposure to health and safety hazards.
The continuous search for valid, relevant, comparable, and reliable proxies to assess and communicate health and safety performance to stakeholders is clear This section reviews and critiques the financial measures and non-financial indicators suggested in the literature as proxies for workplace health and safety.
2.2.1.1 Financial measures of OHS performance
The pursuit of high-quality financial measures for Occupational Health and Safety (OHS) performance poses significant challenges for accountants Many firms' accounting information systems are inadequate for effectively capturing and presenting OHS-related cost data, leading to uncertainty regarding the recognition of OHS expenses Consequently, OHS managers often find their efforts to navigate these accounting systems futile, as there is a considerable delay between OHS incidents and their financial repercussions, rendering financial data less useful for timely analysis and decision-making However, certain OHS costs, like workers' compensation insurance premiums, can be easily tracked within financial accounting systems and reported in management summaries.
Workers' compensation insurance premiums and direct compensation payments to injured employees are key financial indicators of occupational health and safety (OHS) performance for firms that are licensed to self-insure.
In the 2005/06 financial year, Australian employers collectively paid an estimated $8 billion in workers' compensation premiums, highlighting the significant financial impact of workplace safety (Ackers et al 1992; ASCC 2009) The inclusion of compensation costs in management accounting reports is believed to have a substantial "safety effect," as it incentivizes managers to enhance safety measures and reinforces positive outcomes when these improvements lead to cost reductions (Chelius 1991, p24; Reber et al 1993).
Compensation costs, while potentially useful, do not serve as a valid or reliable indicator of current Occupational Health and Safety (OHS) performance for several reasons Firstly, accountants often struggle to allocate these costs meaningfully across departments or business units, leading to arbitrary allocations or the use of inappropriate cost drivers Secondly, there is an inconsistent relationship between a firm's insurance premium costs and its actual health and safety performance.
Workers' compensation premiums, especially for small employers, often do not take into account their previous claims history, leading to a lack of accurate cost assessment In contrast, large employers have premiums that are predominantly experience-based, with nearly 90% reflecting their claims history Furthermore, data from various State or Federal workers' compensation schemes is widely regarded as inadequate for measuring work-related health issues, as compensation payments significantly underestimate the true costs of occupational injuries and illnesses This underestimation arises because aggregated statistics only include injuries and illnesses that have been officially claimed and accepted Research has highlighted the systematic under-reporting of workplace fatalities and injury rates, with Australian data showing that only 39.6% of individuals who experienced a work-related injury or illness applied for compensation Additionally, a study of work-related fatalities indicated that while 249 deaths were reported in a specific year, only 149 were included in the National Data Set for Compensation-based Statistics.
OHS incidents often go uncompensated due to various factors, primarily when the injured individual does not file a compensation claim, often deeming their injury too minor Other contributing reasons include a lack of awareness regarding eligibility for benefits, concerns about the potential negative effects of a claim on current and future employment, the perceived complexity of the claims process, employers covering costs outside of workers' compensation, and difficulties in linking injuries or illnesses to work-related causes.
Workers' compensation costs are an inadequate measure of occupational health and safety (OHS) outcomes, as compensation premiums do not account for various non-compensable expenses related to occupational illnesses and injuries These externalized costs, as discussed in Section 2.1.4, highlight the limitations of relying solely on compensation data to assess OHS effectiveness.
Workers' compensation premiums and payments represent only a portion of the financial costs businesses face; financial accounting information systems can also track various non-compensated, occupational health and safety (OHS)-related expenses These include costs for repairing or replacing damaged assets, tort liability, litigation expenses, insurance losses, OHS training, and fines, all of which can be directly linked to their respective cost drivers.
Indirect costs related to occupational health and safety (OHS) are often challenging to identify and quantify, making it difficult to attribute them to specific work-related illnesses or injuries These costs include lost productivity, workplace disruptions, and decreased employee morale, which are not easily isolated within accounting systems.
(MacCorkle 1994) These may also relate to the cost incurred to repair or replace company property damaged through accident, sabotage or vandalism, personnel
37 This study relates to the year ended September 2000
38 Table 2-1 revealed 128 worker fatalities for 2004-5 as reported in ASCC (2008b) whereas the ASCC (2008c) Compendium reflects all work-related deaths, including workers and others (e.g bystanders)
Empirical evidence of OHS disclosure
The inclusion of Occupational Health and Safety (OHS) information in corporate annual reports has a long history, dating back over a century Early examples, such as reports from the Australian Agricultural and Pastoral Company, highlighted the health and moral welfare of native workers and their families, along with details on life insurance revenues and expenditures.
49 The AAPC annual reports are available at the Noel Butlin Archives Centre, Australian National
(AAPC 1835, 1838) and safety improvements to mine ventilation (AAPC 1843)
The 1920 corporate disclosure of "unhealthy working conditions" at BHP mines, as noted by Guthrie and Parker (1989), highlights a tendency to present workplace health and safety information primarily in relation to strikes and profit concerns, rather than prioritizing employee wellbeing.
Despite the early availability of disclosure evidence, there has been a notable lack of in-depth analysis regarding the composition of health and safety information in sustainability reporting This gap persists across various studies conducted over the last 35 to 40 years, which include corporate annual reports, internet disclosures, and standalone TBL, CSR, EHS, and sustainability reports The next section will provide a comprehensive review of this literature.
Research has confirmed the influence of stakeholder demand on the provision of CSR information (for example, Deegan and Blomquist 2006; Deegan and Rankin 1997; Tilt
Since 1994, there has been a consistent interest among stakeholders in Occupational Health and Safety (OHS) disclosures, as highlighted by various studies (Brown et al 2005; Deegan and Rankin 1997, 1999; Epstein 2008) A notable 2005 survey involving 495 stakeholders, including employees, consultants, academics, NGOs, and financiers, revealed that 60.4% considered OHS information to be "very important."
In the 1960s, initial attempts to quantify employee capital emerged, focusing on valuing aspects such as replacement costs and various acquisition, training, and separation expenses (Flamholtz et al 2002) However, these early models overlooked occupational health and safety (OHS) considerations, as highlighted in Flamholtz's 1973 work.
The process of human resource accounting involves identifying, measuring, and communicating essential information about human resources This approach aims to achieve three key objectives: first, to determine the types of information necessary for effective human resource management; second, to create a system that delivers insights about an organization’s human resources; and third, to analyze the organizational impact of human resource accounting (Lee et al.).
Human resource cost accounting models have largely overlooked expenses related to employee safety programs and non-standard separation methods, such as early retirement due to injury or illness Despite these omissions, the theoretical and empirical studies in this field have led to a significant body of literature on human resource accounting, as evidenced by works from Baker (1974), Brummet (1970), Flamholtz (1973, 2002), Grojer and Johanson (1998), Jones (1998), and Mirvis and Macy (1976).
By the early 1990s, Harte and Owen (1991) noted that human resource data was the predominant form of corporate social responsibility (CSR) information reported in corporate reports Prior to this period, such disclosures were primarily focused on human resources, but attention began shifting towards environmental issues thereafter Gray et al (1996) indicated that this shift was influenced by legal requirements in the UK, where both employee reporting and employment reporting were recognized in law Specifically, the Industrial Relations Act 1971 mandated that UK employers disclose information to trade unions to serve two essential functions.
(i) it must be information without which the trade union representatives would be to a material extent impeded in carrying on collective bargaining and;
Employers are obligated to disclose information that aligns with good industrial relations practices, particularly for the purpose of collective bargaining (Maunders and Foley 1974, p 110).
With regard to the content of these disclosures, Maunders and Foley (1974) suggest,
Information valuable to trade union negotiators can be categorized into two main types: employee or labor force-oriented data and data that reflects the 'ability to pay.'
In 1974, UK companies began reporting on various employee-related issues, encompassing health and safety, staff turnover, pensions, training and education, as well as equal opportunities and gender and minority concerns (Gray et al., 1996).
Maunders and Foley (1974) emphasize the importance of a composite set of goals, including employee objectives, for a company's effective operation and accountability This perspective is reflected in sustainability reports from the 1990s and early 2000s, which prominently featured employee-related disclosures However, many studies during this period did not specifically address Occupational Health and Safety (OHS) disclosures, often grouping OHS information under broader themes.
The duty of disclosure is subject to six key exceptions Firms are prohibited from providing information that could jeopardize national security, violate legal statutes, or pertain to an individual without their consent Additionally, firms must refrain from disclosing information that could significantly harm an employer's interests beyond collective bargaining implications, data obtained for legal proceedings, or any information acquired in confidence.
• ’social’ disclosures (for example, Cormier and Gordon 2001; Deegan et al 2000; Epstein and Freedman 1994)
• ‘employee relations’ (see for example, Subbararo and Zeghal 1997)
• ‘human resource’ disclosures (see for example, Andrew et al 1989; Brown et al 2005; Danastas and Gadenne 2006; Guthrie and Parker 1989; Purushathman et al 2000; Ratabajongkol et al 2006; Tsang 1998)
• ‘operations risk’ disclosures (see for example,Linsley and Shrives forthcoming)
• ‘hse’ (health, safety and environment) disclosures (see, Holland and Foo 2003)
Within the intellectual capital literature, OHS has been aggregated within:
• ‘human capital’ disclosures (see for example, Ax and Marton 2008; Li et al
• and the ‘external management’ category, or ‘key performance area’ of a knowledge management value hierarchy (see for example, Fletcher et al
Assuming that studies have effectively categorized health and safety information within employee or human resources CSD poses a risk This is evident in the works of Schneider and Samkin (2008) and Belal (2001), who initially recognized occupational health and safety (OHS) as an employee-related issue but later chose to exclude it from their definitions of employee-related categories in their disclosure indices While Schneider and Samkin (2008) did not clarify their rationale for excluding OHS, they did provide explanations for other variations between the preliminary and modified versions of their intellectual capital reporting research instrument.
(2001) also removed OHS from the definition of the employee disclosure category because, “in the authors opinion, [it] should have been classified as environmental disclosure” (p276)
Despite significant attention to employee-related issues over the past two decades, most studies offer limited insights into Occupational Health and Safety (OHS) disclosures However, some exceptions exist, primarily involving content analyses of Corporate Social Responsibility (CSR) disclosures in annual reports These studies identified both the number and percentage of companies reporting OHS information, as well as the volume of such disclosures, typically measured by pages or sentences.
• Gray et al (1995b) examined UK corporate annual reports for the period
Summary
The global emphasis on productivity and competitiveness has significantly transformed Australia's legislative and industrial relations landscape, resulting in increased complexity in occupational health and safety (OHS) and heightened risk profiles for employers This shift has led to diverse interpretations of health and safety requirements, as self-regulatory OHS legislation and varying institutional frameworks create inconsistencies in risk management practices Consequently, employers make individualized decisions regarding the design and implementation of OHS controls Additionally, managers may hesitate to invest in OHS measures at optimal levels due to the discretionary nature of such expenditures, the substantial costs of prevention, the challenges in quantifying benefits, and the externalization of failure costs.
Work-related injuries and illnesses impose significant physical, social, and financial burdens on various stakeholders, necessitating corporate governance accountability for managerial decisions This accountability is fulfilled by providing stakeholders with relevant and reliable information regarding occupational health and safety (OHS) risks and outcomes However, the decline in workplace safety inspectors and the reduction of trade union entry rights are undermining traditional OHS oversight In this context, alternative accountability mechanisms, such as publicly sharing corporate OHS information, are essential.
(Markey 2004; Peetz 2006; Watson et al 2003)
Corporate communication media, including annual reports, sustainability reports, and websites, serve as crucial tools for managers to communicate their chosen occupational health and safety (OHS) strategies and the effectiveness of their programs These disclosures not only highlight the fundamental rights of employees and contractors to a safe working environment but also ensure that stakeholders receive the quality information necessary to make informed decisions and hold employers accountable for their OHS performance.
Over the past 30 years, significant attention has been given to Corporate Social Responsibility (CSR) disclosures, particularly in areas like environmental performance, while Occupational Health and Safety (OHS) reporting has received limited scrutiny, aside from a few studies such as Brown and Butcher (2005) This lack of focus on OHS disclosures may stem from the long-standing history of OHS reporting, resulting in a gap in understanding the specifics, information content, and quality of these disclosures.
Limited attention to the construction of corporate accounts of Occupational Health and Safety (OHS) has resulted in a lack of understanding regarding the effectiveness of frameworks like the Global Reporting Initiative (GRI) in enhancing OHS reporting quality This research aims to fill that gap by analyzing the structure, content, and quality of OHS accountability information, as well as the evolution of corporate OHS disclosures over time Chapter 3 presents a theoretical framework for examining these corporate disclosures.