This is the eleventh article in a weekly series on psychosocial hazard management in Australia. The series builds week on week, from the commercial stakes through recent prosecutions to The Psychosocial Safety Blueprint™, a proprietary executive operating model developed by Culture Plus for governing the systems that determine psychosocial safety. Subscribe on cultureplusconsulting.com.
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Last week, this series introduced the Psychosocial Safety Blueprint™, built around six organisational systems that determine whether psychosocial safety is effectively governed, embedded and sustained. Over the coming weeks, I will examine each of the Six Pillars™ in turn, beginning with Governance because it establishes the accountability, oversight and decision-making architecture on which the other five depend.
In most organisations, governance does not fail because psychosocial safety is considered unimportant. It fails because accountability becomes fragmented. Responsibility for psychosocial safety is frequently assigned to People and Culture, WHS or wellbeing teams, while many of the decisions that materially shape psychosocial risk continue to be made elsewhere in the organisation. This creates a structural disconnect between those charged with managing the risk and those with authority over the systems, resources and operating conditions that create it.
Effective governance closes that gap. It establishes clear executive accountability, ensures psychosocial risk is considered within material business decisions, and provides boards and senior leaders with sufficient visibility to understand whether risks are emerging and whether controls are working as intended.
The decisions were never HR’s to make
Many of the most significant drivers of psychosocial risk sit within core business decisions. Restructures, workforce reductions, resourcing models, performance frameworks, technology deployments, leadership appointments and changes to operating models can all materially alter workload, role clarity, job control, organisational justice and leadership behaviour.
These are not typically decisions owned by HR or WHS. They are executive decisions.
Yet responsibility for psychosocial safety is often positioned several layers below the executive table. As a result, the functions tasked with managing psychosocial risk may have limited authority to influence the organisational decisions creating it, while those making those decisions may not be required to systematically consider psychosocial impacts before implementation.
This is more than a practical weakness. It is also a governance issue.
Section 27 of Australian model work health and safety legislation places a personal due diligence obligation on officers. In practical terms, this means officers are required to maintain current knowledge of work health and safety matters, understand the hazards and risks arising from the organisation’s operations, ensure appropriate resources and processes are available to manage those risks, ensure information about hazards and incidents is received and acted upon, and verify that relevant processes are operating effectively.
These obligations cannot be discharged simply by allocating responsibility to HR, WHS or a steering committee. Delegation can support execution, but it does not transfer accountability.
The implication is clear: if executive decisions can create or materially increase psychosocial risk, then psychosocial safety must be embedded into the governance of those decisions. HR and WHS can provide expertise, data and challenge, but they cannot substitute for executive ownership.
What good governance looks like
In more mature organisations, accountability for psychosocial safety is explicit and visible. A named executive holds enterprise-level responsibility for outcomes, rather than accountability being spread across multiple functions without a clear owner. Boards and executive teams receive regular reporting that goes beyond lag indicators such as incidents, claims or complaints and includes relevant leading indicators, emerging risks and information on control effectiveness.
Psychosocial risk is also integrated into established enterprise risk and governance frameworks rather than managed as a separate wellbeing issue. This allows it to be considered alongside financial, operational, reputational and regulatory risk, and ensures it is visible within the same decision-making processes used to manage other material organisational exposures.
Importantly, good governance also changes when risk is considered. Restructures, significant resourcing decisions, changes to performance systems and major technology implementations should be assessed for potential psychosocial impacts before they are approved and implemented. The objective is not to eliminate organisational change or operational pressure. It is to ensure foreseeable risks are identified, assessed and controlled as part of normal business decision-making.
The strength of this approach is that it can be evidenced. An organisation can demonstrate who holds accountability, what information is reported to executives and the board, how psychosocial risk is reflected in the enterprise risk register, and whether major business decisions are subject to psychosocial risk assessment. These are tangible indicators of governance maturity and provide a more reliable basis for assurance than policy statements or expressions of intent.
This distinction between intent and structure is important. Many leadership teams are genuinely committed to psychosocial safety. The challenge is whether that commitment has been translated into governance mechanisms that continue to operate when commercial pressures increase, resources tighten or organisational change accelerates. Those are often the circumstances in which psychosocial risks become most pronounced.
A board asking the right question
The experience of a national maritime operator illustrates the issue. Following a serious workplace incident, the board needed to determine whether the event reflected an isolated local failure or whether it pointed to a broader weakness in the organisation’s approach to psychosocial risk.
The operational investigation could explain what had occurred at one location, but it could not provide the board with confidence that psychosocial risks were being governed consistently across the organisation’s broader network. Nor could it confirm that controls assumed to be operating at other sites were effective in practice.
The organisation responded by strengthening its governance approach across its Australian operations. Governance maturity was assessed across sites, executive oversight was clarified, existing controls were reviewed and a structured program of improvement was established across the network.
This created a level of enterprise visibility that had not previously existed. The board had greater clarity over accountabilities, common expectations across operations, a stronger set of leading indicators and a more robust basis for testing whether controls were effective. It also created a stronger evidence base for regulatory assurance and continuous improvement.
Significantly, the organisation did not begin with a broad wellbeing campaign or a wholesale redesign of every work system. It began by establishing the governance architecture required to understand the risk properly: who was accountable, where material exposures existed, what controls were in place and how confident the organisation could be that those controls were effective.
That foundation then enabled subsequent improvements to be prioritised and coordinated more effectively.
This is why Governance sits first within the Six Pillars™. It does not replace work design, leadership capability, employee voice, assurance or other controls. Its role is to ensure those elements are connected, overseen and managed as part of one enterprise system.
The governance test
The central question is not whether an organisation cares about psychosocial safety. Most organisations do. The more important question is whether that commitment has been translated into clear accountability, decision rights, reporting, oversight and evidence.
A useful test for boards and executive teams is therefore relatively simple: if a serious psychosocial incident occurred tomorrow, could the organisation determine whether it was an isolated event or an indicator of a broader systemic weakness? And could it answer that question with evidence?
If the answer depends largely on reassurance, judgement or retrospective investigation, the organisation may be managing psychosocial safety operationally, but it is not yet governing it as an enterprise risk.
Next week, the series moves to Pillar II: Work Design, and the role organisational systems play in creating or reducing psychosocial risk before harm becomes visible.
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This article provides executive advisory commentary, not legal advice. Organisations should obtain advice on their specific legal obligations from appropriately qualified legal practitioners.
Felicity Menzies is the CEO and Principal Consultant of Culture Plus Consulting, a specialist executive advisory practice in organisational culture, psychosocial safety and executive governance. For more than fifteen years, she has advised boards, chief executives and executive leadership teams across government, listed companies and regulated industries on the organisational systems that shape culture, leadership, workplace conduct and psychosocial risk.