Compliance training for directors and officers: meeting due diligence

The duty on an officer is not a duty to be told things. It is a duty to go and find out, and then to check that what you were told is true.

That distinction is the whole subject. Most director briefings explain the six elements of due diligence, everyone nods, and nobody leaves with a different practice. The elements are not the hard part. Verification is.

Two duties, both personal

Section 27 of the Work Health and Safety Act. Officers must exercise due diligence to ensure the PCBU complies with its WHS duties. Section 27(5) sets out what due diligence includes, in six parts. Officers must take reasonable steps to:

acquire and keep up to date knowledge of work health and safety matters
gain an understanding of the nature of the operations and the hazards and risks associated with them
ensure the PCBU has and uses appropriate resources and processes to eliminate or minimise risks
ensure the PCBU has appropriate processes for receiving and considering information about incidents, hazards and risks, and responding in a timely way
ensure the PCBU has and implements processes for complying with its duties and obligations
verify the provision and use of the resources and processes above

Safe Work Australia's interpretive guideline and Comcare's guidance for officers are the primary references. The duty is personal and non-delegable. Appointing a competent safety manager is a sensible thing to do and it does not discharge it.

Section 180 of the Corporations Act. Directors and officers must exercise their powers and discharge their duties with the degree of care and diligence a reasonable person would exercise in the corporation's circumstances, occupying that office. The standard is objective but the assessment is contextual: the business, its regulatory environment, the individual's role, the information available at the time and the foreseeable risks.

The two duties are not the same, but they point in the same direction. Know the business. Know the risks. Make sure there are systems. Check the systems work.

The bit most boards skip

Five of the six WHS elements are about ensuring things exist. The sixth is about verifying that they do.

Verification is where officers get caught. A board can point to a WHS policy, a risk register, a reporting framework and a training programme, and still fail the duty if nobody ever tested whether any of it operates as described. Verification looks like site visits with unscripted conversations, asking for evidence rather than assurance, independent audit, testing whether an incident reported at the front line actually reached the board, and following one issue all the way through to closure.

If the board pack contains only lag indicators (injuries, lost time, claims) and green traffic lights, you are being reported to, not verifying. Ask what would have to be true for the green light to be wrong, then go and check that thing.

What officer training has to cover

Generic governance content fails here because the duty is specific to *your* operations. Useful training does four things.

Names your hazards. Not "workplace hazards". The three or four things in this business most likely to kill or seriously harm someone, plus the psychosocial hazards, which boards still routinely under-weight relative to physical safety.

Teaches the questions. The practical skill is knowing what to ask and recognising a non-answer. "Are we compliant?" gets you a yes. "Show me the last three incidents where a control failed and what we changed" gets you information.

Covers the psychosocial duty. Officer duties apply to psychological health exactly as they apply to physical safety. Every jurisdiction now regulates psychosocial risk expressly, and Victoria and Queensland have gone further than the plain model provisions. Boards that treat mental health as an employee assistance line have not met the duty.

Documents itself. Board minutes that record the substance of a discussion, the questions asked, the risks weighed and the reasoning are the primary evidence of engagement. "Noted the WHS report" is not evidence of anything.

For most boards the practical starting point is a structured programme on essential compliance duties for directors, run at induction and refreshed as the operations and the law change.

Consequences are real and personal

Officers can be prosecuted personally under the WHS Act. Penalty levels vary by jurisdiction and offence category, and Safe Work Australia maintains a comparison of maximum monetary penalties across jurisdictions. Industrial manslaughter offences carrying imprisonment for individuals now exist across Australian jurisdictions, introduced at different times from 2004 onwards.

Under the Corporations Act, a breach of section 180 can lead to civil penalty proceedings and disqualification from managing corporations. ASIC has repeatedly pursued directors on the basis that failing to prevent or address the company's non-compliance exposed the company to foreseeable harm.

Note what these have in common. They do not require an officer to have caused the harm. They turn on whether the officer took reasonable steps.

A practical cadence

On appointment: full induction covering both duties, the organisation's specific hazards, the reporting structure and what the board actually receives.
Every meeting: WHS and psychosocial risk as a standing item with substance, not a report tabled and noted.
Annually: update on legal change, a review of whether the board's information is telling the truth, and one verification exercise the board chooses rather than management proposes.
On change: new operations, acquisitions, major restructures, a serious incident. Each is a trigger to re-examine what the board knows.

Continuous is the operative word in the first element. The duty to acquire and keep knowledge up to date does not have a completion date, which is why a single induction module has never been enough.

Common questions

Who is an officer under the WHS Act?

The WHS Act adopts the Corporations Act concept of an officer, broadly people who make or participate in making decisions affecting the whole or a substantial part of the business. It captures directors and senior executives, and it can capture others depending on actual influence.

Can an officer delegate their due diligence duty?

No. The duty under section 27 is personal and non-delegable. An officer can rely on the work of others to inform themselves, but cannot transfer the duty to a safety manager, a consultant or a committee.

What are the six elements of due diligence?

Section 27(5) sets out acquiring and updating WHS knowledge, understanding the operations and their hazards, ensuring appropriate resources and processes, ensuring processes for receiving and responding to information about incidents and risks, ensuring processes for complying with duties, and verifying that all of this is happening.

Is there personal liability for officers?

Yes. Officers can be prosecuted personally under the WHS Act, and industrial manslaughter offences now exist across Australian jurisdictions. Under the Corporations Act, breaches of section 180 can attract civil penalties and disqualification.

How often should directors do compliance training?

The duty to acquire and keep up to date knowledge of work health and safety matters is continuous, so a single induction session does not meet it. Most boards combine an induction with regular updates as law and operations change.