By S. S. Suarez
What is corporate governance? Why is it that many companies nowadays are starting to carry out corporate governance principles of integrity and ethical behavior, disclosure and transparency.
For safety practitioners, corporate governance is a blessing in disguise. Now that it has become a regulatory requirement by the Securities and Exchange Commission (SEC), safety has become imperative for corporations as part of their compliance.
According to Wikipedia, corporate governance is "the system by which companies are directed and controlled. It involves regulatory and market mechanisms, and the roles and relationships between a company’s management, its board, its shareholders and other stakeholders and the goals for which the corporation is governed.”
The history of corporate governance could be traced in mi-70s. There were corporate scandals that included bribery to government officials to falsify records that sacrificed health, safety and environmental compliance.
The period was characterized by corporate greed that violates every ethical behavior in the name of profit. The discovery of bribery prompted the US Security and Exchange Commission to look into the internal controls of corporations.
Who can forget the high-profile collapses of Enron Corporation and MCI Inc. involved in accounting fraud? Hence, corporate governance requires listed companies to have comprehensive internal controls addressing not only financial risks but also risks relating to the environment, business reputation and health and safety.
In the Philippines, we have our own corporate governance code adopted by SEC. The code also compels corporations to appoint a compliance officer who will report directly to the chairman of the board. His role is to monitor the company's compliance with the code and the rules of other regulatory agencies. He is also responsible to issue a certificate each year explaining the extent of the company's compliance with the code and the reasons for any deviations. Moreso, the compliance officer can be summoned before the SEC to answer questions about the company's compliance with the code.
Part of this compliance is the strict adherence to health and safety regulations. Health and safety should be a key component of every company’s corporate governance framework by ensuring that companies provide a safe workplace for employees, contractors and visitors.
Although the history of OSH laws can be traced back to the times of Hammurabi, many companies have only done lip service to safety. What we get are empty words and motherhood statements from companies that take advantage of the cheap labor this country has to offer. Since then, corporate governance has been the game changer. With governance, companies must institute internal controls which include not only financial systems but also health and safety initiatives.
It behooves us then as prime movers of health and safety to educate management and employees on the essence of health and safety compliance as part of corporate governance. Integrity and ethical behavior, disclosure and transparency should characterize our safety audits and safety program implementation. Audit provides a check and balance and it instills discipline and adherence to safety programs.
Of course, we should look beyond safety compliance. Our goal should be to create a culture of safety within the organization. It may take years but with patience, proper motivation and governance, we can reach that goal.
