WHS Series –
How a PCBU manages its risks –
Management commitment
There is an often overlooked second and third part to a PCBU’s duty to ‘ensure health safety’.
They concern:
management commitment, and
a duty to consult where, in relation to a safety matter:
a PCBU – must consult with workers, and
all duty holders – must consult, co-operate and co-ordinate with each other.
The contents of this guide are for information purposes only and should not be treated as being legal advice.
This guide explains:
That management commitment is simply another way to describe a PCBU’s good corporate culture.
Why it is important, especially from a legal point of view.
How to create a good corporate culture.
Management commitment = corporate culture
Although SafeWork NSW’s Code of Practice How to Manage Work Health and Safety Risks¹ refers to the concept of ‘management commitment’ (which is the central component to their risk management process diagram²), what they are really talking about is corporate culture.
Corporate culture is key – it drives behaviour in the workplace.
One explanation³ of corporate culture is that it is “the personality of a group” where “although each individual in every group is different, the group’s culture influences the behaviour of the individuals.”
Goals are described “through values and beliefs and guides activity through shared assumptions and shared norms.”
By way of comparison, strategy “offers a formal logic for the company’s goals and orients people around them.”
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¹Published August 2019.
²At page 8 of that code.
³Build a Corporate Culture That Works, Start by thinking about the dilemmas your people will face, Professor Erin Meyer (INSEAD), Harvard Business Review, Volume 102, Number 4, July-August 2024, page 66.
Why is corporate culture important?
From a business perspective, there is a saying that “culture eats strategy for breakfast”.
Corporate culture has been regarded as being key to a business’s success because it is designed to shape employee behaviour, turning the theory of desirable workplace behaviours into reality.
From a business perspective
For every business that wants to succeed, having a good corporate culture is a ‘not negotiable’. This is because without one, a business cannot drive desired workplace behaviours, including safety behaviours.
From a legal point of view
Generally speaking
Corporate culture is also important in terms of punishment.
If a business doesn’t have a good corporate culture, it runs the risk of being penalised for it.
When deciding on the amount to impose as a civil penalty for a business’s breach of legislation, corporate culture is one of the factors that goes under the judge’s microscope.
This is because the purpose of imposing a civil penalty is deterrence.
Not only is the penalty supposed to stop the entity being prosecuted from re-offending, it is also supposed to discourage others from breaking the same laws.
In a recent High Court decision, when determining the civil penalty in relation to the breach of the Fair Work Act 2009⁴, the High Court adopted an approach taken by it in an earlier action taken by the Trade Practices Commission⁵ (the then regulator for consumer and competition law).
In that case, the court considered a list of factors, one being corporate culture, which it described as being whether “the company has a corporate culture conducive to compliance with the Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.”⁶
Corporate culture – it is regarded as being central to having good WHS systems in place.
Under WHS laws
It is relevant when deciding whether a corporation has committed a WHS offence.
The WHS Act 2011 contains provisions that expressly take corporate culture into account when determining whether a corporation committed an offence.
When determining if an offence has been committed, the courts will look at whether “a corporate culture existed within the body corporate that directed, encouraged, tolerated or led to the carrying out of the conduct” as well as whether the body corporate can prove that “it took reasonable precautions to prevent … the conduct, or … the authorization or permission of the conduct.”⁷
In this respect, corporate culture is defined as meaning ‘1 or more attitudes, policies, rules, courses of conduct or practices existing within the body corporate generally or in the part of the body corporate in which the relevant activity takes place.’⁸
Given that the WHS Act 2011 was recently amended to include an industrial manslaughter offence, now more than ever, the importance of corporate culture cannot be ignored.
It is relevant for determining the penalty for a WHS prosecution.
Earlier this year⁹, the District Court took the organisation’s values into account when determining the appropriate fine.
That case involved a fatality where the worker was hit by a forklift because he couldn’t be seen (working in low light where his high-vis clothing was covered up by a grey hoodie).
The judge referred to both the business’s Health and Safety Policy as well as it’s values in the following way:
“87. The offenders have a Health and Safety Policy endorsed by the General Manager, which aspires to promote a positive safety culture for the entire business based on positive leadership and effective communication.
88. The offenders’ organisational values which underpin the approach to safety are integrity, challenge, collaboration and ingenuity…
93. As part of an integrated SMS, the offenders have in place a safety system which reflects their organisational commitments and strategies to mitigate risks associated with operations.
The offenders’ focus on strategy includes:
(a) establishing a culture of genuine and accountable WHS leadership;
(b) building improved competency around the management of WHS risks;
(c) engaging further with their workers and subcontractors on safety matters;
(d) utilising fit for purpose WHS systems that are resilient and able to adapt in response to changing situations and business growth; and
(e) promoting a culture of visible performance via inspection, auditing and incident reporting.”
However, despite these features, the defendant’s corporate culture didn’t drive the desired safety behaviour.
Both defendant companies were convicted and fined.
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⁴Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (13 April 2022).
⁵Trade Practices Commission v CSR Ltd [1991] ATPR 41-076.
⁶Ibid, at pages 52,152 to 52,153.
⁷Sub-section 244B(2) of the WHS Act 2011.
⁸Sub-section 244B(4) of the WHS Act 2011.
⁹SafeWork NSW v Multiquip Poultry Pty Ltd [2025] NSWDC 15 (12 February 2025).
How to create a good corporate culture?
In her article Build a Corporate Culture That Works, Start by thinking about the dilemmas your people will face¹⁰ Professor Erin Meyer (INSEAD) explains that listing a number of values that are important to your business won’t necessarily be enough to create a corporate culture where employees adhere to those values in practice.
She suggests crafting culture statements, turning a list of values into collective actions, citing examples such as Amazon’s “Have a backbone: Disagree and commit”.
She explains that these statements can be refined after stress-testing them against typical dilemmas that your workforce may typically face at work (where a dilemma is described as being a situation to which two equally reasonable courses of action are presented to the worker).
Keeping in mind that the corporate culture is supposed to drive behaviours within the workforce, business owners need to check whether the culture statements drive the preferred course of action.
If not, the words used in the statement will need to be tweaked.
Once the business owner has settled on a set of culture statements, they can be embedded by also:
using concrete, colourful images to reinforce the underlying messages,
hiring people whose personalities align with your culture,
aligning the behaviours you want to drive with your strategic objectives, and
identifying those situations to which your culture does not apply.
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¹⁰ Harvard Business Review, Volume 102, Number 4, July-August 2024, page 66.
Conclusion
This guide is to be read in conjunction with the guides that explain how a PCBU manages its risks by following a set process and incorporating consultation.
Management commitment is the central component to a PCBU’s duty ‘to ensure health & safety’.
Not only does SafeWork NSW look for it when enforcing the WHS laws but the law courts do too.
This is why it is particularly important for PCBUs to understand how to create a good corporate culture so everyone is motivated to adopt safe behaviours in the workplace.
The next guide in this series explains how a PCBU manages its risks by complying with its duties to consult.
