Workplace investment in Health Safety and Well-being (HSW) is typically reflected in financial accounts as a cost rather than increasing the firm’s value or capacity to prevent future expenditure associated with poor health and safety outcomes. Traditional measures of HSW have focussed on lagging metrics that report on incidents of poor safety performance. Although these lagging metrics still dominate reporting, research indicates that such measures are unreliable. HSW information reported in corporate reports is not standardised and is often open to interpretation. 

The purpose of this study is to examine if financial concepts can be used to represent the value of firm HSW capacity in corporate reporting. If HSW capacity (the ability to manage HSW risk) is seen as an asset, then how might this capacity be measured and reported in a manner consistent with corporate reporting? Second, if HSW capacity can be measured, would this influence the value of the firm and or the overall effectiveness and priority of HSW investment?

The study used a mixed methods approach of surveys and detailed interviews focussed on understanding what HSW information was being reported and how useful this information was to those preparing, auditing, and using this information. Respondents and interviewees were asked structured and open-ended questions around the nature of HSW capacity, issues and opportunities for improvement. The survey sampled users of HSW information and preparers of HSW information. Ten detailed interviews were conducted to gain insight into how HSW reporting could be improved. 

Based on the literature review, survey and interview data, there is a consensus that the current way HSW injuries, illnesses and fatalities are reported by corporations does not meet the needs of users and that measures that provide more insight into the capacity of the organisation to manage HSW is wanted. 

There are several key findings from the study. First, the importance of HSW at board level is impacted by weak disincentives for poor safety and unclear incentives for HSW capacity, potentially maintaining the status quo. Second, HSW capacity can be viewed conceptually as an asset that provides future benefits to the firm rather than a compliance cost. A conceptual model for understanding HSW capacity and its relationship to firm value has been proposed which may assist in identifying HSW capacity as an asset and in the future as a separately identifiable intangible asset. Third, current measures of HSW being reported are not consistent with how directors, investors or analysts form views on other categories of risk. Fourth, sustainability frameworks that define reporting requirements for HSW information mainly use lag measures of poor safety performance.

Finally, there has been recent research undertaken that provides potentially improved measures that are likely to better meet the needs of users in understanding HSW capacity. HSW professionals have a role in leading firms to move to reporting measures that better meet the user needs. If clearer measures that identify the capacity for firms to manage future HSW risk, can be reliably reported upon then this is likely to have a positive influence on firm value as well as HSW performance.