HSEHealth & Safety

Executive

Further development of a corporate health and safetyperformance management index for use by business,

investors, employees, the regulator and otherstakeholders: validating the index

Prepared by Loughborough University for the Health and Safety Executive 2005

RESEARCH REPORT 335

HSEHealth & Safety

Executive

Further development of a corporate health and safetyperformance management index for use by business,

investors, employees, the regulator and otherstakeholders: validating the index

Deborah Walker and Alistair CheyneCentre for Hazard and Risk Management

Loughborough University Business SchoolLoughborough

LE11 3TU

The Health and Safety Commission (HSC) set out a number of actions in Revitalising Health andSafety that were aimed at promoting greater corporate responsibility and accountability for health andsafety across private, public and voluntary sectors. This included encouragement of investors andother key financial players to have a greater regard to health and safety management performancewhen making investment decisions. The Corporate Health and Safety Performance Index (CHaSPI)was developed on behalf of the Health and Safety Commission as a tool to aid this process. This reportdescribes a project that aimed to validate the index by testing its completion and use by large and verylarge organisations: and establish its value to investors and other stakeholders. The research is basedon feedback interviews with 57 organisations that had completed or attempted to complete CHaSPIand 25 stakeholder organisations particularly investors and other financial players who may be users ofCHaSPI data. Overall there were few issues related to the practical use of CHaSPI, most users found itface valid and a number of potential benefits were identified. Difficulties were highlighted in relation tothe ability to complete CHaSPI at group level, the value of some of the indicators and beingproportionate to low risk environments. Based on these findings the recommendations focus ondeveloping practical solutions to encourage uptake and use.

This report and the work it describes were funded by the Health and Safety Executive (HSE). Itscontents, including any opinions and/or conclusions expressed, are those of the authors alone and donot necessarily reflect HSE policy.

HSE BOOKS

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© Crown copyright 2005

First published 2005

ISBN 0 7176 2991 0

All rights reserved. No part of this publication may bereproduced, stored in a retrieval system, or transmitted inany form or by any means (electronic, mechanical,photocopying, recording or otherwise) without the priorwritten permission of the copyright owner.

Applications for reproduction should be made in writing to: Licensing Division, Her Majesty's Stationery Office, St Clements House, 2-16 Colegate, Norwich NR3 1BQ or by e-mail to hmsolicensing@cabinet-office.x.gsi.gov.uk

Acknowledgments The authors would like to thank all those organisations that anonymously completed and commented on the index as part of the validation exercise. Our thanks are also extended to the following stakeholder organisations for assisting in this research: Aberdeen Asset Management Association of British Insurers Chemical Industries Association Co-operative Insurance Society Gerrard Henderson Global Investors Hermes Investment Management Ltd Innovest Strategic Value Advisors Insight Investment Management Ltd Institute of Directors Institute of Risk Management Jupiter Asset Management Morley Fund Management PIRC Ltd Prudential plc QBE Insurance Rathbones Greenbank Investments RCM (UK) Ltd Schroder Investment Management SG Asset Management Trade Union Congress UKSIF Universities Superannuation Scheme Wilkinson-Rodgers Insurance Brokers We would like to acknowledge the assistance of Dr Robin Tait, formerly of Loughborough University Business School and Dr Yoshikatsu Shinozawa of Loughborough University Business School in carrying out the research reported here. Finally we would like to acknowledge the support of Greenstreet Berman and Enable Infomatrix on development and technical issues

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EXECUTIVE SUMMARY Background The Health and Safety Commission (HSC) set out a number of actions in Revitalising Health and Safety that were aimed at promoting and encouraging greater corporate responsibility and accountability for health and safety across private, public and voluntary sectors. This included encouragement of investors and other key financial players to have a greater regard to health and safety management performance when making investment decisions, thus acting as a lever for improving health and safety. A report by Claros, commissioned by the Health and Safety Executive (HSE) highlighted the potential for health and safety indicators that allow stakeholders to assess a company’s health and safety performance. This report, together with the need to provide frameworks for Corporate Social Responsibility (CSR) reporting provided a strong case for the development of a health and safety performance management index for use by investors and other financial players when making key investment decisions. Further work by Greenstreet Berman, also for the HSE, resulted in the production of the Corporate Health and Safety Performance Index (CHaSPI), an index which covers five main areas, combined to provide an overall index score. These areas include health and safety management, injury rates, sickness absence rates, occupational health management, and a major hazard indicator. In addition to these five core indicators the index also seeks information on whether or not the organisation engages in highly regulated activities, if there is a director’s declaration that all health and safety risks are adequately managed, and a code for indicating when an incident has occurred that has the potential to cause a major loss. The current form of the CHaSPI is the result of a series of pilot studies and investigations involving a number of users and stakeholders. The next stage of the index’s development will be a larger scale validation of how it works in reality and through its online interface. This is the focus of the research described here. In particular this research reported here aims to:

• Validate the index by testing its completion and use by large and very large companies and public bodies; and

• Establish its value for investors and other financial players as well as insurers.

The intention is that this research thereby produces independent evidence of the practicability and value of the index. Method In line with the aims of the research, two separate studies were carried out concurrently:

• Study 1: Testing the completion and use of the index by a number of large organisations; and

• Study 2: Investigate the value of the index to a number of key stakeholders.

Both studies consisted of three phases. The first focussed on the identification of participants. The second stage was concerned with developing data collection protocols, aimed at assessing the practicality, validity and future use of the index. The final stage of each study involved applying those protocols in order to gather views from both index completers and stakeholders. Results

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The results are based on feedback interviews with 57 organisations that had completed or attempted to complete the CHaSPI and 25 stakeholder organisations, particularly investors and other financial players who may be users of CHaSPI data. Overall there were few issues related to the practical use of the index, and most users found it face valid. The main practical suggestions from completing organisations were that the CHaSPI should be provided by the HSE to enhance credibility, and scores should be independently verified. The main difficulties with the index centred on specific indicators, in particular the definitions around the major hazard indicator and the ability to gather sickness absence and injury data. Benefits of completing the index were identified, the most common of which was demonstrating commitment to health and safety, and using the index as a benchmarking tool. Attracting investment was only a concern for public limited companies, as well as being of interest to stakeholders. Most completing organisations and four stakeholder participants felt the CHaSPI is a fair reflection of health and safety performance, although many identified a number of difficulties. The major incident rating was by far the most problematic of the indicators, viewed by a number of participants as being limited in use. There was also a view that the content of the index is not always proportionate to the risk profile of an organisation, particularly those in low risk sectors, for example in the banking sector. In terms of the calculation of the overall CHaSPI score, a relatively consistent message came across that management issues should make the highest contribution. However some participants felt that occupational health management is part of wider health and safety management and should, therefore, have a greater weighting, or be incorporated into the management system indicator. On average, both groups of participants felt that the weightings of the other indicators should be amended slightly. When asked if they would complete the CHaSPI for real, responses from participants were mixed, with most positive responses coming from smaller organisations in both the private and public sectors, with little or no overseas activities. There were indications that participation would increase if a number of the concerns raised were addressed. The majority of stakeholders saw the benefit of having a uniform score for health and safety performance and how this could assist their work especially through benchmarking and engagement. However, this information would probably be supplementary to a portfolio of other tools and information sources that the investment community have access to and in many cases would lead to further research. Particularly important to potential users of the index information is the level at which CHaSPI is completed for an organisation. Most felt that the index scores need to reflect the global operations of UK listed companies. The acid test of the stakeholder interview was the question that asked if they would encourage organisations they work with to complete CHaSPI. Responses to this question were more negative than positive. Reasons for this include the potential burden on business perhaps linked to the low priority of health and safety in investment decision making. Conclusions The research presents evidence which suggests that CHaSPI may be successful, but only after a number of issues are addressed. Overall the usability and face value was considered reasonable and CHaSPI as a whole was well received by a number of organisations who completed it. However the majority of these represented smaller organisations, with no overseas activities. A significant number of organisations identified key problems with aspects of CHaSPI that would prevent them using it in the present format. These problems included:

• Difficulty completing at group level

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• Questioning the value of sickness absence data linked with an inability to collect data

• Unable to appreciate the value of Major Incident Rating and reliably complete this

indicator

• Not proportionate to low risk environments

• Not appropriate to multi-sited organisations operating federal structures Recommendations The research has highlighted a number of practically based recommendations that include the following:

1. The reporting of group operations needs to be incorporated.

2. The contribution of individual indicators to the overall index score should be reviewed.

3. The HSE should continue to offer the CHaSPI website under the HSE banner.

4. Verification is necessary to maintain the integrity of the results on CHaSPI.

5. Promotion of the CHaSPI needs to continue

6. The publicly available results could include an additional comments section, which would enable participating organisations provide some context to their results.

7. A number of issues relating to specific content should be addressed as part of ongoing

development.

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CONTENTS 1. INTRODUCTION .................................................................................................................................... 1

1.1 BACKGROUND............................................................................................................................ 1 1.1.1 CSR and health and safety ................................................................................................. 1

1.2 DEVELOPMENT OF THE CORPORATE HEALTH AND SAFETY PERFORMANCE INDEX.......... 2 1.3 VALIDATING THE INDEX................................................................................................................. 2 1.4 AIMS OF THE PROJECT ...................................................................................................................3

2. METHODOLOGY.................................................................................................................................... 5

2.1 STUDY 1 ...................................................................................................................................... 5 2.1.1 Managing registration.......................................................................................................... 6 2.1.2 Identifying participants ........................................................................................................ 6 2.1.3 Contacting organisations..................................................................................................... 7 2.1.4 Developing protocols........................................................................................................... 8 2.1.5 Interviewing participants...................................................................................................... 9

2.2 STUDY 2 ...................................................................................................................................... 9 2.2.1 Identify and contact financial stakeholders.......................................................................... 9 2.2.2 Developing protocols......................................................................................................... 10 2.2.3 Interviewing stakeholders.................................................................................................. 10

3. RESULTS ............................................................................................................................................. 11

3.1 STUDY 1 – ORGANISATIONS COMPLETING CHASPI............................................................ 11 3.1.1 Sample.............................................................................................................................. 11 3.1.2 Practical use of CHaSPI.................................................................................................... 12 3.1.3 Validity of CHaSPI............................................................................................................. 18 3.1.4 Development of CHaSPI ................................................................................................... 20 3.1.5 Final comments................................................................................................................. 23 3.1.6 Feedback from organisations unable to complete the index ............................................. 24

3.2 STUDY 2 - STAKEHOLDERS .................................................................................................... 25 3.2.1 Sample size....................................................................................................................... 25 3.2.2 Practical use of the CHaSPI.............................................................................................. 26 3.2.3 Validity of CHaSPI............................................................................................................. 29 3.2.4 Development of the CHaSPI ............................................................................................. 32 3.2.5 Final comments................................................................................................................. 35

4. DISCUSSION........................................................................................................................................ 37

4.1 VALIDITY OF THE INDEX.......................................................................................................... 37 4.1.1 Practical use of the index .................................................................................................. 37 4.1.2 Validity of the information gathered................................................................................... 37

4.2 VALUE TO INVESTORS AND OTHER STAKEHOLDERS ........................................................ 39 4.2.1 Level of completion ........................................................................................................... 39 4.2.2 Reporting frameworks ....................................................................................................... 39 4.2.3 Providing the service......................................................................................................... 40 4.2.4 Encouraging completion.................................................................................................... 40

5. CONCLUSIONS AND RECOMMENDATIONS..................................................................................... 41

5.1 RECOMMENDATIONS .............................................................................................................. 41 REFERENCES ......................................................................................................................................... 43 APPENDICES............................................................................................................................................. 44

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Appendix 1: Introductory Letter from HSE......................................................................................... 44 Appendix 2: Email form Validation Team to potential participants..................................................... 46 Appendix 3: Email from Validation Team to registered organisations ............................................... 47 Appendix 4: Introductory Letter from Insight Investment ................................................................... 48 Appendix 5: Study 1 Interview Protocol............................................................................................. 50 Appendix 6: Online Feedback Questionnaire ..................................................................................... 55 Appendix 7: Extract from the May edition of the UKSIF Newsletter.................................................... 58 Appendix 8: Study 2 Interview Protocol .............................................................................................. 59 Appendix 9: Comments on Specific CHaSPI items ............................................................................ 62

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1. INTRODUCTION

1.1 BACKGROUND

Corporate Social responsibility (CSR) is an instrument of positive change taking place in enterprises. It sets the framework and defines the method with which enterprises must operate to be able to meet the ethical, legal, commercial and public expectations that a society has of any enterprise. The European Commission define CSR as

“a concept whereby companies integrate social and environmental concerns in their business operations and in their interactions with their stakeholders on a voluntary basis” (European Agency for Safety and Health at Work, 2004; p7)

CSR can be seen, therefore, as an approach to ‘good business’, which takes into account the social impact an enterprise has on the community both locally and globally (HSC, 2003) and encourages organisations to go beyond bare legal requirements by publicising their investment in human capital and the environment. Several authors argue that a link exists between those organisations that pay attention to, and report CSR issues and improved overall performance (Balabanis, Philips & Lyall, 1998; Zairi & Peters, 2002). CSR concerns include a wide range of areas, including (Vyrakarnam, 1992):

• Environmental protection;

• Philanthropy;

• Involvement in social causes;

• Urban investment; and

• Employee schemes. These themes are echoed by Idowu and Towler (2004), who suggest that UK CSR reports encompass four main perspectives, which are environment, community, marketplace and workplace. Both of these suggested frameworks include scope for the reporting of how employees are treated, an in particular, for the coverage of occupational health and safety standards. 1.1.1 CSR and health and safety

The Health and Safety Commission set out a number of actions in Revitalising Health and Safety (DETR, 2000) that were aimed at promoting and encouraging greater corporate responsibility and accountability for health and safety across private, public and voluntary sectors. This included encouragement of investors and other key financial players to have a greater regard to health and safety management performance when making investment decisions, thus acting as a lever for improving health and safety. This reflects a growing awareness of ethical and environmental investment criteria in the investment market (Jayne & Skerratt, 2003), as well as a more general acceptance that good health and safety performance will be an indicator of overall company ethics.

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A report by Claros Consulting in 2002 (Mansley, 2002), commissioned by the HSC, explored with investors and the wider investment community the need and support for health and safety indicators to enable them to assess a company’s health and safety performance when making investment decisions. The report, taken together with the need to provide frameworks for CSR reporting (Idowu & Towler, 2004) provided a strong case for the development of a health and safety performance management index for use by investors and other financial players when making key investment decisions.

1.2 DEVELOPMENT OF THE CORPORATE HEALTH AND SAFETY PERFORMANCE INDEX

As a result of the growing concern over reporting health and safety issues as part of the CSR agenda, the Health and Safety Executive (HSE) commissioned research into the production of a corporate health and safety performance index. This work resulted in the production of the Corporate Health and Safety Performance Index (CHaSPI) (Marsden, Wright, Shaw & Beardwell, 2004). The index covers five main areas which are combined (in a weighted form) to provide an overall index score. These areas include:

• Health and safety management;

• Injury rates;

• Sickness absence rates;

• Occupational health risk management; and

• Major hazard indicator. In addition to these five core indicators the index also seeks information on whether or not the organisation engages in highly regulated activities, if there is a director’s declaration that all health and safety risks are adequately managed, and a code for indicating when an incident has occurred that has the potential to cause a major loss. At the moment CHaSPI is available in an experimental electronic form, and can be found at www.chaspi.info-exchange.com. As a result of organisations completing the index a limited amount of information becomes publicly available about the health and safety performance of that organisation, including an overall score out of 10. During the trial period, organisational entries are anonymous. The online interface was available before the validation exercise began and had generated some interest and completions before this research got underway. The current form of CHaSPI is the result of a series of pilot studies and investigations involving a number of users and stakeholders. The next stage of the index’s development will be a larger scale validation of how it works in reality and through its online interface. This is the focus of the research described here.

1.3 VALIDATING THE INDEX

A number of practical issues need to be addressed as the index currently stands. At the most basic level the value of the index to both organisations completing it and potential users of the information needs to be assessed. Such an assessment will confirm if the needs of stakeholders, as identified by Mansley (2002) are being met by CHaSPI. In more practical terms the general usability of the interface needs to be investigated, as well as possible future developments.

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As well as the usability and general value of the index, the validity of CHaSPI can be assessed in several different ways and validity can take a number of forms. In particular the index can be assessed in terms of its face validity, its content validity and its construct validity in order to evaluate the practicability and value of the index to a wide range of stakeholders and users. Face validity. In its simplest sense face validity refers to the validity of an instrument at face value. Often, because of its vagueness and subjectivity, this concept is overlooked. In terms of the validity of a theory, Lacity and Jansen (1994) defines validity as making common sense, and being persuasive and seeming right to the reader. Essentially face validity is consensus that a measure represents a particular construct. Related to face validity is the notion of content validity, that is the areas covered by the instrument should be representative to the larger domain. Content validity is usually established by content experts, who are assumed to know what is important in their discipline. This approach appears similar to the validation process of face validity, but yet there is a difference. In content validity, evidence is obtained by looking for agreement in judgments by judges. In short, face validity can be established by one person but content validity should be checked by a number of judges. Construct validity involves determining the extent to which a measure represents concepts it should represent (Dane, 1990). According to Hunter and Schmidt (1990), construct validity is a quantitative question rather than one that can be measured by the correlation between the intended independent variable (construct) and the proxy independent variable (indicator or sign) that is actually used. Other authors (for example, Angoff,1988; Cronbach & Quirk, 1976) argue that construct validity cannot be expressed in a single coefficient; there is no mathematical index of construct validity. Rather the nature of construct validity is qualitative.

1.4 AIMS OF THE PROJECT

The main aim of the project described here is to make an assessment of the validity of CHaSPI in its current form and make recommendations for further development. In particular the research reported here aims to:

• Validate the index by testing its completion and use by large and very large companies and public bodies; and

• Establish its value for investors and other financial players as well as insurers.

The intention is that this research thereby produces independent evidence of the practicability and value of the index. It should also determine the extent to its limitations and the need for supporting guidance, for example to ensure consistency. This would aid its subsequent promotion for use by large and medium sized organisations as well as investors, other financial players, including, for example, insurers.

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2. METHODOLOGY

In line with the aims of the research, two separate studies were carried out concurrently:

• Study 1: Testing the completion and use of the index by a number of large organisations; and

• Study 2: Investigate the value of the index to a number of key stakeholders.

2.1 STUDY 1

Study 1 consisted of three stages:

1. Identify and contact relevant organisations and named individuals as possible candidates to participate in the trial of the index;

2. Develop interview and questionnaire protocols; and 3. Interview all participants after completion of the index.

Each of these stages is described in detail below, but the overall research process involved in study 1 is illustrated in Figure 1. This figure details how new organisations were approached and how those already registered with CHaSPI were included in the process.

Figure 1 Study 1 research process

END

Reminder

Complete

Already Completed?

Online Questionnaire

NO

YES

Send initial letters of introduction

Email letters of introduction

Telephone to discuss

Telephone to get initial agreement

A: Unregistered with no contacts

B: Unregistered with contact

C: Already registered

Register Email asking to participate in

validation

Interview

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2.1.1 Managing registration

Loughborough University agreed to take over the registration process for CHaSPI. Two contact points were established through a dedicated telephone line and a CHaSPI email address. These were set up to handle correspondence and enquiries concerning the validation process. A number of changes were also made to the information concerning the validation process on the CHASPI website. The registration process was handed over to Loughborough on 21 May 2004. 2.1.2 Identifying participants

The aim of stage one was to identify relevant organisations willing to participate in the research. It was agreed with HSE that specific sectors would be targeted for the research. In the case of private organisations these reflect sectors likely to be driven by Corporate Social Responsibility. This included both for profit organisations and public sector bodies. The target sample is listed in table 1 by sector.

Table 1: Target organisational sample Type of Organisation Numbers

For Profit Organisations:

1. Construction/civil engineering 10

2. Chemical manufacture 10

3. Utilities 10

4. Insurance and banking 10

5. Food processing 10

6. General manufacture 10

7. Retail 10

Public Sector Bodies:

8. Local Authorities 6

9. Central Government 6

10. Healthcare 6

11. Police/fire 6

12. Universities 6

A number of sources were consulted to obtain initial contact details for these organisations. These included:

Sectors 1-4: A number of organisations were identified by the HSE, these represented large public limited companies. These contacts were supplemented by those from the Centre for Hazard and Risk Management (CHaRM) network (training and consultancy) and other large companies listed on the London Stock Exchange.

Sectors 5-7: Contacts were gathered from the CHaRM network and those listed on the

London Stock Exchange.

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Sector 8: No contacts were required, since a number of local authorities had already registered.

Sector 9: A number of contacts were provided by the HSE Sectors 10-12: Contacts were made through the CHaRM network and through

Loughborough University Health and Safety Office. 2.1.3 Contacting organisations

Three strategies were adopted in contacting organisations (as shown in Figure 1), depending on the level of prior contact and their knowledge of the index:

1. For those organisations where there was no prior contact and who had not registered on the CHaSPI web site (marked as stream A in Figure 1), the Chief Executive (CE), or equivalent, of the organisation was sent a letter from the HSE by post. This letter was designed to introduce CHaSPI and the validation process and is shown in Appendix 1. In some instances the CE passed the information to the company health and safety manager to deal with. A significant amount of time elapsed between these stages in some cases.

2. For those organisations where there was prior contact through the CHaRM network but

who had not registered on the CHaSPI web site (marked as stream B in Figure 1), the most senior health and safety professional was contacted by telephone and then sent an introductory email (shown in Appendix 2) with the HSE letter (Appendix1) attached.

3. Organisations already registered on the CHaSPI website (marked as stream C in Figure

1) were encouraged to complete the index and take part in the validation exercise. Upon commencement of the validation process there were 63 registrations on the website. 14 of these were fictitious or test companies and one was a registration of an organisational subdivision. This left 43 actual registrations, five of which had completed the index. Those organisations that had not completed were sent the email shown in Appendix 3.

Table 2 illustrates the types of organisations contacted and the numbers of direct and indirect contacts that were made as a result of these initial activities. Follow-up contacts Some initial contacts with organisations proved slow in translating into registrations on the database and then completion of the index. Therefore, a number of follow-up actions were initiated:

1. Organisations, registered on the CHaSPI database for some time without completing the index, were contacted by telephone. A number of these organisations indicated that they would complete the index, although the process could take some time, with consultation at board level required.

2. Seven government departments that had indicated a willingness to participate were

emailed with initial details.

3. Health and safety professionals from a range of sectors that were initially contacted and sent the email letter (Appendix 2) and the letter from HSE (Appendix 1) were re-

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contacted by phone. Evidence from this follow-up suggested a limited positive response and large time lapse between initial agreement and registration on CHaSPI.

Table 2 Details of organisations contacted by sector

Sectors Who contacted Number of contacts

Construction/civil engineering CE plus Health and Safety 13

Utilities Health and Safety plus few CE 131

Insurance and banking CE 12

Chemical CE plus few Health and Safety 10

Food processing CE plus few Health and safety 15

General manufacture CE plus few Health and Safety 18

Retail Health and Safety 15

Local Authorities None -

Central Government Health and Safety 7

Healthcare Health and Safety 72

Police Health and Safety or Human Resources 10

Universities Health and Safety 7 1 plus members of Water UK 2 plus all Welsh Healthcare Trusts

Other contacts Insight Investment (part of the Halifax Bank of Scotland Group) agreed to send a letter to Chief Executives of the companies identified by HSE in sectors 1-4, encouraging their participation in the research. This letter (shown in Appendix 4) was also sent to other companies in sectors 1-4 in which they invest. 2.1.4 Developing protocols

In addition to the introductory letters and electronic communications described above, two protocols were designed to gather validation data as part of study 1:

1. An interview protocol for organisations completing or attempting to complete the index. The interview questions were based on discussions with the HSE and a number of stakeholders and are described in detail below. The final study 1 protocol is included in Appendix 5.

2. An online questionnaire was designed to obtain immediate feedback on completion of

the index (shown in Appendix 6). This feature was available online at the CHaSPI web site from 9 July 2004.

Study 1 Interview protocol The interview protocol was designed to gather data about the practical use of the index and its interface, its validity, and possible future developments of the index in use, and was developed in collaboration with the HSE. The protocol included general background information about the interviewee, 33 questions dealing with specific aspects of the index, and an opportunity to give any further information

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not covered by those items. Table 3 shows the items which correspond to the areas of enquiry in the validation exercise.

Table 3 Areas covered by the interview protocol Area of interest Number Items

Practical Use 18 1,2,3,4,5,6,7,8,9,10,11,14,17,20,21,22,32,33

Validity 6 12,13,15,16,24,25

Future Developments 9 18,19,23,26,27,28,29,30,31

Online Questionnaire The online questionnaire followed the quantitative questions used in the feedback from the original piloting (Marsden et al., 2004), with the addition of a specific question on the relative importance accorded to each of the numerical indices. The online questionnaire covered the areas of practicality and validity, while allowing respondents to make additional comments should they have wished to do so. 2.1.5 Interviewing participants

Following completion of the index, a semi-structured interview was carried out with the individual/s that were responsible for preparing the index. The interview protocol developed in stage 2 was piloted against a small sample of the population and amended only by including subsidiary questions where necessary. Interviews were conducted both face to face and via telephone, with the interview protocol sent to respondents in advance. For a variety of reasons, some organisations were not able to fully complete the index. Such organisations, which had completed the index for the most part, were still included in the potential interview sample. Additionally views were gathered from some organisations who had registered on the CHaSPI web-site but had either not completed most of the index, or not created an index, in order to gauge an appreciation of potential barriers to the use of CHaSPI.

2.2 STUDY 2

Study 2 also consisted of three phases, carried out at the same time as Study 1:

1. Identify and contact financial stakeholders to participate; 2. Develop interview protocol; and

3. Gather views from financial stakeholders.

2.2.1 Identify and contact financial stakeholders

The aim of this stage of the research was gain agreement from around 25 interested potential users of CHaSPI information to participate in focus groups or semi structured interviews. These stakeholders were drawn from the following categories:

• Investment for pension funds and life insurance

• Insurance and insurance brokers

• Trade associations

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Initial contacts were made through organisations and individuals who had participated in the pervious pilot research, with further contacts information being supplied by these and the HSE. A news item was also published in the May edition of the UK Social Investment Forum (UKSIF) Newsletter (see Appendix 7), this produced a small number of responses. 2.2.2 Developing protocols

Initial interviews were carried out with four potential users of CHaSPI information. These interviews assisted with the design of the interview protocol (shown in Appendix 8) and provided additional contact information. The stakeholder interview protocol, again developed in collaboration with the HSE, consisted of 20 questions which closely reflected those asked of potential completing organisations, with less emphasis on practical completion issues. 2.2.3 Interviewing stakeholders

The aim of this stage of the research was to gather views from financial stakeholders by organising up to five focus group interviews, to be held either in London or Loughborough. Although many contacted were willing to share their views, it was not possible to organise focus groups due to scheduling difficulties. The focus groups were replaced by face-to-face interviews or, in a number of cases, participants requested a telephone interview. In both cases the interview protocol was sent to respondents in advance, so that participants could spend time before the interview familiarising themselves with CHaSPI.

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3. RESULTS

The results of each study are presented separately with common themes and conclusions drawn together in the final sections of this report.

3.1 STUDY 1 – ORGANISATIONS COMPLETING CHASPI

The results from the two protocols, interview and electronic feedback are presented together in this section and in the broad categories described in Table 3, namely practicality, validity and future development. 3.1.1 Sample

The results of this study are based on 57 organisations who have given detailed feedback to on their experience of CHaSPI. 14 of these companies had completed the online questionnaire in addition to giving interview feedback. The breakdown of organisations by sector is shown in Table 4

Table 4 Participating organisations by sector Type of Organisation Numbers

For Profit Organisations:

Construction/civil engineering 10

Chemical manufacture 2

Utilities 4

Insurance and banking 9

Food processing 3

General manufacture 5

Retail 2

Property/facilities management 2

Transport 1

Public Sector Bodies:

Local Authorities 5

Central Government 3

Healthcare 1

Police/fire 3

Universities/colleges 6

In addition to detailed feedback on the experience of CHaSPI, 5 organisations that were not able to start or complete the majority of the index gave some feedback on the barriers to their participation, which is also presented here. Three organisations have completed the index but have been unable to give feedback.

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3.1.2 Practical use of CHaSPI

The majority of the questions posed to completers of the index focused on the practical issues of using CHaSPI. While these items concentrate on usability concerns they also touch on issues of face and content validity. Decision to complete (Questions 1, 2 & 5) Initial questions concerned the practical issues associated with completing CHaSPI. When asked about making the decision to complete the index none of the respondents reported major concerns or difficulties in gaining agreement to proceed, although 4 interviewees noted that concerns might increase if the index were not in its piloting stage and results were made public. For the majority of organisations (35) the decision to participate in the validation exercise had been made either at board level or equivalent, or in consultation with senior management, often as a result of the introductory letters described in section 2. The remainder of respondents made the decision themselves as senior health and safety specialists, with 6 of these informing other senior managers of their decision. Ten of the responding organisations had not been able to fully complete CHaSPI at the time of the interview, with 5 noting that they were not able to complete the sickness absence data because they did not collect, or had difficulty collecting, that information. Resources used to complete the index (Questions 6, 7, 8 &14) In terms of time taken to complete, or almost complete, the index, this ranged from 1 hour to 1 week depending on how much of the required information was readily available. The lowest completion times were reported by local authorities who had all the information to hand. On average respondents took 1 person day to complete the index, with a median of 4 hours and a mode of 6 hours, suggesting that for most organisations the index is manageable within one person day’s effort. These results are reflected in the responses to the online questionnaire where most respondents reported that the index took between half and one day to complete. Some respondents did note that they approached the index as a pilot exercise and may not have devoted too much time and effort to it. Twenty-one respondents reported that only they were involved in completing the index while the others noted consultation with a wide range of colleagues. The breakdown of these contacts is shown in table 5. The most consistent reason given, in 17 cases, for consulting others referred to the need to assess sickness absence.

Table 5 Those involved in completion Involvement No of respondents

Interviewee only 22

Staff within the health and safety function 6

Human resources 19

Facilities 4

Various departments (more than 2) 8

In terms of involving staff groups in the process, 7 organisations (predominately in the public sector) had discussed completing the index with relevant staff groups. Five organisations, across all sectors, reported that they would brief staff at the next opportunity and a further 5 said they would consult staff groups if the index were operating in the public domain.

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An issue clearly related to the resource need to complete the index was how often respondents felt the index should be reviewed and completed with updated data. The vast majority (34) suggested that updating CHaSPI annually was most appropriate, with 11 suggesting twice a year, and 6 stating that quarterly updates would be appropriate. Four respondents felt that the index could be completed every two or more years and one organisation said that they would not complete the index again. Most respondents felt that the task would be easier after the first completion, taking less time and resources to update. Data used to complete the index (Questions 3 &4) Thirty–five interviewees were able to complete the index based on data encompassing their entire operations. These included all of the public sector respondents and the smaller organisations. Nine organisations completed CHaSPI based on subsidiary or operating company data and the remaining 11 used only UK data. Several respondents highlighted the difficulty in combining information from different divisions or operating companies when the organisation was large and diversified, but failing to do so might result in results that did not truly reflect the organisation’s performance. This may be due, in part, to the more general difficulty in aligning diverse systems rather than a particular feature of CHaSPI. Conversely, a simple aggregation may be no better at reflecting performance dominated by one particular business function. The vast majority of responding organisations (39) had little or no overseas operations which could be included in their index input. Of the remaining organisations, 3 felt that incorporating overseas operations would be relatively easy, 10 thought that it would be possible, but difficult and 4 that it would be impossible because of differing standards. One respondent felt strongly that the issue of level of reporting needed stronger clarification and recommended that CHaSPI is completed for UK operating companies only, in order to facilitate benchmarking. Ease of completion (Questions 9, 10 & 11) Overall the index would seem to be relatively easy to use. Only 16 interviewees reported the need to contact the CHaSPI helpdesks when completing the index. In 10 of these cases the contact was to iron out a technical issue (for example passwords) and the remaining 6 to seek clarification of definitions, and meanings. This was reflected by responses to the online questionnaire where only five respondents felt that the index was not practical to complete. When questioned about the level of online support, most interviewees (32) reported that the definitions and explanations were adequate and detailed enough to help them complete the index. The remaining 25 respondents cited a number of improvements to the online resources which they felt would facilitate completing the index. These are shown in table 6. The most common suggestion related to providing broader definitions of some terms, for example ‘board’ and ‘site’ that could be interpreted by all types of organisation using the index. For example public sector organisations had problems interpreting ‘board’, and construction companies pointed out that ‘site’ has a particular meaning for them.

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Table 6 Improvements in online resources

Improvement No of respondents

Broader definitions for non-standard organisations

6

More examples in general 5

Clarify major incident categories 5

Make the definition of ‘some’ more obvious 4

Better definition of ‘under watch’ events 3

Better definition of ‘highly regulated activity’ 2

Twenty-one interviewees noted that they had not found any sections particularly difficult to answer. The remaining 36 respondents noted problems with some or all of the sections of the index. The number of times problems associated with each section was noted is shown in table 7. When the indicators are considered individually, only a few participants had problems with each, however the majority of respondents had some sort of problem with the index when considered in its entirety. .

Table 7 Problem sections Section No of respondents

1. Health and safety management 5

2. Injury rates 10

3. Sickness absence rating 10

4. Occupational health rating 2

5. Major incident rating 17

6. ‘Under watch’ flag 11

8. Director’s declaration 6

Comments relating to sections 1 and 4 focussed on particular problem items, a summary of which is shown in Appendix 9. By far the largest problem with sections 2 and 3 was the difficulty in collating injury and absence rates, particularly for contractors. The most problematic part of the index was, however, section 5, where many respondents could not see its relevance to their operations. For some more clarification of the categories is needed, while others felt that this section might ‘penalise’ those organisations that has an efficient near miss reporting system. Problems with section 6 related to familiarity with the terms used (as suggested in response to question 10), as was the case with section 8 where two respondents felt that some sort of model statement would have been useful. Verification of the CHaSPI score (Question 17) The participants were asked if independent verification of CHaSPI was necessary. A range of views were expressed by participants from all sectors, although the majority of respondents felt independent verification was important (see table 8). Credibility and integrity were identified as the main reasons for carrying out verification.

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Table 8 Independent verification

Is independent verification necessary? No. of responses

Yes 41

No 14

Not sure 1

Five participants suggested that verification should be voluntary – in line with the philosophy of self regulation, whilst two participants felt that it could lead to the development of league tables which can create pressure. Three respondents felt that internal checks or the audit of the existing health and safety management system would be sufficient. Some expressed the view that this feature should only be added once CHaSPI is well established. Finally some viewed verification as unrealistic as many of the questions are subjective. The participants were asked to identify potential organisations that would be competent to carry out the verification process. A number of suggestions were made although no particular organisation was consistently identified. Organisations included: H&S Consultants (5) BSI ROSPA (3) UK Accreditation Service HSE (3) PKMG BSC (2) OFFWAT IOSH (2) NHBC Lloyd’s register PHLS The suggestion was made by participations from education and local and central government that organisations within their sector could verify each other. A view was expressed that to ensure consistency the verification should be carried out by one organisation. Benefits of participating in CHaSPI (Questions 20, 21 & 22) The participants were asked to identify any potential external or internal benefits from participating in CHaSPI. The majority of participants identified a range of benefits both external and internal. The results are presented in tables 9 and 10

Table 9 External benefits Benefit No. of responses

Demonstrating commitment to stakeholders – including public, customers, investors, enforcers

25

Attracting investment 13

Aid to the tendering process 8

Dealings with the HSE 7

Influencing insurers 5

Aid recruitment 3

Demonstrating commitment to health and safety was identified by organisations from all sectors participating in the study. Demonstrating commitment was expressed in terms of transparency,

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public relations, demonstrating quality and enhancing the corporate image under the banner of corporate social responsibility. Attracting investment was only a concern of public limited companies. Seven participants identified that the information could be used by the HSE in their dealings with the organisation, the score being taken into account to either reduce the number of inspections or inform the inspection process. Recruitment was particularly identified by the Local Authority and central government sector. Five participants, mainly representing the private sector could not identify any external benefits from participating in CHaSPI. Most of the respondents (8) to the online questionnaire indicated that the benefits of completing the CHaSPI outweighed the time taken to compete. Also only two respondents felt that the index would definitely not be useful to institutional investors

Table 10 Internal benefits Benefit No. of responses

Benchmarking with other organisations 35

Providing information/increasing awareness of senior management 20

Aid to health and safety improvement 18

Specific improvements identified 7

Establishes level of performance and aids continuous improvement 7

Provides opportunity for strategic reflection 6

Promote health and safety to employees 8

Demonstrates commitment to health and safety 5

Provides potential leverage (public sector) 5

Benchmarking within the organisation 5

Assists the health and safety professionals (public sector) 2

Benchmarking was described in the context of comparison and target setting and an opportunity identified by a wide range of participants from all sectors. A number of respondents from public sector organisations saw benchmarking as a potential tool for use as leverage in the allocation of funding. Providing information to the senior management team was identified particularly in the public sector organisations and frequently associated with increasing awareness of the senior management team. The fact that CHaSPI is offered by an external agency gives it extra credibility. Eighteen participants identified that CHaSPI has the potential to improve health and safety performance and as an extension to this was the view expressed by a number of private sector organisations that it provides the opportunity for strategic reflection which may ultimately lead to health and safety improvement. In addition seven participants indicated that they had identified specific areas that needed addressing as a result of carrying out CHaSPI. These activities included implementing stress risk assessments, addressing supply chain issues and aspects of health and safety debated at board level. These changes have been based on the assumption that CHaSPI has been developed by the HSE and represents best practice. Eight participants recognized an opportunity to use the results from CHaSPI in internal promotion, for example, internal newsletters and annual reports. This aids promotion of health and safety and demonstrates to employees the commitment of the organisation. Five

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respondents from the private sector were unable to identify any internal benefits arising from the completion of CHaSPI. Internal benefits were more difficult to identify for respondents to the online questionnaire, with only two feeling that the index would be useful in promoting health and safety. Participants were also asked if further resources could be provided by CHaSPI to assist with internal uses. Twenty five participants felt that additional resources were unnecessary whilst three participants suggested it was too early in the development of CHaSPI to make useful suggestions. However thirteen participants suggested that generic reports would be useful. These would include actions based on statements that had been assigned ‘some’ or ‘no’ and if possible priority attached to these. Many of the specific suggestions reflected general improvements that could be made to the index, mentioned in other sections. Four participants wanted to create CHaSPI entries for individual business units/subsiduaries. Other suggestions included automatic emails of changes/new entries to CHaSPI, and the ability to record previous entries when updates are added to the system. Using CHaSPI for real (Question 32) The participants were asked for their feelings on using the CHaSPI ‘live’ when the organisation name and associated indicator scores would be available on the web site. The responses are summarised by public and private sector and presented in table 11.

Table 11 Using the CHaSPI for real No. of Private organisations No. of Public organisations

No problem in participation 11 2

Participation unclear/unsure 8 15

Unable to participate 16 2

A number of explanatory comments were made, these are presented below: Participation unclear/unsure

• Would need board approval (frequently mentioned) • Need verification for potential impact • Still unconvinced of the benefits • Would not be a pioneer • Theoretically OK, but if score was poor… • Need to look more critically at CHaSPI • Need to provide the context of the result • Performance data needs to be meticulously defined and include trends

Unable to participate

• Unable to use in present format • Not proportionate to the risk of the work activity • Overwhelmed by detail • Potential for use in negative way • Validity questionable • Should be anonymous • Bureaucratic/non value added from excess inappropriate detail

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• Questionnaire far too long and detailed, many questions are open to interpretation and much more online guidance is needed

• Not until they have improved their health and safety management Separating public and private sector organisations (Question 33) The final element of practical use focused on the presentation of public and private sector scores. The participants were asked if the results for public and private sector organisations should be separated. Twenty-three participants from across all participating sectors felt that it would be unnecessary to separate the organisations. Some commented that it might be useful to compare across sectors and provide the opportunity to learn from others. Thirteen participants suggested that separating public and private organisations would be useful as they have different working environments, and as the number of entries on the index become large. Nine participants had no view on this topic. 3.1.3 Validity of CHaSPI

As well as issues of face validity covered in other parts of the interview protocol, a number of questions can be related directly to the validity of the index, including the range of issues covered, compatibility, and room for improvement. CHaSPI as a fair representation of health and safety (Questions 15 & 16) Twenty interviewees felt that the index did not provide a fair reflection of their current state of health and safety. Of the reasons given by more than one respondent, the most common was the feeling that the Major Injury Rating was irrelevant (8 respondents, at least 4 of whom had not mentioned this before). The only other issues mentioned more than once were also related to the calculation of the overall score, with 5 respondents feeling that sickness absence was not a fair reflection of health and safety management, and 3 feeling that occupational health management relative weighting should be increased. As a proportion, respondents to the online questionnaire were slightly less positive with 6 respondents feeling that the index was not a valid reflection of health and safety and 6 disagreeing that it covered an appropriate range of health and safety issues. Another part of the online questionnaire related to the representation of health and safety; respondents were asked to indicate what they thought would be the best way of combining the five indicator scores to produce an overall CHaSPI score. This question was extended to interviewees to gain a wider view. Forty-two respondents expressed an opinion on the weighting of the index, and the mean (to the closest half number), median and mode scores for each of the five sections is shown in table 12.

Table 12 Relative indicator weightings Central Tendency Indicator 1 Indicator 2 Indicator

3 Indicator 4

Indicator 5

Mean 4 2 1 2 1

Median 4 2 1 2 1

Mode 3 2 1 2 0

The general trends in table 12 suggest that the occupational health and injury rate indicators should be given more weight while management systems, sickness absence and major incident ratings should be given less overall. In some cases respondents felt that the occupational health

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indicator was part of the management system. Taking these together would result in a weighting similar to the existing calculation. In a further question asking if the index reflected the key aspects of health and safety in their organisations, only 18 respondents felt that it did not. Of these, 8 thought that there should be more emphasis on occupational health and 2 questioned why it was dealt with separately. Compatibility of CHaSPI (Questions 24 & 25) Organisations were asked if they followed a particular health and safety management system and whether they had found CHaSPI compatible with this. Twenty-eight organisations identified HSG65 as the model they followed or loosely followed. A further eight organisations used this in combination with other systems such as 8800, ILO, TQM and 18001. Ten organisations identified 18001 as the model they used. Three organisations did not follow a model. One organisation used QSA audit. Forty-one organisations felt that CHaSPI was compatible or broadly compatible or easy to adapt with the management system they use. Three organisations suggested that they are similar although CHaSPI places more emphasis on board involvement and is weighted towards management systems rather than practical health and safety. Only two organisations felt that CHaSPI was not compatible with the management system they use. Improvements to CHaSPI (Questions 12 &13) Respondents were asked if they felt the index could be improved both specifically in relation to their industry sector and in general terms. Twenty-two interviewees felt that improvements could be made to the CHaSPI to better reflect their industry. The most consistent issue mentioned, in 6 cases, was the apparent disproportionate focus on high risk industries. Three respondents felt there should be some room for noting proactive safety measures rather than injury rates, and two interviewees noted the FTSE/SIC categorisations were too broad for meaningful comparisons. This last point relates to more general comments from a number of participants, who mentioned difficulties with the classification systems (FTSE and SIC) used in the registration process. These do not always reflect organisations’ activities, for example, there is no suitable SIC for Local Authorities. There was a suggestion that the following codes be introduced County Council, District Council and Unitary Authority. Another possible solution may be to display organisation name and then activity. There was a request to be able to separate construction companies from housing, as the FTSE category puts these together. Three respondents did feel that changing the index to reflect different industries would make it too cumbersome. Responses to the question posed on general improvements covered issues ranging from content validity concerns to more technical improvements in the working of the index. Twenty-seven participants felt that improvements could be made to the index. The most common improvements (that is those mentioned by more than one respondent) are shown in table 13.

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Table 13 Improvements

Benefit No. of responses

The inclusion of a comments column to explain responses 6

Expansion of response scales beyond ‘Yes/Some/No’ 4

Include measures of continuous improvement 4

Weight the importance of indicators based on risk level 3

Less detailed, focus on outputs 2

Allow multiple input/indices 3

Allow interface with other software 2

3.1.4 Development of CHaSPI

The final broad section covered by the interview protocol related to future developments of the index, including the details of running the system. Providing the service (Questions 26, 27, 28 & 29) Participants were asked to consider what organisation(s) would be appropriate to make the CHaSPI website available. A summary of the responses are presented in table 14.

Table 14 Potential CHaSPI service providers Organisation No. of suggestions

HSE only 42

HSE in association with additional organisation 11

Professional / Industry body 2

A large proportion (42) felt that the HSE should be the sole service provider. The reasons identified for this included HSE reputation, credibility, transparency, independence, the need for continuity and in the spirit of self-regulation. Eleven participants also felt that the HSE had a key role to play for the reasons outlined, but that the service could be offered in collaboration with an additional organisation. Suggestions of suitable organisations included HELA, BSI, IOSH, BSC, CBI, DTI, accreditation organisation, academic body. However no particular organisation was mentioned consistently. Seven respondents specifically suggested that commercial organisations would not be appropriate. Three participants highlighted the difficulty of HSE providing a service if CHaSPI is used in an international arena, rather than within the United Kingdom. In which case, it was suggested that BITC might be a suitable organisation to host CHaSPI. Participants were also asked if health and safety performance for their organisation is reported in other reporting frameworks. Related to this, participant views were gathered on the possibility of incorporating CHaSPI in any of these frameworks, as a way of providing the index. These questions were particularly addressed to private organisations. Twenty-four participants indicated that their organisation did not report against any framework, the majority coming from the public sector and organisation that are not public limited companies. The frameworks identified are presented in table 15.

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Table 15 Other reporting frameworks

Framework No. of organisations reporting in it

Business in the Community (BITC and BIE) 11

FTSE for Good 6

Dow Jones 4

EIRIS 3

Responsible Care (chemical) 2

Water UK (water) 2

In large organisations CSR reporting is frequently the responsibility of a specialist department and so the health and safety professionals may not know the details. BITC appears to be the framework most widely used in the participating organisations. Other reporting mechanisms mentioned included ECO Campus (environmental), All Builder Average (NHBC), London CSR Group, CBI Contour, Airport Operators Association Accident Benchmarking Scheme, CSR Reports, Local benchmarking. These examples may be industry or location specific. Many respondents had little or no experience of other reporting frameworks and so were unable to comment on the possible inclusion of CHaSPI in an existing framework. However fourteen organisations felt it was not worth incorporating CHaSPI in an existing framework. Reasons given for this included:

• CHaSPI is more in-depth

• They serve different purposes

• There are practical difficulties Four participants felt that incorporation could be long-term aim, but this was not possible at present. It was suggested that Water UK could be incorporated into CHaSPI. A view came from the chemical sector that Responsible Care already covers information obtained by CHaSPI. Another view was expressed that CHaSPI could be incorporated into BITC if the health and safety option was made mandatory. Finally it was highlighted that the London Stock Exchange has identified the need to rationalise the number reporting frameworks and there maybe an opportunity for the incorporation of CHaSPI into the system that is developed. Paying for the CHaSPI service (Questions 18, 19, 30 & 31) The respondents were asked if a fee should be charged for CHaSPI and if so, who would pay the fee. Twenty-nine thought that fees would not be appropriate. Several participants felt that CHaSPI should be viewed by the HSE as a tool for improving health and safety standards and part of the drive for self-regulation. Four participants felt that the benefits of completing CHaSPI need to be more clearly identified before a fee is justified. Four participants from the public sector felt a fee would be a disincentive. Thirteen participants agreed that fees could be charged. However ten of these suggested that it should be the users of the information that should pay rather than those input the data. The fee could take the form of a small fee or an annual subscription based on size of organisation. A small number felt that they would be willing to pay a fee. One participant suggested it would

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only pay a fee if it were made a legal requirement or there were large numbers of competitors on CHaSPI. As an additional question, participants were asked if they would be encouraged to use CHaSPI if it was run with free registration for a period. Twenty-eight felt this would be beneficial or helpful until CHaSPI is well established and the benefits have been clearly identified. However eleven felt that this was not the case, the inference being that it should be free all the time or they would not be using it in any case. Several participants did not comment. The participants were also asked if they would be willing to pay a fee for verification. The responses are illustrated in table 16.

Table 16 Paying for verification Would you be willing to pay a fee for verification? No. of responses

Yes 21

No 16

Depends 6

Nearly half of those responding indicated that they would be willing to pay a fee. Respondents were asked to put a monetary value on this. Amounts identified ranged from ‘a few hundred pounds’ (6) to around £500 (6) to values of up to £12000. These amounts were a reflection of the size and type of organisation. The participants who identified ‘depends’ felt that they either need to be convinced of the economic benefits of completing CHaSPI or be required by legislation. A number of participants (3) expressed the view that a fee would be a disincentive. A few organisations suggested that verification could be included in any overall service charge for participation in the index. Responses regarding the potential frequency of verification are summarised in table 17.

Table 17 Frequency of verification Frequency No. of responses

Annual 16

2-3 years 7

3-5 years 8

Random sample 9

Sixteen respondents thought that verification should take place annually in line with updates of CHaSPI, whilst others recognised the potentially onerous nature of the exercise and suggested less frequent updates. A random approach to verification by the body responsible for the running of the index was also suggested as a way of keeping down costs.

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Incentives for completing CHaSPI (Question 23) Participants were asked to identify any incentives that could be utilised to encourage organisations to complete CHaSPI. A number of suggestions were made that are presented in table 18. A key incentive suggested is seeing other organisations, in particular competitors, already participating in CHaSPI. This may be difficult to take forward in practice. Of a more practical nature were the suggestions for more active promotion of CHaSPI by the HSE, as a number of participants felt the publicity about it had been poor. Suggestions were made about what the promotional material should cover, this could include the uses and benefits of participating in CHaSPI, but also the potential disadvantages of non participation e.g. not getting on tender lists. Ten participants proposed award or badging schemes typically based on top score or most improvement. These awards could be allocated on a sector basis. Investors in People (IIP) was suggested as a model for a badging scheme. A number of participants felt that stakeholders could exert pressure on organisations to encourage participation. Stakeholders identified included investors, insurers, regulators, Government Setting an Example and trade associations. One participant identified that if CHASPI were part of a framework such as Business in the Community (BITC) then being part of a member organisation would bring with it a number of benefits that could be used as incentives. Seven participants did not feel any incentives were necessary.

Table 18 Incentives to complete Incentives No. making the

suggestion

Seeing others/competitors on CHaSPI 13

More promotion from the HSE. To include • Examples of best practice • Uses and benefits of CHaSPI • Visits to groups (e.g. banking) • Direct communication from Commission Chair

12 3 4 1 1

Introduction of award/badging scheme 10

Stakeholder pressure 6

Reduced inspection regimes 5

Reduce insurance premium 4

Marketing opportunity for organisation 2

Made a legal requirement 2

Make CHaSPI anonymous 1

3.1.5 Final comments

The participants were given the opportunity for any final comments about CHASPI and the validation exercise. Twenty-nine participants had no further comments. Three participants requested being kept up to date on the validation exercise. Individual comments are presented below in table 19.

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Table 19 Final comments by sector

Sector Comments Education

• A good step in the right direction • A good idea and a sound alternative for gauging their performance • Will be useful to benchmark across the sector • The best way to complete CHaSPI would be to utilise others within the

organisation. It would take a considerable amount of time Construction

• Very pleased with it • Make international operations optional – if answering globally default to

OSHA stats. Should have the ability to say if information is not available rather than entering 0.

• Good to have a credible endorsed index actively promoted by the HSE. They need to be more active in getting organisations to participate.

Police

• Using CHaSPI made us think about health and safety and reviewed ideas about benchmarking

• A briefing prior to completion would have been helpful Local and Central Government

• Very happy with it • It is a valuable tool • Discussing CHaSPI at next LA network meeting • The website CHAS (contractors health and safety scheme) could cause

confusion General manufacturing

• A good idea. Large scale use should be encouraged • It contributes to yet more questionnaire fatigue. Many questions are not

relevant and do not reflect how a board of a global business operate. It should be more focused on performance outcomes not underlying systems.

• Score will give delusion that all is OK. Not a lean/smart approach Banks and insurance

• Despite their reservations they are strongly supportive of CHaSPI if it can be made more appropriate to their sector

• Great idea but it needs to reflect the level of risk of the organisation • ‘very useful and timely. The questions are relevant and cover a wide range

not concentrating simply on accident data’. • Loughborough team very helpful

Miscellaneous • A good initiative which should be further developed 3.1.6 Feedback from organisations unable to complete the index

A number of organisations, who were approached to complete the index using the steps outlined in section 2, provided some initial feedback either during the contact conversation or following a view of the website. The comments provided are presented below.

• The level of complexity is inappropriate to the risk profile of the industry sector

• US owned company that has developed its own indicator. Business Units have to complete this for internal purposes. There would be no benefit gained in completing CHaSPI

• The company is already participating in number of benchmarking exercises and feels

there is some degree of confusion and duplication. In addition it would not add anything to health and safety performance

• The company has recently undertaken a large project in relation to the CBI Contour

Programme and did not feel able to spend more resource on similar activities.

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• The company is going through restructuring and is not able to participate in such activities.

Feedback was also received from two other sources. IOSH Retail Specialist Group found a number of difficulties when using a paper version of the system. These include the following. There appears to be no way of splitting a business into different risk areas, a large number of issues do not apply and it is not clear how the system weights the scoring if a number of areas are not relevant. The split between an organisations’ arrangement for policy, operational policy and arrangements for implementation are not easily accommodated. The research report Scoping Survey of Local Authority’s (LAs) Role as exemplars of Corporate Health and Safety Assessment Practices and Performance (HSL, 2004) gathered views on the value of CHaSPI within the LA sector. A sample of seven LAs responded to a questionnaire with comments about CHaSPI. Whilst its strength in enabling between organisational benchmarking was recognised, greater weight was attached to any ability it had in exposing intra LA discrepancies in health and safety management standards. A global performance indicator did not automatically reflect performance of all contributing services. Against these criteria, services outstripping others in terms of risk control would be systematically disadvantaged through merging of their outcomes with poorer performing counter parts. The CHaSPI’s length, requirement for less than accessible information and ability to fully capture diversity was questioned. Absence of a specific risk or quality gauge from CHaSPI was also noted.

3.2 STUDY 2 - STAKEHOLDERS 3.2.1 Sample size

Twenty-five organisations provided feedback as potential users of CHaSPI or as key stakeholders in the health and safety system. The organisations interviewed are presented in table 20 and represent views of the employers and the Trade Union movement, trade associations, insurance and insurance brokers and fund managers and investment research organisations. The main criteria used to select investment organisations was membership of UKSIF which means the organisations are to a greater or lesser extent used to including CSR in their investment decisions.

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Table 20 Participating stakeholder organisations Category of stakeholder Organisation name

Institutional investors/fund management Aberdeen Asset Management Co-operative Insurance Society Gerrard Henderson Global Investors Hermes Investment Management Ltd Insight Investment Management Ltd Jupiter Asset Management LU Business School (ex fund manager) Morley Fund Management Rathbones Greenbank Investments RCM (UK) Ltd Schroder Investment Management SG Asset Management Standard Life Assurance Company Universities Superannuation Scheme Investment Research/Advice Innovest Strategic Value Advisors PIRC Ltd Insurance/brokerage QBE Insurance Wilkinson-Rodgers Insurance Brokers Trade Associations Association of British Insurers Chemical Industries Association Institute of Risk Management UKSIF Employer/Employee bodies Institute of Directors Trade Union Congress

3.2.2 Practical use of CHaSPI

Most of the questions posed to potential users of the index focused on the practical issues of using CHaSPI. While these items concentrate on usability concerns they also touch on issues of face and content validity. Completing CHaSPI at group level Participants were asked if, to aid their decision making, CHaSPI scores needed to reflect global operations of UK listed companies and failing that if operating company data would be of any value. These questions were pertinent to fund managers, research organisations and insurers (19 in total). Fourteen participants expressed the view that it would be important to have CHaSPI completed at the Group level. Justification for this included the following points:

• The investment decision is made at a global level. • The UK is well regulated but this might not be the case in other countries • Stakeholders are often concerned about the management of SRI issues in the 3rd world

rather than the UK • Control becomes more difficult the further from the centre e.g. managing contractors • It should be possible as it is achieved for other aspects of a business e.g. financial

performance Two participants recognised that it could lead to averaging out across operations of different size and risk profiles. This could make the score less meaningful, but it could lead to further

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disclosure by way of explanation. UK level is acceptable for insurance and one investment organisation and the Chemical Industries Association. So it may depend of the type of investment being undertaken. Twelve participants felt that level if group level data was not available CHasPI information for (UK) operating company only would be of very limited value to aid their investment decision making. Although some acknowledged that it would be better than nothing. Two participants suggested that the value would depend on how much of the operation is overseas. The important point would be to obtain a view of the majority of organisations operations. Three participants felt that completing CHaSPI at the operating level would provide a more transparent view of an organisation and there would be opportunity to benchmark within an organisation. Verification of the CHaSPI score Potential users were asked if independent verification of CHaSPI was necessary. Twenty participants felt that some form of verification should take place. A number of comments were made about verification.

• It should be introduced once CHaSPI is established with a good reputation (4) • It should be voluntary as it could discourage some organisations from completing

CHaSPI. (3) • It could be based on type and size of organisation (2) • Not too rigorous/could be partial (3) • Working with a certified management system could be part of the verification • An alternative would be to ask companies to disclose what proportion of the business

has been included and to place some level of reliability on the results. Two participants felt that verification would be unnecessary because it would be very costly and not feasible. They would rely on companies not lying as their reputation would be at stake. The participants were asked to identify potential organisations that would be competent to carry out the verification process. A number of suggestions were made although no particular organisation was consistently identified.

• HSE (3) • Responsible Care • BSC • Accountancy firms • The CHaSPI service provider, as a source of income • Internal • HSE to develop an approved list

Frequency of use Participants were asked for their views on how frequently CHaSPI should be updated. Fifteen suggested that it should be updated annually. This would be inline with the frequency of their review (2). In addition four participants suggested additional updates could take place based on material change. Respondents were also asked how frequently they thought the verification should be updated. Most interviewees thought that verification should take place annually (6), 2 indicated it should take place ever 2 to 3 years, and 5 suggested a random sampling of organisations to be verified as part of the system in use.

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Benefits of participating in CHaSPI The participants were asked to identify any potential external or internal benefits for the organisation participating in CHaSPI. The majority of participants identified a range of benefits both external and internal. The results are presented in tables 21 and 22 Demonstrating commitment is linked to enhancing the reputation of an organisation. A view was expressed that it might reach the stage where non-participation would raise questions. Although one difficulty highlighted is potential self-selection such that only the good performers are willing to participate. For stakeholders there is a need to ensure that investors in particular are convinced of the validity of CHaSPI data.

Table 21 External Benefits Benefit No. of responses

Improves reputation and demonstrates commitment to stakeholders 9

Gives stakeholders a view of performance 7

Illustrates transparency 4

Universal approach 2

Influencing insurers 2

Gaining contracts 1

Similar to the views expressed by participants from organisations completing CHaSPI benchmarking within a sector was identified as a key potential benefit, along with health and safety improvement. The potential financial benefits were identified although it was suggested that there is as yet no evidence for such business impact. Two participants thought that the need to complete other health and safety questionnaires could be reduced as interested parties could simply be referred to CHaSPI data.

Table 22 Internal Benefits Benefit No. of responses

Benchmarking with other organisations 11

Aid to health and safety improvement 10

Internal PR confirming corporate values 4

Provides potential leverage for funding 2

Refer other interested parties to CHaSPI 2

Potential financial benefits 2

Use in training and company information 2

Part of KPIs and other targets 1

Benchmarking within the organisation 1

Reduce involvement of HSE 1

Results from public organisations

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The participants were asked if they would find the information concerning public organisations, as opposed to private organisations, of any value. This question was addressed particularly to the fund managers, research organisations and insurance representatives. The majority of respondents from the investment community indicated that the information would be of no direct value to their work. Two organisations felt that it might be useful to compare with others, in the case of, for example, private public partnerships. 3.2.3 Validity of CHaSPI

As with organisations completing the index, potential users were asked a number of questions related directly to the validity of the index. CHaSPI as a fair representation of health and safety The respondents were asked if they felt that the results from CHaSPI provide a fair representation of an organisations health and safety performance. The respondents had a diverse range of views on this question which are summarised in the following points:

• Reasonable balance- It is good to combine management practice with performance measures. These areas work well in the context of a questionnaire approach (4).

• Headline performance is more important - Incidents and events are a reflection of the

management system. There could be good management systems in place but they are not implemented. Therefore more weighting should be given to performance. This also reflects the shareholder perception of what is important. Information on occupational health performance is very limited. Additional indicators such as claims, grievances and productivity impact could be included. This additional information would give organisations greater latitude in demonstrating performance and provide more information to the stock market (7).

• Major incident rating - Major incident rating is very limited and sector specific. It could

be removed and supplied as supplementary information where appropriate, or added to accident/incident data or restructured as the categories are too catastrophic and subjective. The investment community would already be aware of major events in companies they engage with (6)

• Not proportionate to the risk profiles of organisations - CHaSPI should be sector

specific, it is not comparing like with like in terms of risk. Some aspects are inappropriate for low risk organisations. There could be weighting by sector e.g. The Gradient Index run by Accountability allows the end user to manipulate the data e.g. introduce a risk rating by sector? (4)

• Complexity - The management questions are very detailed - too complicated. It is a

matter of balancing benefits against time and effort required to complete (3).

• Remuneration/competence - There should be a question/s about health and safety performance, Key Performance Indicators and remuneration particularly of the senior managers/directors of health and safety. This would help to establish that there is an effective health and safety management system (3) One respondent was particularly interested in organisations being able to demonstrate competence of senior health and safety managers/ directors.

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• Question validity- The questions are based on value judgments, which are open to interpretation and therefore not reliable (2). The equal weighting of all the questions is inappropriate – as some questions are more significant than others (2).

• Presupposed business model - The questions on health and safety management

presuppose a business model for structure and management of an organisation. An organisation might be operating well outside this model, for example, multi-sited organisations with a diverse range of activities. The questions are skewed to fit in with this model. It might be more appropriate to ask overarching questions (see remuneration), rather than details of how they got there (2).

• Other comments - CHaSPI is reactive rather than proactive, there should be more

emphasis on prevention. It is very similar to Responsible Care. As an additional question, potential users were asked to indicate what they thought would be the best way of combining the five indicator scores to produce an overall CHaSPI score, as had been done with organisations completing the index. Ten respondents expressed an opinion on the weighting of the index, and the mean (to one decimal place), median and mode scores for each of the five sections are shown in table 23.

Table 23 Relative indicator weightings

Central Tendency Indicator 1 Indicator 2 Indicator 3

Indicator 4

Indicator 5

Mean 3.7 2 1.5 2 0.8

Median 3.5 2 1.5 2 1

Mode 5 2 1 1.5 0

The general trends in table 23, like those in table 12 above, suggest that the occupational health and injury rate indicators should be given more weight while major incident and management ratings should be given less overall. Participants were also asked for their views on the balance between the safety content and occupational ill- health content of CHaSPI. Many participants did not feel in a position to comment on this topic, however six felt that balance is appropriate as proactive management is addressed in both areas. A number of further views were expressed that are summarised below:

• There is a bias towards stress and MSD which could be an issue • There is a bias towards safety, which would be addressed by inclusion of additional

occupational ill health indicators (see headline performance) • Sickness absence is particularly good as it reflects the well- being and morale of an

organisation (2) • Sickness absence is not a good measure of occupational ill health • Still inappropriate for low risk sectors (2) • Could include something on the management of social diseases e.g. TB, AIDS –

important in the 3rd world. • Management of ill-health is an aspect of health and safety management • Could include more on consultation with employees

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Providing useful information The participants were asked how they would use the information available on the CHaSPI site and if further additional information would be useful. A summary of uses is presented in table 24. A number of respondents suggested that they would use CHaSPI for benchmarking within a sector. This will only be effective if large numbers of organisations from across a sector complete CHaSPI rather than the market leaders only. The benchmarking would be based on the overall score and the sub-indicators and the users would be looking for scores that stand out. The comparative reporting tool is useful for this and visually impressive. However, if all scores are high then it would be not particularly meaningful. One participant was intrigued that an aerospace organisation had achieved a score of 8.8 and a construction company a score of 6.5 (would have expected them to be lower). Three participants felt that value of the actual scores is questionable and should not obscure the fundamental aspect of the index.

Table 24 Information uses

Uses No. suggesting this use

Benchmarking/comparison 12

Basis for engagement or dialogue with a organisation 10

One of the many tools used to aid the investment decision 4

Present potential risks to shareholders 2

Sharpen issues that need to be addressed 1

Potentially saves time 1

Build into an overall CSR profile of an organisation 1

Compare with internal matrix to check for correlation 1

In negotiation with insurance companies 1

The benchmarking and comparison would lead to engagement or dialogue with an organisation on CSR and risk management issues. But also would have to be followed up by further research (4). Three respondents commented that CHaSPI would be useful because of the universal approach taken (3). Improvements Additional information suggested by the investors and stakeholders can be summarised as follows:

• Information on prosecutions • It is very difficult to go on scores only. Users would like to see more specific

information such as answers to the questions! (2) • If not answers to all the questions, some of the key management questions and KPIs

could be drawn out and presented in a manner similar to the Directors Declaration. • More information about significant health and safety risks in an organisation would be

useful. Then the fund managers would know where to target further research. • Trend information would be useful to provide a history of scores over say, 3-5 years (2) • Sector specific reports that identify where the true risks lie (2)

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• The entries need to clearly identify what part of an organisation is included – the group or particular geographical areas/business units –not the case at present (3)

Other benchmarks Participants were asked if they use any other existing frameworks to help assess company health and safety performance, what were the advantages/disadvantages of these frameworks compared with CHaSPI and if it would worth incorporating CHaSPI into one of these existing frameworks. A number of reporting frameworks were mentioned. These included:

• Business in the Community (BITC and BIE) (5) • EIRIS (4) • Dow Jones (3) • FTSE for Good (2) • Global Reporting Initiative • Responsible Care

Other sources of obtaining health and safety information included CSR reports, HSE prosecutions databases, public disclosures, press searches. A number of participants (8) identified that they do not use any reporting frameworks, but use alternative sources of information, rating agencies, external analysts, research organisations and by talking to other investors and the companies themselves. Some organisations create their own rating using a matrix based on information gathered from the sources described above. Health and safety would be part of a range of SRI issues. In the insurance sector companies may be asked to complete a questionnaire supported by documentary evidence and inspections. Those participants who use other frameworks or have knowledge of them all identified that the key difference between CHaSPI and other reporting mechanisms is the level of detail. CHaSPI is very detailed and specific to health and safety, whilst the majority of other frameworks are ‘more superficial’ and cover a number of issues relevant to CSR. Completion of the health and safety component may be optional. It is not clear whether this is an advantage or a disadvantage. It was considered that CHaSPI is too specific to stand alone, but it was beneficial to have detailed health and safety information in one source and format. It would be even better if it were verified. As a general point all frameworks suffer from the problem of being based on self completed questionnaires, with little verification and so reliability is an issue with them all. Views were very mixed about the possible integration of CHaSPI into an existing framework. It was identified by some as potentially useful to ensure consistency. BITC was suggested as a possible choice (3), although there are only 140 companies on BITC at present. GRI was also suggested as a possibility, however this is global and might not be appropriate for UK only organisations (2). Others expressed the view that integration was not necessary. Also it would be difficult to achieve because frameworks are designed for specific audiences and they would want to maintain their independence. The initiative by the London Stock Market was mentioned as a possible solution. 3.2.4 Development of CHaSPI

The final area where views where gathered from stakeholders related to future developments of CHaSPI. Providing the service

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Participants were asked to consider what organisation/s would be appropriate to make the CHaSPI website available. Some participants had no strong views on this topic. A summary of those responding is presented in table 25.

Table 25 Service provider Organisation No. suggesting

HSE only 15

HSE in association 2

Independent body 1

Fifteen participants felt that the HSE should be the sole service provider. The reasons identified for this included reputation, independence, being neutral and setting the standard. The model already exists in the HSE, for example HSE Books. Two participants also felt that the HSE had a key role to play for the reasons outlined, but that the service could be offered in collaboration with an additional organisation. BITC was mentioned as a possibility to reduce questionnaire overload. A research based organisation such as Trucost was also suggested as an alternative. One respondent felt that HSE is too UK focused and CHaSPI should be run by an international organisation such as Global Compact. Paying for CHaSPI Interviewees were asked if a fee should be charged for CHaSPI and if so, who would pay the fee. Eight participants felt that fees were inappropriate altogether. They would act as a disincentive and organisations would not be willing to pay a fee until the benefits have been more clearly identified. Seven participants indicated that their organisations would not be willing to pay. Reasons for this included:

• Health and safety is not critically important:, • The information is readily available from other sources: and • CHaSPI would only become useful when there are a significant number of entries.

Six participants indicated fees would be appropriate, although only four suggested that this should be based on usage. It could be run on a subscription basis of minimal amount (£200-300 per year was suggested). Two participants suggested advertising as a source of income. The participants were also asked if a fee should be charged for the verification service. A number of participants felt a fee would have to be charged, although it would be better if this did not occur until CHaSPI is well established with a good reputation. Very few participants had views on the amount and suggested it could be inline with amounts typically paid for other health and safety audits. Incentives for completing CHaSPI Participants were asked to identify any incentives that could be utilised to encourage organisations to complete CHaSPI. A number of suggestions were made that are presented in table 26.

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Table 26 Incentives to use the CHaSPI

Incentive No. suggesting

Less frequent inspections by enforcing authority 5

Being left out when critical mass achieved 4

More evidence of the benefits 3

Awards 3

Compliance required 3

Name and shame 2

Lower insurance premiums 1

Linked to advice to resolve deficiencies 1

It was noted that if less frequent inspections were a possible incentive it would be important that scores would have to be externally verified. Suggestions for more evidence of benefits include potential business impact and the improvement of stakeholder perceptions about the organisation’s health and safety performance. A possible improvement that may be an incentive to participation is the provision of access to expert advice and information that would help an organisation address any issues that the index had highlighted. Barriers to participation in CHaSPI The participants were asked to identify potential barriers that might prevent an organisation from completing CHaSPI. The responses are summarised in table 27.

Table 27 Barriers to participation Barrier No. suggesting

Poor performance 9

Poor score leading to bad publicity/ hassle 4

Time and resource to complete 4

Over exposure to similar indices 2

Good performers discouraging others 2

Score does not truly reflect performance 2

Newly established 1

Poor health and safety performance was identified as the key barrier to participation and association with this in any bad publicity that might result from a low score. This could ultimately lead to engagement with investors. The resource needed to complete the CHaSPI was considered a barrier. This might be a strong disincentive if there are no perceived benefits. If a score may not truly reflect the performance of an organisation, for example one with a diverse range of activities, this would also act as a disincentive. Encouraging organisations to complete CHaSPI

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The participants were asked if they would encourage organisations they deal with to register and create a CHaSPI entry. Five organisations indicated they would be willing to do this. The following comments were made:

• As a way to improve health and safety performance. This could also include insurance brokers as they often act on behalf of companies (3)

• Probably to smaller or younger companies (‘Small Cap’ companies) • A letter of encouragement has already been sent

Two organisations indicated that it might be possible. The following comments were made:

• Might suggest it to particular organisations • Could possibly write a letter of support

Eight organisations indicated that it would be unlikely. The following reasons were identified:

• Would like to first get a better idea of how burdensome it would be and not convinced that it is a valid reflection of health and safety performance

• Health and safety is not a key issue (2) • Only if it had reached a stage where it had an effect – I.e. many companies participating

(2) • Might suggest an organisation look at CHaSPI to highlight issues, but would be loath to

ask them to complete because of the effort involved 3.2.5 Final comments

The participants were given the opportunity for any final comments about CHaSPI and the validation exercise. The majority of respondents had no additional comments. However the following points were made:

• CHaSPI is too complicated at present – it would take too long to complete. It would be better to have a simple system that evolves.

• Resticting CHaSPI to UK operation would be very limiting • Companies are required to disclose more and more which creates problems • The Operating Financial Review may have some impact. Although reporting on health

and safety is not mandatory, it is required if there is material impact on financial performance

• Insurance companies are also interested in the financial health of an organisation, so questions in this area would be beneficial.

• Research from the USA suggests that these kind of indicators lead to under reporting and discourages openness – so may they may no be good for self-regulation. It will be self-selecting as only good performing companies will complete CHaSPI.

• Overall CHaSPI appears technical and complicated – this will turn off the board and they will consider it something for specialists. As a result there will be no ownership.

• There needs to be a consistent approach from the regulators. • Much of the information from CHaSPI is publicly available so could apply CHaSPI

question set to an organisation and develop own view of performance. • This issue is that health and safety does not come highly in an investment decision for

many investment organisations. It should become part of the requirements of OFR and would be verified by them.

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4. DISCUSSION

The results may be discussed in relation to the two key aims of the research: • Validity of the index • Value to investors and others

Each of these are considered in turn

4.1 VALIDITY OF THE INDEX

As with the presentation of the results, the validity of the index can be assessed in terms of its practical use as well as how well it reflects health and safety performance. 4.1.1 Practical use of the index

Overall there were few issues related to the practical use of the index, and most users found it face valid. At the most basic level, users found the interface relatively straightforward to use and few found the need to engage with the helpdesk, although those that did found it useful. The main practical suggestion from completing organisations was that the CHaSPI should be provided by the HSE to enhance credibility, and perhaps free for an initial period. The main difficulties with the index centred on specific indicators, in particular the definitions around the major hazard indicator and the ability to gather sickness absence and injury data. In terms of enhancing the credibility of the index, and therefore its validity, a large majority of respondents felt that there was some need for verification of the CHaSPI data. Added weight would be given to the score if it is verified. A majority of the potential users (21) identified that independent verification is important, although they were aware that this could be burdensome. A number of suggestions were made to reduce costs such as carrying out a partial verification and utilising other certification protocols. Two particularly important points are that the verification should be voluntary which would encourage less well resourced organisations to participate in CHaSPI and that verification systems be introduced once CHaSPI is well established with a good reputation. There were no consistent views on the organisation that could carry out the verification, whilst views on fees, which would be born by the organisation, would typically be in-line with health and safety audits. Demonstrating commitment to health and safety was identified as the main benefit of completing with the CHaSPI by organisations from all sectors participating in the study. This was reflected by stakeholder views that improving reputation was important (see tables 9 & 21). Perhaps not surprisingly, attracting investment was only a concern for public limited companies, as well as being of interest to stakeholders. Participants also identified a number of internal benefits of completing the index, with benchmarking within a sector, the provision of information and drivers for health and safety improvement being the most commonly mentioned. Using CHaSPI to benchmark was also identified as a potential use by stakeholders. 4.1.2 Validity of the information gathered

In using the score from CHaSPI the investors and other stakeholders need to be convinced that it is a realistic reflection of an organisation’s health and safety performance. This question was addressed in interviews with both groups and although most completing organisations and four stakeholder participants felt it is a fair reflection, many identified a number of difficulties. Particularly striking for potential users of the index information was the view that ‘headline performance’ should be given more weighting. This is based on the premise that management

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systems may not be effective, but also it may be important that the publicity associated with incidents help shape stakeholder perceptions that in turn will influence fund managers and other investors The major incident rating was by far the most problematic of the indicators, viewed by a number of participants as being limited in use. Potential solutions to this difficulty range from removal to restructuring. Perhaps linked to the comments on major incident rating was the view that the content is not always proportionate to the risk profile of an organisation, particularly those in low risk sectors, for example in the banking sector. There was a view that CHaSPI was designed for high-risk organisations rather than office based organisations. Similarly that it was designed on a presupposed business model that does not fit well with multi-sited organisations that operate in a federal structure. In terms of the calculation of the overall CHaSPI score, a relatively consistent message came across that management issues should make the highest contribution. However some participants felt that occupational health management is part of wider health and safety management and should, therefore, have a greater weighting, or be incorporated into the management system indicator. On average, both groups of participants felt that the weightings of the other indicators should be amended slightly (see tables 12 & 23) The issue of complexity was also identified as problem with the validity of CHaSPI. Based on the stakeholder view that it is too complicated with too many questions and, as such, not proportionate to the benefits that accrue from participating. This may be a misperception since data from the participants completing the index suggest that the time taken to complete was on average one person day. Although there are suggestions that when completed for real some organisations would put in far more time and resource than during the validation exercise, especially if verification was also involved. One potential solution, suggested by stakeholders, would be to identify a number of key questions that become part of the publicly available output. Questions in the area of remuneration and health and safety performance were identified as important. This may provide the opportunity to reduce the overall number of questions and develop an approach that fits a variety of business structures. At the same time it may be possible to introduce additional occupational health indicators such as claims. Using CHaSPI for real The culmination of feedback from participants on the practicality and validity of the index is ultimately a question about whether they would complete a live version of the CHaSPI for their organisation (see Table 11). The responses to this question are mixed. Thirteen participants indicated that they would have no difficulty completing CHaSPI in a real situation. On closer examination of this group, the majority are smaller organisations from both the private and public sectors, with little or no overseas activities. A large number of organisations indicated that they would be unable to complete the index for a variety of reasons that are mainly linked to validity and complexity, this number could be decreased if some of the concerns raised in this report are addressed. Significantly a large number of participants were unable to commit one way or the other to possible completion in the real world. The most common explanation being that the board would need to be consulted. It is tempting to speculate how the board would respond to a poor score. It is also worth noting that this is a limitation of research based on trials rather than live situations.

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4.2 VALUE TO INVESTORS AND OTHER STAKEHOLDERS

Reaction to the CHaSPI from potential information users was mixed. However, views may have been formed on minimal understanding of the index. The majority saw the benefit of having a uniform score for health and safety performance and how this could assist their work especially through benchmarking and engagement (tables 21 & 22). This could be updated on a yearly basis which would be in line with investment review. However this information would probably be supplementary to a portfolio of other tools and information sources that the investment community have access to and in many cases would lead to further research. In addition health and safety may not be a high priority as an investment issue. This will vary with the ethical values of the investment organisation, but also with the type of organisation they invest in, for example offshore as opposed to retail. 4.2.1 Level of completion

Particularly important to potential users of the index information is the level at which CHaSPI is completed for an organisation. 15 potential users felt that CHaSPI scores need to reflect the global operations of UK listed companies, and levels of completion was also highlighted by a number of participating organisations. This concern raises a number of issues on the feasibility of completing CHaSPI at group level. It is of relevance that the majority of organisations completing the index (39) in this research had little or no overseas operations, whilst several that did felt it would be difficult if not impossible because of differing standards and risk profiles of operating divisions. Completion becomes more difficult the greater the number of overseas operations and the range of activities. The lack of overseas operations may be a reflection of the particular sample in this study, and may be a factor as to why it was easier to get some organisation to complete the index and take part in the validation exercise than others. Whatever the level completed it was suggested by a number of participants that it should be made very clear for an index entry what level of the organisation is being considered. Completion for global operations is not such a concern for the insurance companies or brokerages where in fact entries for operating divisions may be helpful. 4.2.2 Reporting frameworks

The stakeholder participants identified a number of reporting frameworks including BITC and EIRIS. BITC was the framework most frequently mentioned by organisations completing the CHaSPI (see table 15). It was notable that a large number of stakeholders (8) do not use any existing frameworks and use alternative (perhaps more reliable because not self completed questionnaires) methods of data gathering including use of consultancies and publicly available information, for example annual reports and company CSR reports both of which now frequently contain health and safety information. It is recognised that health and safety may be one of several CSR topics that would be considered when analysing any organisation. The main difference identified between CHaSPI and other reporting mechanisms is the level of detail. CHaSPI is very detailed and covers a number of aspects of strategic management of health and safety whilst other frameworks tend to have fewer questions and may concentrate of performance data and health and safety is often an optional component. It is not clear whether this is an advantage or a disadvantage. The index may be too specific to stand alone, but as identified in the uses, it is helpful to have detailed health and safety information in one source and format. It would be considered even more useful if that information were verified. The information user view is that BITC may be the only existing framework that could easily incorporate CHaSPI. However as identified in study one there are practical problems with this and as it is membership-based there may be resource issues for some organisations.

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4.2.3 Providing the service

The investors and other stakeholders overwhelmingly supported the notion that HSE should be the service provider. This is in line with the views of the organisations that completed CHaSPI, both groups giving similar reasons based on HSE reputation. BITC was the only organisation identified as a possible alternative. Again similar to study one a large number of interviewees felt that a fee would be inappropriate and act as a disincentive. Significantly seven investor organisations identified that they would not be willing to a pay a fee for the information, which demonstrates perhaps a perception of no added value, although four participants indicated they would pay a modest amount. 4.2.4 Encouraging completion

The acid test of the stakeholder interview was the question that asked if they would encourage organisations they work with to complete CHaSPI. Responses were more negative than positive. Although five organisations were positive this included two from the insurance sector. It is suggested that the insurance sector could warrant further investigations, as unfortunately the sample size in this research is small. There was some lukewarm support from three investors, but this would need more prompting, whilst 8 investors indicated that they would be unlikely to encourage participation. Reasons for this echo issues identified elsewhere in user interviews namely the potential burden on business perhaps linked to the current low priority of health and safety in investment decision making and ensuring validity of the data. The current priority given to health and safety issues may be addressed by the HSC/E through active promotion of the message that health and safety is a key goal of the corporate social responsibility agenda. Promotion of CHaSPI would fit into this context.

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5. CONCLUSIONS AND RECOMMENDATIONS

How should CHaSPI be taken forward? The results of this research suggest that CHaSPI could be of use to both organisations completing it and financial stakeholders, but only after further development and promotion. As it stands, the index does not appear to meet the needs of significant stakeholders. The investors need information at a group level; many large international organisations may find provision of information at this level difficult and are not able to perceive benefits from participation. Perhaps the most satisfied groups are the smaller large organisation (private and public) that have no overseas operations and a consistent risk profile. The role of the investor in these situations becomes less important if not irrelevant. This may suggest that the universality of CHaSPI is its downfall and that target groups have to be identified.

5.1 RECOMMENDATIONS

Assuming that CHaSPI continues to operate, the research has highlighted a number of practically based recommendations that include the following:

1. The reporting of group operations needs to be addressed. This has several implications for the future development of the index:

• Statistical data may need to be in a universal format (many multinational organisations prefer the American OSHA framework for reporting accidents).

• Diverse organisations may benefit from the facility of creating multiple indices for individual business units or operating companies, which could then be aggregated. If this were to be developed, it should also be made clear at what level the organisation is reporting.

2. The contribution of individual indicators to the overall index score should be reviewed.

The two most problematic indicators were those relating to sickness absence and major hazards. Views on the inclusion sickness absence, in particular, were polarised, with some claiming it was irrelevant (and not collected in some cases) to occupational health, whereas views on the major hazard rating, when expressed, tended to be negative. There are a number of options for dealing with these problems:

• The indicators should be deleted from the index. • The contribution of these indicators to the overall score should be reduced. • The indicators should be retained but not contribute to the index score. • In the case of the major hazard rating, categories could be reviewed, and

explanations and examples expanded.

3. The HSE should continue to offer the CHaSPI website under the HSE banner. The service should be provided free of charge until at least, it is well established. Once established the possibility of incorporating the index into other reporting systems can be evaluated.

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4. Verification is necessary to maintain the integrity of the results on CHaSPI.

However there are significant cost implications that may act as a disincentive. There are a number of options as to how verification could be introduced:

• On a voluntary basis, which is made clear on the entry • Partial verification, again made clear on the entry • Random number of organisations selected to be verified by the service

provider • Full verification of all organisations

5. HSE need to be more proactive in the promotion of CHaSPI.

Promotional material should particularly identify the benefits of participating in CHaSPI. These could be based on the benefits highlighted in this research. This could include the ability to benchmark within networks or sectors and extending from this an organisation being able to benchmark between operating divisions. A particular focus of promotion should be the investment community, where further research on establishing the business benefits of CHaSPI, for example, linking CHaSPI ratings to stock market performance (as suggested by one respondent) could provide a powerful selling tool.

6. The publicly available results could include an additional comments section, which would enable participating organisations provide some context to their results.

7. A number of specific issues relating to specific content have been highlighted in

appendix 9, and may be addressed as part of ongoing development.

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HSE; Claros Consulting Marsden, S., Wright, M., Shaw, J., & Beardwell, C. (2004). The Development of a Health and

Safety Management Index for Use by Business, Investors, Employees, the Regulator and Other Stakeholders. Research Report RR217; HSE Books.

Vyrakarnam, S. (1992). Social responsibility: what leading companies do. Long Range

Planning, 25, 59-67. Zairi, M., & Peters, J. (2002). The impact of social responsibility on business performance.

Managerial Auditing Journal, 17, 174-178

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Appendix 1: Introductory letter from HSE

Addressee’s name Company name Street address POST TOWN County Postcode Country Date Dear Corporate Health and Safety Performance Index (CHaSPI) As you may be aware the Health and Safety Executive is developing a corporate health and safety index (CHaSPI). The intention is that CHaSPI is used to show how well an organisation is managing its health and safety performance – which would be of use to both organisations themselves and their stakeholders. This work is in line with the Health and Safety Commission’s new “Strategy for workplace health and safety in Great Britain to 2010 and beyond”. We have reached the stage where we need to validate CHaSPI and have contracted the Centre for Hazard and Risk Management of Loughborough University Business School at Loughborough University to do so. We are looking for leading organisations to test the index and are asking you to help. Why is Chaspi being developed? There is an increasing expectation that employers take responsibility for health and safety seriously as a component of wider social responsibility. Alongside this is a growing demand for greater transparency and accountability over health and safety in the workplace environment. CHaSPI is intended to help meet these by making health and safety details available publicly and to a common standard; it is designed for use by corporate and public sector organisations that have more than 250 employees. The index has several related aims including:

• To help investors to assess the health and safety performance of organisations. A number of investment organisations have already been involved in the development of the index. Investors we saw in February, when CHaSPI was announced, included Barclays Global, Henderson, Insight, Jupiter, Morley and Standard Life. They showed much interest in CHaSPI as the tool they can use to get to grips with health and safety;

• To help insurers determine the terms they offer organisations; • To enable employers to publicise their work towards corporate responsibility and

accountability and be able to compare their performance with others. The enclosed Frequently Asked Questions provides more background information.

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-2-

What does CHASPI look like? CHaSPI is in an experimental form at present to allow further testing and validation. If you would like see what it looks like, visit the website at www.chaspi.info-exchange.com where the ‘demo index’ and user guides provide much more detail. The index is a web-based, self-assessment tool designed in an ‘intuitive’ style, which should enable users to complete it by simply following the instructions. The index asks organisations to supply health and safety information under nine indicators that include, for example, health and safety management and injury rates; from these it automatically generates a report and overall score out of 10.

Why are you asking me to help? To ensure CHaSPI is a practical and useful tool, we need to test it and make necessary improvements. We are looking to secure the involvement of a number of organisations that vary in size, sector and location. We need feedback on a range of subjects including, for example: validity, ease of use, gathering input information, adequacy of support documentation. Participation in the validation exercise will involve time (to complete the index and give feedback to the validation team) and commitment – we estimate at most a few days in all. However, several organisations have already completed the index; and we hope you feel CHaSPI it is worthwhile too and will participate in its validation.

Anonymous? Individual organisation’s results arising from validation will be anonymous. This is not just to encourage your participation, but also because we are likely to make changes and results would therefore be misleading. All information collected will be treated as confidential and no organisations will be identifiable in relation to the data they provide. However, HSE would like to be able to use the names of organisations that helped with validation, as well as comments that are made about using CHaSPI.

What next? A member of the validation team at Loughborough will contact you shortly to discuss potential participation of your organisation. Alternatively, if you are already eager to get involved then do contact the team on 01509 222153 or email chaspi@lboro.ac.uk. Yours sincerely Neal Stone Better Working Environment Division Tel: 020 7717 6484 Email: neal.stone@hse.gsi.gov.uk

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Appendix 2: Email form Validation Team to potential participants

Subject: Corporate Health and Safety Performance Index (CHaSPI) Dear XXXX Following our recent discussions you have expressed a willingness (in principle at least!) to participate in the research we are carrying out for the HSE, by completing the Corporate Health and Safety Performance Index for your organization. The letter for the HSE provides some background information. The first stage in the process is to look at the CHaSPI web site, which can be found at www.chaspi.info-exchange.com . The demo index, user guides and Frequently Asked Questions provide detailed explanations. The second stage is to register as a user. You can then complete the index with your own data. After completion, feedback will be gathered via an interview with researchers from Loughborough University (either by telephone or in person). A range of subjects will be covered including a number that you may need to consider as you complete the index, for example: • Time taken to complete the index, including gathering the necessary information • Who was involved in completion • Ease of use of the index • Any barriers you encountered • Suggestions for improvement I hope there is enough information for you to get started and to complete the index at your earliest convenience. If you have any questions about any aspect of the validation process then do not hesitate to contact us on 01509 222153 or email chaspi@lboro.ac.uk. Yours sincerely CHaSPI Validation Team

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Appendix 3: Email from Validation Team to registered organisations

Subject: Corporate Health and Safety Performance Index (CHaSPI) Dear XXXX A few months/weeks ago you registered on the CHaSPI website. CHaSPI is available in an experimental form at present to allow further testing and validation. The Centre for Hazard and Risk Management at Loughborough University Business School has been contracted by the HSE to carry out this validation. As part of that process we require a number of organisations to complete the index and provide feedback. We hope as a registered user you will be able help. If you agree to participate, following completion of the index, feedback will be gathered via an interview with researchers from Loughborough University (either by telephone or in person). A range of subjects will be covered including a number that you may need to consider as you complete the index, for example: • Time taken to complete the index, including gathering the necessary information • Who was involved in completion • Ease of use of the index • Any barriers you encountered • Suggestions for improvement The data gathered from this validation exercise will be used to further improve the index. All information collected will be treated as confidential and no organisations will be identifiable in relation to the data they provide during the validation process. However the HSE would like to publish a list of participating organisations, since this enables them to acknowledge the commitment of these organisations to health and safety. Participation in the validation exercise will involve some time (both to complete the index and feedback to the validation team) and commitment, however several organisations have already completed the index and we do hope you will feel that it is worthwhile and seriously consider participating in the validation exercise. Since you have already registered please go ahead and complete the index at your earliest convenience. Alternatively, if you have any questions about the validation process then do contact us on 01509 222153 or email chaspi@lboro.ac.uk. Yours sincerely CHaSPI Validation Team

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Appendix 4: Introductory letter from Insight Investment

Addressee’s name Company name Street address POST TOWN County Postcode Country 29th June 2004 Dear , Re: Health and Safety Executive Index I am writing to encourage XXX to consider participating in the forthcoming Health and Safety Executive‘s (HSE) Corporate Health and Safety Performance Index (CHaSPI). Background Insight Investment is the asset management business of Halifax and Bank of Scotland Group (HBOS plc). We manage over £71.8 billion (as at 31 March 2004). Insight believes that corporate responsibility (CR) issues are frequently material to shareholder value. As a result, we incorporate CR analysis in to our overall investment decision-making process. Furthermore, Insight believes that shareholders have a responsibility to support and encourage companies in their efforts to uphold generally accepted standards of corporate responsibility. HSE Corporate Health and Safety Performance Index (CHaSPI) As part of the Government’s new ‘Revitalising Health and Safety’ strategy, the HSE has developed a web-based benchmarking index that aims to help investors and others to assess the health and safety performance of the companies in which they are investing. From an investor’s perspective, good corporate Occupational Health and Safety (OHS) management is an important component of good risk management, and a useful indicator of quality of management. Of course, shareholders should also lend their support to company directors in the discharge of their legal and moral duties regarding the maintenance of a healthy and safe workplace.

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XXX may have already been approached by the HSE, requesting that it participate in a CHaSPI validation exercise being conducted by the Centre for Hazard and Risk Management at Loughborough University. Insight would also like to request that XXX participate in this validation exercise as a first step towards participating in the Index. While Insight supports the current draft Index, there are a few issues that need to be resolved. For example, we have advocated to the HSE that it considers the incentive of lighter-touch regulation in return for a good CHaSPI score. The HSE recognises the need for the draft framework to be properly evaluated and, consequently, has commissioned the validation for this purpose. We believe it is important that companies from a diverse cross-section of sectors participate in the validation exercise, so as to ensure that the index is relevant to both physical and psychological occupational health and safety issues. Early participation should also help to ensure that the Index is relevant, useful and straightforward to use. Further details and a registration form are available at www.chaspi.info-exchange.com. Thank you in advance for considering this matter. Yours sincerely, Dr. Steve Waygood Director, Investor Responsibility

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Appendix 5: Study 1 Interview Protocol Question protocol for CHaSPI interviews with organisations that have completed, or attempted to complete, the index. Organisation Number: Contact person:

Job Title:

Organisation:

Contact Details:

Tel:

Email:

Address:

Completing CHaSPI 1. Were there any internal difficulties/concerns in gaining initial agreement to participate? 2. Who made the decision to participate complete CHaSPI? 3. Did you complete CHaSPI based on group or operating company data? If Group, how easy was this? 4. How feasible would it be to apply CHaSPI to include your overseas operations (if you have any)? 5. Were you able to fully complete CHaSPI? YES/NO If NO, How far did you get?

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6. How long did it take you complete CHaSPI/get as far as you did? 7. Who was involved in the process? For example, the need to consult others, others actually inputting parts of CHaSPI

8. Where staff representatives involved in the process? YES/NO If Yes, how? 9. Did you need any assistance from the help desk to complete CHaSPI? YES/NO If yes what kind of assistance was required? 10. Could the definitions and explanations provided to guide the user be improved? YES/NO If Yes, in what way? 11. Did you find any sections difficult to answer? YES/NO If Yes, which were they, and how might the difficulty be overcome?

12. Are there any aspects of CHaSPI content that could be improved to better reflect your work activity/sector? 13. Are there any improvements (not noted elsewhere) that could be made to CHaSPI?

14. How often do you think your organisation’s entry would need to be completed/updated?

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Validity of CHaSPI 15. Do you feel that the results provide a fair representation of your organisation’s health and safety performance? YES/NO If NO, How could it be improved?, e.g. include other topics, change the weighting used in the calculation of the score 16. Does it reflect key aspects of health and safety performance e.g is the balance between safety and occupational health correct?

Verification of CHaSPI score 17. Is independent verification of CHaSPI necessary? YES/NO If yes, who would you consider appropriate/competent to carry out this function?

18. Would you be willing to pay a fee for the verification? YES/NO If Yes, how much? 19. How often/when do you think the verification would need to take place?

Benefits for participating in CHaSPI 20. What do you think the external benefits are from participating in CHaSPI? 21. What do you think the internal benefits or possible uses are from participating in CHaSPI?

22. Could CHaSPI provide further resources to assist with internal uses? YES/NO If Yes, what? e.g. generation of reports, multiple indices 23. Could there be any incentives provided to encourage organisations to complete CHaSPI? YES/NO If yes what type of incentives would be appropriate?

Compatability

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24. What management system do you use to manage health and safety e.g HS(G)65, 8800, controls assurance. 25. How compatible is CHaSPI with the system? 26. Do you report health and safety performance against an existing reporting framework e.g. BITC, SAM? YES/NO If Yes, which? 27.Would it be worthwhile incorporating CHaSPI into such a framework? YES/NO If yes, how? Service Provider 28.Should CHaSPI be wholly badged or owned by one organisation or jointly by more than one organisation? e.g. HSE with one or two other partners, or HSE only 29.If other organisations suggested who might this be or what sort of body 30. Should a fee be charged for using CHaSPI and making the information available on the website. YES/NO If yes, Who should be charged How much would be acceptable and how often?

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31 If CHaSPI is run with free registration for a period would this encourage you to use it? Would any thing else encourage you? 32. How would you feel if you were completing CHaSPI for ‘real’? e.g. available scores 33. ChaSPI is intended for use by both public and private organisations. Should the results be separated? 34. Do you have any other comments about CHaSPI?

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Appendix 6: Online Feedback Questionnaire

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Completing CHaSPI 1. How clear were the instructions and guidance for completing the index?

Please select one answer.

Very Clear

Quite clear

Neither clear or unclear Quite unclear Very unclear

2. Were you able to fully complete the index?

Please select one answer.

Yes

No

3. Can you estimate how many person hours/days were spent on the index?

Please select one answer.

Less than 2 hours

Between 2 and 4 hours

Between 1/2 and 1 day

Between 1 and 1 1/2 days

More than 1 1/2

If it took more than 1 1/2 days, please estimate how long you think it took in person days.

4. CHaSPI is practical to complete?

Please select one answer indicating your agreement with this statement.

completely agree

partially agree

neither agree nor disagree

partially disagree

completely disagree

If you found some sections were difficult to answer which were they, and how might the be difficulty be overcome? If all were ok please enter 'No comments'

5. CHaSPI is a valid reflection of health and safety performance?

Please select one answer indicating your agreement with this statement.

completely agree partially agree neither agree or

disagree partially disagree

completely disagree

6. CHaSPI will be of use to my organisation?

Please select one answer indicating your agreement with this statement.

completely agree partially agree neither agree or

disagree partially disagree

completely disagree

7. Currently CHaSPI is likely to be acceptable to all of our stakeholders as a measure of health and safety performance?

Please select one answer indicating your agreement with this statement

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completely agree

partially agree

neither agree nor disagree

partially disagree

completely disagree

8. CHaSPI covers an appropriate range of health and safety management issues?

Please select one answer indicating your agreement with this statement.

completely agree

partially agree

neither agree nor disagree

partially disagree

completely disagree

9. Do you think your CHaSPI results should be independently validated?

Please select one answer.

yes

no

If you think that they should be validated independently, who do you think should undertake this validation? If you answered 'no' please add any relevant comments on this issue or simply insert 'no comment'

10. How would you estimate the relative importance of each of the following as indicators of your organisation’s overall health and safety performance? Please add relevant comments or insert ‘no comment’ if appropriate.

Please allocate a total of 10 points between the indicators to reflect their relative significance. For example if you thought only one indicator was important you might allocate it all 10 points, or if you thought they were all equally important you would give 2 points each

11. Do you feel the benefits of completing CHaSPI are proportionate to the effort taken to complete it?

Please select one answer.

benefits greatly outweigh effort

benefits outweigh effort

benefits are roughly proportionate to effort

effort outweights benefit

effort greatly outweighs benefits

12. How useful might CHaSPI be as a lever to promote health and safety within your organisation?

Please select one answer.

very useful

quite useful

unsure not useful counterproductive

13. How useful do you think CHaSPI will be for institutional investors outside your organisation?

Please select one answer.

very useful

quite useful

unsure not useful counterproductive

14. How useful do you think CHaSPI will be for trade unions?

Please select one answer.

very useful

quite useful

unsure not useful counterproductive

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Please indicate which groups or insert ‘no comments’ as appropriate.

16. Do you have any further comments you would like to make about the utility of CHaSPI?

17. Are there any other brief comments you would like to make about CHaSPI?

You may be contacted in the near future for more detailed feedback as part of the validation process.

Appendix 7: Extract from the May edition of the UKSIF Newsletter

What’s New in Social Investment May 2004 Prepared for members and affiliates of the UK Social Investment Forum (UKSIF) For further information, please contact info@uksif.org For Your Action Corporate Health & Safety Performance Index (CHaSPI) - volunteers wanted CHaSPI is intended to show how well an organisation is managing its health and safety performance. The index has several related aims including helping investors assess the health and safety performance of organisations.The index is currently undergoing validation by the Centre for Hazard and Risk Management at Loughborough University Business School. There is an opportunity for investment organisations to give their views on the utilityof the index as part of this exercise. You are encouraged to participate and help to shape the final index.Please contact the CHaSPI validation team on 01509 222153 or email chaspi@lboro.ac.uk for further information. 1st July UKSIF and EIA joint ‘all member’ event - registration now open Registration for the UKSIF and EIA summer evening reception which will be hosted by Gerrard is now open. The seminar session (5:30pm for 6:00pm) will include an update on UKSIF’s Retail Revolution programme, and thedrinks reception on the roof terrace (from 7:15pm) will include the presentation of the Thomson Extel SRI sell-side awards. Further details and on-line registration are available at www.uksif.org. Please feel free to arrive for 7:15pm if you are interested in the sell-side SRI awards but not the Retail Revolution. Sustainability leadership awards nominations closing date 15th June This international prize honours personalities for leadership in implementing the principles of sustainability withinor in co-operation with the private sector, and will be awarded for the fourth time at The Sustainability Forum Zurich on August 26th. For more information about the award, its criteria and nomination process please visit:www.sustainability-award.com. This year’s nomination process closes on June 15th 2004. Consultation on draft OFR regulations open until 6 August… The Government has published draft regulations for consultation on the Operating and Financial Review (OFR)and the Directors' Report. A copy of the consultation document and draft regulations is available at www.dti.gov.uk/cld/financialreview.htm. Responses to the consultation should be made using the contact detailsin the document by 6 August 2004. …..and practical guidance for directors released The OFR Working Group (previously called The OFR Working Group on Materiality), chaired by RosemaryRadcliffe, an independent group of experts established by the Government has published guidance for company directors preparing OFRs. Copies of the guidance are also available at www.dti.gov.uk/cld/financialreview.htm.

UKSIF News – inc. Just Pensions and Retail Revolution news UKSIF’s Executive Director to chair the advisory group for EIRiS’s new Charity Adviser Helen Wildsmith will be chairing the advisory group for this exciting new workstream funded by the EIRiSFoundation (see jobs section p. 5). This builds on the joint report published by CAF, EIRiS and JustPensions last year (Do UK Charities Invest Responsibly?). UKSIF members active in this area, including some of those members who attended the roundtable hosted by Rathbones last December, will be invited to join the advisorygroup in due course. Contact helen.wildsmith@uksif.org for more details. Stock Exchange’s Corporate Responsibility Exchange Initiative Following April’s front page FT coverage the three Exchange/UKSIF chaired multi-stakeholder meetings have been held. The project is now moving into detailed question set production stage. For further information contacthelen.wildsmith@uksif.org UKSIF fund managers to collaborate on laggards in supply chain labour standards As part of UKSIF’s collaborative engagement programme, Helen Barnes will be coordinating two to three meetings over the summer with companies who have been identified as laggards by the Gradient methodology which promotes best practice management of supply chain labour standards. For more information about Gradient visit www.gradient-index.net. UKSIF fund management members / affiliates will be contacted in due course.

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Appendix 8: Study 2 Interview Protocol Questions for interview protocol with potential users of CHaSPI information Organisation Number: Contact person:

Job Title:

Organisation:

Contact Details:

Tel:

Email:

Address:

Validity of the index Do you feel that the results provide a fair representation of an organisation’s health and safety performance? YES/NO If NO, How could it be improved?, e.g. include other topics, change the weighting used in the calculation of the score Does it reflect key aspects of health and safety performance e.g is the balance between safety and occupational health correct? Does the index provide you with the right information to aid with your decision-making about, or dialogue with, an organisation? What additional information would be useful? Would your organisation need an index to reflect the overseas operations of UK listed companies why/why not? Would data be valuable at the operating company level if group data are not available? Why/why not? Would operating company data be useful as part of a breakdown of group activities? How frequently should the index be updated?

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Verification of the index score Is independent verification of the index necessary? YES/NO

If yes, what organisation would you consider appropriate/competent to carry out this function? Should a fee be charged for this service YES/NO If Yes, how much? How often/when do you think the verification would need to take place? Benefits for and barrier to participating in the index What do you think the external benefits are from participating in the index? What do you think the internal benefits or possible uses are from participating in the index? Could there be any incentives provided to encourage organisations to complete the index? YES/NO If yes what type of incentives would be appropriate? What barriers might prevent an organisation from participating in CHaSPI? Service Provider What organisation do you feel would be able to provide this service? What role should the HSE have in offering this service? Should a fee be charged for using the index and making the information available on the website.

YES/NO If Yes, how much would be acceptable and how often?

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Other benchmarks What existing frameworks do you use to assess company health and safety performance? Please list Can you describe advantages/disadvantages of these compared with CHaSPI Could CHaSPI be integrated with these indicators? How would you use the information from CHaSPI? Do you have any other comments about CHaSPI?

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Appendix 9: Comments on specific CHaSPI items Section 1 Health and safety management 1.1 Are we talking about targets or policies are they interchangeable 1.1g target of zero accidents difficult/unrealistic? 1.1h it is not appropriate for the group board to debate h&s targets. The structure of the

organization creates difficulties in answering some of the management questions. 1.1i is not considered relevant - Board involvement is already covered in practice when

approving targets as it is inevitable that debate is created during a Board meeting when targets are being approved.

1.2 explain director of health and safety and allocated responsibility – has the same question

been asked twice. 1.2 concerning levels of representation on the board, does not fit with their structure 1.2e Further clarification is required, as in practice a Board member will delegate H&S to

another Director, although they will still be accountable. 1.2f – not clear on board – definition to appear in all questions 1.3d.Needs clarity on "audit and inspection results". Are the "results" the audit reports, the

NCRs issued, issues or trends, or actions required and whether they have been closed out? Again different information will be appropriate to review at different managerial levels.

1.3g and h. Question did not work for a Group response. Key suppliers do not exceed 10%, or provide critical services as defined. So we answered not applicable, which is daft for us! We do actually track sub-contractor safety performance and report it to the Board. Again, responding at Opco level would solve this problem.

1.3 particularly g&h this level of detail is not reported to the group board 1.4 interpreted forum for public reporting as the CSR Report – more guidance would be helpful 1.4 do not believe this level of reporting is necessary 1.4e We do collect and report subcontractor statistics, but are unable at Group level to

disaggregate those from stats of our own people. Again need to respond at Opco level.

1.5 difficult for people to answer because more than one question is asked. Needs rewriting 1.5 what about occ health? 1.5 Again an opco response is more sensible than a Group response 1.5 is confusing at first glance - no need to "hide" the guidance notes - the text should be

upfront on the questionnaire (avoiding the need for a click). 1.6 health and safety plans are not debated - too detailed for the attention of the board Does the

definition of board need to include operational boards? 1.6 There is an unnecessary level of detail on improvement plans - questions (d), (e) and (f) are

not considered appropriate for a Director of a multi-national organisation. 1.6 need a definition of a safety improvement plan – used their CSR improvement process 1.7 workforce involvement – very few employees – mainly contractors, subcontractors 1.8 the system does not reflect performance – do not believe audit is effective 1.8 Opco responses are the sensible approach again 1.8 f, examples of recognised methods/guidance are needed to improve clarity.

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1.9b is confusing - needs a definition. Question (d) also needs to relate to significant contractors (using the 10% rule defined in other sections).

1.9e is a double-barrelled question covering both suppliers and contractors?? Should be split – not sure how relevant some suppliers are to health and safety

1.9f could have ‘not applicable’. 1.10 how is the system integrated? 1.10 – they operate a ‘formal’ health and safety management system developed in collaboration

with HSE is that the same as a ‘recognised’ 1.10a - note EMAS is not a recognised H&S management system, its scope is environmental.

Make it clear whether or not to complete the "supplementary guidance on management systems" - there are far too many questions here (looks like a wish list of issues)

10.4b I don't understand the relevance. 1.11 consider the quality of goods rather than h&s 1.11some questions in relation to contractors are too narrow 1.11 – double barreled –contractors and suppliers – they had over 1000 suppliers, some they

have no choice with e.g. utilities – not worth the paper chase Section 2 Injury rates 2.0 do not separate out employees from contractors (a third option could be to have the rates

merged) 2.0 should ‘temporary labour be included with contractors 2.1 and 2.2 We do not have separate contractor data available at Group level, only at opco

level. Therefore response not possible in a sensible way. 2.1 groups 3-day and fatal events together. Why not use RIDDOR categories? 2.2 work carried out by contractors – does it mean volume or cost? Section 3 Sickness absence rates 3.0 gathering sickness absence for contractors is impossible 3.0 frameworks might be different in other countries – only useful within the organization 3.1 Please clarify that this refers to Total Sickness Absence, and NOT to that portion of it which

is Work Related Ill-health absence. Section 4 Occupational health management 4.0 could not find exact definitions for e.g. medical rehabilitation – is this providing physio or

private medical treatment or medical assessment and advice by OHS. They used their own interpretation – this will lead to different companies interpreting differently

4.0 although have initiatives in place for occ health, it is difficult to set targets and monitor as there is very little data for the contractors- employment conditions so different, floating labour force etc

4.1 questions j and k appear to be almost the same – rehabilitation and back to work 4e and 4m are double-barreled ‘..consideration of current health status and capabilities of

individual workers. 4m monitors and manages. 4g …consistent with HSE guidance.. what guidance? Depends on how good you are at

updating etc

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Section 5 Major incident rating 5.0 Did not get this at all. G-D could be one, C and B/A. Linked to dangerous occurrences 5.0 A very strange "pyramid" of safety consequences:- Several categories of catestrophic

consequences, down to "1-5" fatalities. Most organisations will have zero of these big events, and possibly some single fatality events. - Single fatality events are not requested separately, nor major injury events, nor >3-day events. These levels of the pyramid are missing. Then there are several categories of "near miss" type events (A,B,C). Such near misses are notoriously difficult to define and will not be measured consistently. Any data entered here would offer very poor benchmarking. Often near miss events will not be measured at all; a zero response does not mean that they didn't happen, just that they were not recorded. A better question would be to ask if near misses are recorded and acted upon. Similarly health cases are often poorly reported; a zero response does not mean that they didn't happen, just that they were not recorded.

5.1 did not understand the relevance – examples are no help more guidance, examples needed

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