What is Officer Due Diligence?

The Paradigm Shift in Executive Liability

Officer due diligence represents a fundamental shift from reactive compliance to proactive governance. You can be prosecuted for failing to exercise due diligence even if no accident occurs in your workplace.

This legal concept demands that you actively monitor the safety health of your organisation with the same rigor you apply to financial reporting. The law essentially asks: "What steps did you personally take to ensure your business was safe?" If your answer relies solely on trusting others without verification, you are likely in breach.

The introduction of Industrial Manslaughter laws across most Australian jurisdictions has escalated the consequences dramatically. In states like Queensland, Victoria, and NSW, negligence or recklessness leading to a worker's death can result in prison sentences of up to 25 years for individuals.

Why This Matters to You

The implications extend beyond legal defense to the fundamental operational viability of your organisation.

Personal Liberty: You face potential imprisonment for gross breaches, particularly where recklessness is involved. Industrial manslaughter laws now operate in nearly all Australian jurisdictions with penalties up to 25 years.

Financial Liability: Penalties for officers have increased significantly. As of 2024/25, fines for Category 1 offences can exceed $3.3 million for individuals, and these fines often cannot be paid by the company or covered by insurance.

Reputation: A prosecution for a due diligence breach dismantles your professional reputation. It signals to the market that you failed in your primary governance obligation: the preservation of your workforce.

Operational Excellence: Organisations with high WHS maturity often outperform competitors. The rigorous process analysis required for safety due diligence often uncovers inefficiencies and quality issues that would otherwise remain hidden.

Who is an Officer?

Understanding whether you are an "officer" is the first step in managing your liability. The WHS Act adopts the definition from Section 9 of the Corporations Act 2001. This definition is functional rather than titular—it doesn't matter what your job title is; what matters is the influence you exert over the business.

You are an officer if you are a director or secretary of the corporation, make or participate in making decisions that affect the whole or a substantial part of the business, have the capacity to affect significantly the corporation's financial standing, or are a person in accordance with whose instructions the directors are accustomed to act.

For example, a Chief Financial Officer who systematically denies budget requests for safety maintenance is making a decision that affects the whole business. A General Manager of a large division is making decisions affecting a "substantial part" of the business.

Volunteer Officers

If you are a volunteer officer of a PCBU that employs staff, you owe the same duty of due diligence as a paid director. However, under Section 34(1) of the WHS Act, a volunteer officer cannot be prosecuted for failing to comply with their officer duties.

This immunity is designed to ensure people aren't discouraged from volunteering for community organisations. However, the organisation itself can still be heavily fined, and you can still be prosecuted as a "worker" if you actively engage in conduct that endangers others.

The Six Elements of Due Diligence

Section 27(5) of the WHS Act establishes six specific elements you must demonstrate to discharge your duty. These form a comprehensive framework for active safety governance.

Element 1: Acquire and Keep Up-to-Date Knowledge

You must "acquire and keep up-to-date knowledge of work health and safety matters." This is the foundation—you cannot manage a risk you don't understand.

You need knowledge in three areas: legal obligations (what the WHS Act requires), hazard management principles (the basics of risk management and the hierarchy of controls), and industry trends (emerging issues in your sector).

To demonstrate compliance, attend formal training for officers as part of continuous professional development. Subscribe to alerts from your state regulator and Safe Work Australia. Include legislative updates or safety education topics in every board meeting. Familiarise yourself with relevant Codes of Practice.

Common Failure: The "tick and flick" approach to training. In prosecutions, investigators test your actual knowledge, not just your training records. If you cannot explain the critical risks of your business under cross-examination, your training records will be viewed as a sham.

Element 2: Understand the Nature of Operations

You must "gain an understanding of the nature of the operations of the business and generally of the hazards and risks associated with those operations." This bridges the gap between the boardroom and the shop floor.

You must understand how your business actually works, not just how it's supposed to work. The critical concept here is "Work as Imagined" versus "Work as Done." Work as Imagined is what's in your procedure manuals. Work as Done is the reality where workers adapt to resource constraints, time pressure, and equipment failures.

Your duty is to understand Work as Done. Regular visits to the frontline are essential—not VIP tours but genuine inquiries. Talk to workers: "What is the hardest part of your job?" "What equipment creates the most frustration?" "If you could change one thing to make this job safer, what would it be?"

Maintain a "Critical Risk Register" at the board level listing the top 5-10 risks that could cause a fatality or major prosecution. Review this regularly to ensure it matches current operations.

Element 3: Ensure Appropriate Resources and Processes

You must "ensure that the PCBU has available for use, and uses, appropriate resources and processes to eliminate or minimise risks." This places safety squarely in the domain of financial governance.

The legislation uses "available for use, and uses." It's not enough to buy safety gear—you must ensure it's used. If workers disable safety features because they're annoying and supervisors turn a blind eye, you've failed to ensure usage.

Safety should not be a discretionary line item. When new capital equipment is purchased, ensure the budget includes training, maintenance, and safe operating procedures. Ask about vacancy rates and overtime hours—high overtime and understaffing are leading indicators of fatigue and error.

Element 4: Incident Reporting and Response

You must "ensure that the PCBU has appropriate processes for receiving and considering information about incidents, hazards and risks and responding in a timely way." Information is the lifeblood of due diligence.

Organisational hierarchies act as filters—"bad news" is often sanitized before it reaches the executive level. Your duty is to ensure reporting channels are open. If your board reports are always "green," you should be suspicious. This is the "Watermelon Effect"—green on the outside, red on the inside.

If you have zero near-miss reports but a high injury rate, your reporting culture is broken. You must actively encourage reporting of bad news. Celebrate the reporting of a near miss as a "free lesson" rather than punishing the mistake.

Track the time it takes to close out safety actions. "Average time to fix critical hazard" is a key metric. If this number is increasing, your system is clogged.

Element 5: Legal Compliance Processes

You must "ensure that the PCBU has, and implements, processes for complying with any duty or obligation" under the Act. This covers specific bureaucratic requirements: notifying the regulator of notifiable incidents, consulting with workers and Health and Safety Representatives, complying with improvement or prohibition notices, providing training, and holding valid licenses.

There's a difference between being "compliant" and being "safe." You can have compliant paperwork and still have an unsafe workplace. However, compliance is the baseline. Commission periodic external legal reviews of your WHS management system under legal professional privilege.

Element 6: Verification

You must "verify the provision and use of the resources and processes" referred to in the other elements. This is the most critical element—it transforms your role from passive recipient of reports to active investigator of truth.

In many prosecutions, officers claim "I was told everything was fine." The court's response: "Why did you believe that without checking?" In R v Brisbane Auto Recycling, the directors' complete lack of verification was a key factor in their conviction and suspended prison sentences.

Verification methods include: picking one topic per board meeting for a deep dive, engaging external auditors for unbiased assessments, checking specific details during site visits (if the report says "all fire extinguishers tested," check the tag), and running anonymous safety climate surveys to verify what reports claim about culture.

The Due Diligence Elements in Practice

Case Studies and Legal Precedents

SafeWork NSW v Mitchell Doble (2024)

A worker was seriously injured by a forklift at Miller Logistics. The company (PCBU) was charged, and the sole director, Mr. Doble, was personally charged. Mr. Doble demonstrated he had employed a qualified WHS manager, attended safety meetings, and allocated resources.

The PCBU was convicted, but Mr. Doble was acquitted. The court confirmed that an officer doesn't have to be an expert in every hazard. They can rely on delegates and experts, provided they have a system to manage that reliance. The fact that the system failed in a specific instance didn't mean the officer failed in his broader governance duty.

R v Brisbane Auto Recycling (2020)

A worker was crushed by a forklift. The company had no safety systems, no traffic management plan, and no safety officer. The directors took no interest in safety. The company was fined $3 million, and the two directors were sentenced to 10 months imprisonment (suspended).

The lesson: total abdication of responsibility is a criminal offense. You cannot outsource your duty to "common sense" or the workers themselves. The lack of any documented system was fatal to their defense.

The "Paper Shield" Delusion

Many officers believe that having a thick folder of policies protects them. It doesn't. If the policy says "wear a harness" and the worker doesn't, and you never checked, the paper is worthless.

This is the "tick and flick" culture—completing safety documentation purely for compliance without genuine engagement. Courts view this as evidence of systemic negligence. A "Take 5" risk assessment where the worker ticks "No" to every hazard in 10 seconds without looking demonstrates failure.

The law judges what happens in practice, not what's written in a manual. Your verification duty exists precisely to prevent this gap between paper and reality.

Reporting and Metrics: Measuring Due Diligence

Most board reports focus on Lagging Indicators like Lost Time Injury Frequency Rate (LTIFR). These measure the past. A low injury rate doesn't mean you're safe—it might just mean you're lucky.

Due diligence requires measuring the inputs (effort) rather than just outputs (injuries). Leading indicators include: number of safety walks completed by officers, percentage of hazards rectified within target timeframes, percentage of scheduled inspections completed versus planned, and percentage of workforce verified as competent in critical risks.

Your board report should answer three questions: Do we understand our critical risks? Are the controls for those risks working? Are we improving?

References

• Safe Work Australia, Interpretive Guideline - The Health and Safety Duty of an Officer under Section 27, PDF Guide
• Work Health and Safety Act 2011, Section 27, AustLII
• Kingston Reid, SafeWork NSW v Mitchell Doble Summary and Lessons, Case Analysis
• Cooper Grace Ward, Australia's first Industrial Manslaughter case decided in Brisbane (R v Brisbane Auto Recycling), Case Summary
• SafeWork NSW, Work Health and Safety Amendment (Industrial Manslaughter) Act 2024, Legislation
• Comcare, Exercising Due Diligence guidance for officers, PDF Guide
• Government of South Australia, WHS Guide Note - Safety Walks and Safety Observations, Guide Note
• OSHA, Using Leading Indicators to Improve Safety and Health Outcomes, PDF Publication