From oversight to foresight:

Modern WHS governance for boards and the psychosocial challenge.

By Megan Kavanagh, Leanne Dearlove and Amelie Golds

In brief

Boards will fall into error where they take a passive approach to discharging their due diligence obligation, as was confirmed in Swan v Monash Law Book Co-operative [2013] VSC 326 and Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196. These cases illustrate the active and positive duty board members hold to monitor safe working conditions and implement change, as far as reasonably practicable. Failure to do so may create personal liability, including significant fines and potential imprisonment. With the increase in psychological injury claims, boards need to be looking beyond slips and trips to understand the data before them as to how psychological injury risk is being managed. 

The corporate governance framework

Directors understand that they have oversight for the way that accountability is exercised by the CEO and others in respect of regulatory compliance, including in respect of safety. There is an overlap between the C-suite's role and the role of the board, particularly in relation to work health and safety (WHS) obligations. Failure to identify, manage or respond to WHS risks rests with both the board and C-suite. 

Silence, inaction and any failure to understand and challenge changes in data that may indicate unmanaged or emerging risk is where inactive boards fail to discharge their duties. The consequence may be unmanaged risk and possible personal liability to ensure effective due diligence.

Where the risk of psychological injury can be hard to identify, it is understandably difficult for boards to discharge their due diligence duty regarding such risk. However, where 12% of all serious injury claims arise from psychological risk (representing a 161% increase over 10 years), boards need to understand what data they need to provide oversight in respect of such risk. They need to be asking more nuanced questions and requesting more specific data. In short, an innovative approach is required. 

For boards to discharge their duty, they have to understand where the psychosocial risk is. Common causes of psychological injury claims include:

  • Harassment and workplace bullying: 33%. 
  • Work pressure / job demands: 24%.
  • Violence and harassment / aggression: 15–16%.

Despite these high numbers, many boards do not receive meaningful data to help them to understand the risk. 

The trend is clear, the prevalence of psychological injuries is growing at a faster rate, lasting longer and costing more than physical injuries. Regulators are explicitly calling out psychosocial hazards as a priority for the C-suite and boards to manage. To send a message to boards about their role in managing such risk, they are being prosecuted by regulators for failing to discharge their due diligence obligations.

Education sector only

  • In education settings, student behaviour, including verbal aggression, threatening conduct or physical violence, unreasonable conduct or expectations demonstrated by parents and issues arising where children have complicated diagnoses that may not always be well managed, can be a significant source of both physical injury and psychological burnout for teaching and support staff and must actively be addressed by boards.
  • Where staff in the education sector are simultaneously responsible for maintaining safe learning environments for students and managing their own wellbeing, the governance challenge for boards is both a WHS and safeguarding matter.

Aged care economy

The safeguarding lens: Protecting residents and staff

In the aged care economy, WHS governance cannot be shielded from safeguarding obligations. Safeguarding refers to the suite of systems, practices, policies and culture that an organisation maintains in order to protect people in its care from harm, including abuse, neglect, exploitation and preventable injury. Psychological safety must be understood as both a WHS matter and also as a factor critical to safeguarding. 

The Aged Care Quality and Safety Commission's (ACQSC) regulatory framework reinforces that a psychologically unsafe workplace is a risk to residents, not just to workers. Where staff are exposed to workplace stress, burnout, bullying or inadequate supports, the quality of care they are able to provide is directly compromised. Boards that treat staff wellbeing as a separate concern from resident safety are missing a critical governance connection. 

Effective safeguarding in aged care and the care economy more generally requires boards to maintain active oversight of:

  • Mechanisms for residents, families and staff to raise concerns safely, including complaints systems, advocate access and whistleblower protections.
  • The adequacy of staffing ratios to meet resident needs safely without placing unsustainable psychological demands on the workforce.
  • Staff support mechanisms following exposure to traumatic events, including the death of residents, aggression incidents and critical quality failures.
  • Screening and ongoing review of all persons working with residents, including volunteers and contractors.

Education sector

The safeguarding lens: Protecting students and staff

In an education setting, whether that be childcare, schools and universities or training facilities, WHS governance cannot be separated from safeguarding obligations. Safeguarding refers to the suite of systems, procedures, policies and the culture that an institution maintains to protect children from harm, such as abuse, neglect and exploitation. For boards in the education sector, staff psychological safety must be understood as both a WHS obligation and a prerequisite for ensuring a safe learning environment for students.

Safeguarding governance in education requires boards to maintain oversight of:

  • Legal compliance with the Child Safe Standards and Reportable Conduct Scheme (CSSRCS). Where recent developments in both childcare regulation federally and specific reportable conduct changes, particularly in Queensland, boards should not underestimate the impact of these reforms on workload, reporting and training requirements. Consideration should be given to resourcing as part of board safety considerations.
  • Mechanisms for students, parents and staff to raise concerns safely, including complaints systems and mandatory reporting frameworks. In addition to those systems, boards must be satisfied that protections are in place to prevent these systems from leading to work intensification, abuse from parents in the sense of continuing to raise matters that may have been addressed. Commonly childcare, school, universities and training organisations have complaint processes but not a check of how those processes are impacting on psychological safety.
  • Screening, working with children checks and ongoing assessment of all staff, volunteers and contractors who interact with students.
  • Training in incident reporting, mandatory reporting obligations and legal compliance. 

Further information on child safeguarding and the implementation of effective practices is available in the following articles:

Government sector

The unique challenge for the government sector

Managing psychological risks is fundamentally harder for the government sector than for workplaces in the private sector. Governments simultaneously occupy four distinct roles: employer, regulator, service provider and political institution. These roles create structural tensions that do not exist in the private sector.

As employers, government agencies must comply with WHS laws and fulfill their duty of care to staff. As regulators, they may also be responsible for setting and enforcing those very same standards across the industry. As service providers, they face demand-driven pressures, public accountability and resource constraints that are largely outside their control. As political institutions, they operate under ministerial scrutiny, parliamentary processes and public expectations that fundamentally shape how decisions are made and by whom. These overlapping roles can create blurred lines of accountability, which can be problematic for psychosocial risk management. 

Government organisations must also manage unique psychosocial hazards, including:

  • Role ambiguity and lack of job control arising from changes in policy direction or government restructures.
  • Emotional stressors for workers in frontline service delivery and the focus of regulatory enforcement on ensuring the safety of people in those roles, particularly in health care, education and front-line customer facing positions.
  • Managing emergency responses, including police, ambulance, fire and rescue and custodial services. In these roles staff face inherent risks to their physical and emotional safety. Those risks can be immediate or may emerge at times when risks are consistently faced but sufficient psychological safety measures are not in place.
  • Exposure to traumatic events in welfare, justice, health and crisis-facing agencies.
  • Constant political and media scrutiny that puts additional pressure on leadership and staff.

 Further commentary on the prevention of psychosocial injuries in the public sector is addressed in the following article: 'Prevention is Better than Cure: The High Cost of Public Service Workers Psychosocial Injuries.'

Lessons from case law: From oversight to active inquiry  

Swan v Monash Law Book Co-operative [2013] VSC 326

This case concerned a claim by Ms Swan against her employer, Monash Law Book Co-operative (MBLC) for a psychiatric injury sustained in the course of her employment. Ms Swan alleged that her psychiatric injury was caused by MBLC's negligence in exposing her to an unsafe workplace where she was bullied and harassed by her manager, Mr Cowell.

Justice Dixon was highly critical of the board's inaction, finding that it failed to implement necessary steps to prevent Ms Swan from being exposed to a foreseeable risk of psychiatric injury in the workplace.  

 Justice Dixon gave considerable weight to the fact that the board itself had acknowledged the seriousness of the allegations and accepted that the matter required investigation and an appropriate response. Despite this awareness and the receipt of a report confirming the allegations, the board failed to act.

Ultimately, Justice Dixon concluded that the board's lack of action was crucial in the injury being awarded to Ms Swan and she was awarded $292,554 for pecuniary losses and $300,000 for pain and suffering.

Australian Securities and Investments Commission v Bekier (Liability Judgment) [2026] FCA 196

This case concerned the breach of a director's duty to exercise due care and diligence under section 180 of the Corporations Act 2001 (Cth). The Australian Securities and Investments Commission (ASIC) commenced proceedings against all of the directors of The Star Entertainment Group Limited. 

Although it did not directly concern the management of WHS risks, it is an important judgement that confirmed that directors have a fundamental duty to guide and monitor the affairs of the company.

Justice Lee emphasises, where information comes to a director's attention that raises suspicion that something may be amiss, there is a positive duty to make further enquires. Justice Lee further stressed that it "… is the duty of directors to engage in actively pressing management with difficult questions as to whether the business was being conducted ethically, lawfully and to the highest available standard".

Ultimately, the Federal Court found that the two former executive directors were liable for breaching their duties. The CEO was fined $180,000 and disqualified from managing corporations for 18 months and the Chief Legal and Risk Officer were fined $60,000 and disqualified for 9 months.

Practical guidance

These decisions serve as a reminder of the standard of diligence and care expected of company directors. The consequences for directors who fail to actively oversee the company's operations and conduct are significant. 

Boards will be aware of their continuing duty to understand their legal obligations. They can do this through ongoing education and active oversight, including understanding relevant data and trends, fostering a positive and safe workplace culture, responding to red flags and ensuring good governance through statutory compliance. 

However, where the risk of psychological injury is nearly unavoidable and if the cases tell us anything, it is not being consistently and effectively managed (if the increase in claims is any indication), a more innovative board response to psychological safety is needed. If existing governance practices are falling short, boards might consider how they challenge the C-suite to do more with the intention of reducing injury rates and better discharging due diligence obligations. 

To address this challenge, boards may wish to consider the following innovative strategies: 

  1. Treat psychosocial risk as a critical risk, not a wellbeing add on by identifying critical psychosocial risks (e.g. high job demands, exposure to aggression, role conflict and remote isolation) and ensuring the risk register allocates owners to address the risk in day-to-day operations and in respect of major change. Reviews of the effectiveness of such control measures must be undertaken and assessed regularly.

  2. Ensure psychosocial risk data that goes to the board includes more than lag indicators like employee assistance programs (EAPs) and sick leave. While these metrics show outcomes, they do not provide insight into the underlying causes of risk. Boards should also receive leading indicators, such as overtime hours, staffing ratios, caseloads, security callouts, incident reports, complaints data and patterns showing when employees are working outside normal hours. Including these measures in board reporting gives a more complete picture of psychological stressors within the organisation.

  3. Mandate a psychosocial risk assessment program (with board visibility) across the business, aligned with the code of practice. Such an assessment might identify the most significant risks which might then drive initiatives for better management and response to reduce injury risk.

  4. Seek evidence of psychosocial safety quality, not just survey scores. Often there is a focus on survey highlights (retention, turnover and sick days). Management are directed to improve those scores. Focus on the scores might miss the underlying issue. For example, putting pressure on management to bring sick days down without focusing on the cause of absenteeism might inadvertently create further risk to psychological safety.

  5. Invest in leadership capability as a core control. Leadership behaviour is central to effectively responding to and controlling psychosocial risk. Only a minority of organisations invest meaningfully in training for leaders around psychological safety. It can be hard to take decisions to address poor conduct by high performers that may be contributing to risk. Where possible, boards must demand leaders demonstrate capability around psychological safety, creating a common understanding and expectations against which leaders can be held accountable and a basis from which to assess promotion, advancement or reward for psychologically safe leadership. 

  1. Treat psychosocial risk as a critical risk, not a wellbeing add on by identifying critical psychosocial risks (e.g. high job demands, exposure to aggression, role conflict and remote isolation) and ensuring the risk register allocates owners to address the risk in day-to-day operations and in respect of major change. Reviews of the effectiveness of such control measures must be undertaken and assessed regularly.

  2. Ensure psychosocial risk data that goes to the board includes more than lag indicators like employee assistance programs (EAPs) and sick leave. While these metrics show outcomes, they do not provide insight into the underlying causes of risk. Boards should also receive leading indicators, such as overtime hours, staffing ratios, caseloads, security callouts, incident reports, complaints data and patterns showing when employees are working outside normal hours. Including these measures in board reporting gives a more complete picture of psychological stressors within the organisation.

  3. Mandate a psychosocial risk assessment program (with board visibility) across the business, aligned with the code of practice. Such an assessment might identify the most significant risks which might then drive initiatives for better management and response to reduce injury risk.

  4. Seek evidence of psychosocial safety quality, not just survey scores. Often there is a focus on survey highlights (retention, turnover and sick days). Management are directed to improve those scores. Focus on the scores might miss the underlying issue. For example, putting pressure on management to bring sick days down without focusing on the cause of absenteeism might inadvertently create further risk to psychological safety.

  5. Invest in leadership capability as a core control. Leadership behaviour is central to effectively responding to and controlling psychosocial risk. Only a minority of organisations invest meaningfully in training for leaders around psychological safety. It can be hard to take decisions to address poor conduct by high performers that may be contributing to risk. Where possible, boards must demand leaders demonstrate capability around psychological safety, creating a common understanding and expectations against which leaders can be held accountable and a basis from which to assess promotion, advancement or reward for psychologically safe leadership.

  6. Apply a safeguarding lens to all psychosocial risk data. Boards should review staff wellbeing data and critically assess how this may negatively impact care being provided to residents. Establish clear reporting lines that connect Human Resources data, incident data and resident care quality data for board-level review.

  7. Considering the impact of uncertainty. In periods of heightened uncertainty, where government is focused on cost savings across the aged care and NDIS sectors, such uncertainty can create significant psychosocial risk. Staff may fear work intensification or job loss. Anxiety regarding changing funding can also affect the way that participants, clients, residents and their families respond to staff. Boards should seek assurance regarding communication strategies for proposed changes, for both staff and clients and ensure that there are clear mechanisms in place to manage the effects of anxiety and uncertainty for both staff and clients.

  1. Treat psychosocial risk as a critical risk, not a wellbeing add on by identifying critical psychosocial risks (e.g. high job demands, exposure to aggression, role conflict and remote isolation) and ensuring the risk register allocates owners to address the risk in day-to-day operations and in respect of major change. Reviews of the effectiveness of such control measures must be undertaken and assessed regularly.

  2. Ensure psychosocial risk data that goes to the board includes more than lag indicators like employee assistance programs (EAPs) and sick leave. While these metrics show outcomes, they do not provide insight into the underlying causes of risk. Boards should also receive leading indicators, such as overtime hours, staffing ratios, caseloads, security callouts, incident reports, complaints data and patterns showing when employees are working outside normal hours. Including these measures in board reporting gives a more complete picture of psychological stressors within the organisation.

  3. Mandate a psychosocial risk assessment program (with board visibility) across the business, aligned with the code of practice. Such an assessment might identify the most significant risks which might then drive initiatives for better management and response to reduce injury risk.

  4. Seek evidence of psychosocial safety quality, not just survey scores. Often there is a focus on survey highlights (retention, turnover and sick days). Management are directed to improve those scores. Focus on the scores might miss the underlying issue. For example, putting pressure on management to bring sick days down without focusing on the cause of absenteeism might inadvertently create further risk to psychological safety.

  5. Apply a safeguarding lens to all psychosocial risk data: Boards must recognise that a deteriorating staff wellbeing environment is also a risk to student safety. Establish governance processes and systems that integrate staff WHS data, student safety data and complaints data to allow for a comprehensive board-level review. 

  6. Invest in leadership capability as a core control. Leadership behaviour is central to effectively responding to and controlling psychosocial risk. Only a minority of organisations invest meaningfully in training for leaders around psychological safety. It can be hard to take decisions to address poor conduct by high performers that may be contributing to risk. Where possible, boards must demand leaders demonstrate capability around psychological safety, creating a common understanding and expectations against which leaders can be held accountable and a basis from which to assess promotion, advancement or reward for psychologically safe leadership. 

  1. Treat psychosocial risk as a critical risk, not a wellbeing add on by identifying critical psychosocial risks (e.g. high job demands, exposure to aggression, role conflict and remote isolation) and ensuring the risk register allocates owners to address the risk in day-to-day operations and in respect of major change. Reviews of the effectiveness of such control measures must be undertaken and assessed regularly.

  2. Ensure psychosocial risk data that goes to the board includes more than lag indicators like employee assistance programs (EAPs) and sick leave. While these metrics show outcomes, they do not provide insight into the underlying causes of risk. Boards should also receive leading indicators, such as overtime hours, staffing ratios, caseloads, security callouts, incident reports, complaints data and patterns showing when employees are working outside normal hours. Including these measures in board reporting gives a more complete picture of psychological stressors within the organisation.

  3. Mandate a psychosocial risk assessment program (with board visibility) across the business, aligned with the code of practice. Such an assessment might identify the most significant risks which might then drive initiatives for better management and response to reduce injury risk.

  4. Seek evidence of psychosocial safety quality, not just survey scores. Often there is a focus on survey highlights (retention, turnover and sick days). Management are directed to improve those scores. Focus on the scores might miss the underlying issue. For example, putting pressure on management to bring sick days down without focusing on the cause of absenteeism might inadvertently create further risk to psychological safety.

  5. Invest in leadership capability as a core control. Leadership behaviour is central to effectively responding to and controlling psychosocial risk. Only a minority of organisations invest meaningfully in training for leaders around psychological safety. It can be hard to take decisions to address poor conduct by high performers that may be contributing to risk. Where possible, boards must demand leaders demonstrate capability around psychological safety, creating a common understanding and expectations against which leaders can be held accountable and a basis from which to assess promotion, advancement or reward for psychologically safe leadership.

  6. Acknowledge and manage structural tensions explicitly. Some sources of psychosocial risk originate in policy, funding or political settings that are not always within management's control. Rather than leaving these tensions unaddressed, government boards should ensure they are acknowledged, documented, escalated where appropriate and ensure risk-mitigation strategies are in place to protect staff so far as reasonably practicable.

Should you require further guidance or would like to discuss how your board can more effectively navigate its work health and safety obligations, please contact our Employment & Safety team.

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