Australia's Officer Due Diligence Duty: 4 Things UK Boards Get Wrong

A UK group appoints two of its executives to the board of its Australian subsidiary. Neither has been to Sydney. Both treat the appointment as a governance formality, the kind of thing company secretarial sorts out and nobody thinks about again.

Both have just acquired a personal statutory duty, enforceable against them individually, which they can breach without anything happening to anybody and without the company being convicted of anything.

That is section 27 of Australia's work health and safety legislation, and it is the single biggest difference between Australian and British safety law at board level. UK directors are used to a liability that attaches when something goes wrong and their conduct is examined. Australian officers carry a duty that is live on a quiet Tuesday when the business is operating normally.

Here are the four things UK and US boards most often get wrong about it.

The provision itself

Worth setting out, because the wording does the work. The duty appears in the model work health and safety law adopted across most Australian jurisdictions. Taking the Commonwealth version of the Work Health and Safety Act 2011, section 27(1) provides that where a person conducting a business or undertaking has a duty under the Act, an officer of that person "must exercise due diligence to ensure that the person conducting the business or undertaking complies with that duty or obligation."

Section 27(5) then defines due diligence as including taking reasonable steps:

Limb	What it requires
(a)	To acquire and keep up to date knowledge of work health and safety matters
(b)	To gain an understanding of the nature of the operations and generally of the hazards and risks associated with those operations
(c)	To ensure the business has available for use, and uses, appropriate resources and processes to eliminate or minimise risks
(d)	To ensure the business has appropriate processes for receiving and considering information regarding incidents, hazards and risks, and responding in a timely way
(e)	To ensure the business has, and implements, processes for complying with its duties under the Act
(f)	To verify the provision and use of the resources and processes referred to above

Six limbs, each a positive step. Read limb (f) twice. It is not a summary of the other five.

1. You are an officer by function, not by title

The first error is assuming the duty attaches to people who live in Australia, or to people whose job description mentions safety.

The concept of officer is drawn from corporations law and reaches beyond the obvious. It captures directors and company secretaries, and it also captures people who participate in making decisions that affect the whole or a substantial part of the business, or who have the capacity to affect significantly the entity's financial standing. A group executive who signs off the Australian entity's budget, headcount or capital spend may well be an officer of it, whether or not they sit on its board and whether or not they have ever been in the country.

So the population carrying this duty inside a UK group is usually wider than the group believes, and identifying it is the first task rather than an academic one. If nobody has mapped who your Australian officers actually are, that is the gap.

2. Due diligence is a duty, not a defence

The second error is the one that follows from British instinct, and it runs the wrong way round.

In the UK, section 37 of the Health and Safety at Work etc. Act 1974 makes a director or manager liable where an offence by the body corporate was committed with their consent or connivance, or was attributable to their neglect. It is reactive by design: there is an offence by the company, and then the question is whether the individual's conduct contributed to it. Due diligence, in British usage, is generally something a defendant demonstrates after the fact.

Section 27 inverts that. Due diligence is the duty itself, owed continuously, and the question is not whether you failed to prevent something but whether you took the six kinds of reasonable step while the business was running. An officer can be in breach on a day when nothing has gone wrong, because the breach is the absence of the steps rather than the presence of harm.

For a board that is the practical difference. The UK question is "what did you do about it?" The Australian question is "what were you doing all along?"

3. You can be convicted even if the company is not

The third point is explicit on the face of the Act, and it surprises almost every foreign board.

Section 27(4) provides that an officer "may be convicted or found guilty of an offence under this Act relating to a duty under this section whether or not the person conducting the business or undertaking has been convicted or found guilty of an offence."

The officer's duty is therefore free-standing. A regulator can decline to proceed against the subsidiary, or fail against it, and still proceed against an individual. Where industrial manslaughter offences have been introduced, as they have in a number of Australian jurisdictions, the stakes at individual level rise further, and our note on industrial manslaughter in Australia covers that separately.

The governance consequence is that officer assurance cannot be routed solely through the company's compliance reporting. The individual needs their own evidence.

4. "Verify" is a separate limb from "ensure"

The fourth error is the subtlest and the one that actually loses cases.

Limbs (c), (d) and (e) require the officer to ensure the business has appropriate resources and processes. Limb (f) then requires the officer to verify their provision and use. If verification were implied by ensuring, limb (f) would be redundant, and it is not.

In practice this is the difference between receiving a report and testing it. An officer who reads a quarterly dashboard showing all actions closed has arguably satisfied (d). An officer who has asked for the underlying evidence on a sample of those actions, or has walked a site, or has commissioned an independent check, has evidence of (f). Groups that rely on management assurance alone have built a system that looks compliant from the inside and has no independent verification layer at all.

This is the strongest argument for periodic independent health and safety audits in an Australian context. Their value is not only the findings. It is that they are the artefact that evidences limb (f) for a named individual, which internal reporting by definition cannot.

What an officer should be able to produce

Limb	Weak evidence	Evidence that stands up
Knowledge	"We get a board paper"	Dated briefings, training, record of legal updates received
Understanding of operations	Org chart and revenue	Site visits, a risk profile the officer can describe unprompted
Resources and processes	Budget line exists	Resourcing decisions minuted against identified risks
Incident information	Incidents reported annually	Timely escalation criteria, with evidence of response times
Compliance processes	A policy suite	Processes named, owned and demonstrably implemented
Verification	Management assurance	Independent audit, sampled evidence, officer-level questions on record

If an officer cannot produce something in the right-hand column for each row, the duty is not being discharged, whatever the safety performance happens to look like.

The harmonisation trap

One jurisdictional point that catches groups out, because "Australia" is not one regime.

Most Australian jurisdictions adopted the model work health and safety laws, which is why section 27 reads the same in so many places. Victoria did not. It continues to operate its own occupational health and safety legislation, which WorkSafe Victoria sets out in its guidance on the OHS Act and Regulations, and the officer duty is not framed in the same terms there. Regulators also differ in approach and in published guidance, with SafeWork NSW and WorkSafe WA each maintaining their own.

So a group with Sydney, Melbourne and Perth offices has more than one officer-duty question, and a single Australian briefing to the board will be wrong about at least one of them.

How this should change the group's reporting

The duty is individual, which means group reporting designed for corporate assurance does not automatically serve it. Three changes make the difference.

Identify the officers, in writing, and tell them. People cannot discharge a duty they do not know they hold, and the mapping exercise frequently surfaces group executives nobody had considered.

Give them information in a form that evidences the limbs, not just the position. Dated, specific, and traceable to the underlying record, so that the officer can later show what they knew and when. Holding that in a system rather than in a sequence of slide decks is where health and safety consultants and software are worth more in combination than either alone, because what an officer needs is a retrievable trail rather than a current status.

And build in an independent verification cycle, because limb (f) cannot be satisfied by the people being verified. Where the internal function is thin, the competent person arrangement is the place to start, and it needs to be someone who can read the Australian position rather than apply the UK one.

Where Arinite fits

Arinite has spent 15+ years giving parent companies evidence their officers can rely on in jurisdictions they do not sit in. We support 1,500+ businesses in 50+ countries and protect 100,000+ employees, with 95%+ client retention. Our health and safety consultants work extensively with legal, insurance, finance and banking and IT and software clients, which covers most of the foreign-owned office footprint in Sydney and Melbourne.

Our global health and safety consultants work with locally qualified Australian practitioners so the advice reflects the jurisdiction the entity actually sits in, and our international health and safety consultants can tell you how your Australia entities compare with the rest of the group.

Start with the list. Write down who your Australian officers are, then ask each of them what they could produce against limb (f). Then book a free gap analysis and we will tell you in one call whether the answers would hold.

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