22 Jun What is due diligence in workplace health and safety?
For many New Zealand business owners, health and safety responsibilities go far beyond simply having policies in place. Under the Health and Safety at Work Act 2015 (HSWA), company directors, business owners, and senior leaders have a personal legal responsibility to actively ensure their business is managing workplace risks effectively.
This responsibility is known as due diligence.
Understanding due diligence is critical for anyone who influences business operations, because failing to meet these obligations can result in significant penalties, reputational damage, and increased risk to workers.
What is due diligence?
Due diligence is the legal duty of business officers (such as directors, owners, CEOs, or senior managers) to take reasonable steps to ensure their business complies with health and safety laws.
In practical terms, this means leaders must:
- Understand workplace hazards and risks;
- Stay informed about health and safety matters;
- Ensure appropriate resources and processes are in place;
- Verify that safety systems are working;
- Monitor compliance; and
- Promote a safe workplace culture.
Due diligence is not something that can be delegated entirely to a health and safety manager or external consultant – business leaders must remain actively involved.
Who has due diligence responsibilities?
In New Zealand, “officers” of a business or undertaking (PCBU) typically include:
- Company directors;
- Business owners;
- CEOs;
- Senior executives;
- Trustees; and
- Partners.
These individuals hold legal accountability for ensuring effective health and safety governance.
What does due diligence involve?
1. Understanding legal obligations
Business leaders must understand their responsibilities under HSWA and associated regulations.
2. Knowing workplace risks
Leaders should be aware of the specific hazards in their industry, whether it’s construction, manufacturing, agriculture, retail, or office work.
3. Providing resources
This includes:
- Training;
- PPE;
- Safe Operating Procedures (SOPs);
- Hazard management systems;
- Incident reporting processes; and
- Emergency planning.
4. Monitoring performance
Regularly reviewing:
- Hazard registers;
- Incident reports;
- Audit findings;
- Corrective actions; and
- Staff feedback.
5. Verifying Systems
It’s not enough to assume systems are working – leaders must actively check.
Why is due diligence important?
Effective due diligence helps businesses:
- Reduce injuries and incidents;
- Improve legal compliance;
- Protect leadership from prosecution;
- Strengthen workplace culture;
- Improve worker trust; and
- Lower long-term operational costs.
Poor due diligence can expose businesses and individuals to serious financial and legal consequences.
Common mistakes businesses make
Many businesses fall short by:
- Treating health and safety as paperwork only;
- Failing to review systems regularly;
- Not acting on known hazards;
- Delegating all responsibility without oversight;
- Ignoring worker concerns; and
- Lacking documented evidence.
In health and safety, if it isn’t documented, it may be difficult to prove compliance.
A practical example…
Scenario: A manufacturing business has machinery hazards.
Due Diligence Actions:
- Directors ensure machine guarding is installed;
- SOPs are documented;
- Staff are trained;
- Maintenance schedules are followed;
- Incident reports are reviewed monthly; and
- Safety meetings are held regularly.
This demonstrates active governance rather than passive oversight.
How Hasmate supports this…
For small and medium businesses, keeping due diligence manageable can be challenging. Hasmate simplifies this process by helping businesses:
- Centralise hazard registers;
- Track incidents;
- Monitor corrective actions;
- Manage SOPs;
- Record training;
- Maintain compliance documentation; and
- Prepare for audits.
By consolidating health and safety management into one simple system, Hasmate helps business leaders stay informed and demonstrate active due diligence.
It is about leadership accountability. It requires business owners and officers to actively participate in health and safety management, not simply delegate it.
For businesses, strong due diligence is essential for legal protection, worker safety, and long-term business success.
If you are responsible for leading a business, understanding and demonstrating due diligence is not optional – it is a core part of running a safe and compliant workplace.
Other suggested articles:
- How often should you review health and safety documentation?
- Training with Safe Operating Procedures
- Safe Operating Procedures to purchase
- What Should A Health and Safety Budget Include?
Please contact us if you would like to discuss.