A board may receive detailed reports on physical workplace injuries, financial risk and operational resilience yet know surprisingly little about the conditions in which its people work. Excessive workloads, poor supervision, bullying, sexual harassment, inadequate support and poorly managed change do not always appear in the conventional board dashboard. That does not make them any less consequential.
Psychosocial risk is therefore both a workplace health and safety issue and a test of governance effectiveness. The question for directors is not whether the organisation has a wellbeing program. It is whether management can demonstrate that reasonably foreseeable work-related hazards are identified, controlled and regularly reviewed.
An old problem with a more explicit name
“Psychosocial” describes the interaction of psychological and social factors. The term emerged in academic usage in the late nineteenth century, long before current work health and safety legislation. In the workplace, psychosocial hazards concern conditions arising from how work is designed or managed, the environment in which it occurs, and workplace relationships or behaviour, which may cause psychological or physical harm. [1, 2]
Workplace stress, excessive demands, mistreatment and fear of speaking up are not novel phenomena. What has changed is their formal recognition as occupational hazards, the specificity of legal duties and the evidence available about the consequences of prolonged exposure. It would nevertheless be an overstatement to assert, without comparable longitudinal evidence, that workplaces as a whole are more toxic today than in previous decades.
Modern technologies, hybrid working arrangements, surveillance, frequent restructuring, demanding customer interactions and performance incentives may create or compound exposures. Equally, some changes may reduce risks. The important question is how the actual work is performed, not whether it fits a fashionable narrative about modern employment.
The legal framework: a national duty, but not a uniform statute
Across Australia, work health and safety obligations encompass psychological as well as physical health. The Commonwealth, NSW, Queensland, South Australia, Tasmania, Western Australia, the ACT and the Northern Territory operate versions of the model WHS framework. Relevant duties arise under their respective Acts and Regulations, as amended. Victoria instead operates under the Occupational Health and Safety Act 2004 (Vic), supplemented by the Occupational Health and Safety (Psychological Health) Regulations 2025, which commenced on 1 December 2025. Organisations operating across borders need a jurisdiction-specific obligations map. [3–6]
In model-WHS jurisdictions, a person conducting a business or undertaking (PCBU) must, so far as reasonably practicable, eliminate health and safety risks or, if elimination is not reasonably practicable, minimise them. The model regulations expressly address psychosocial hazards and risks. This requires consideration of work design, workload, workplace interactions, exposure and the adequacy of controls; it is not discharged merely by offering counselling or resilience programs. Relevant worker consultation, including consultation with health and safety representatives where applicable, is central to the risk-management process. [3, 4]
The Safe Work Australia Model Code of Practice: Managing Psychosocial Hazards at Work provides substantial practical guidance. However, a model code does not automatically have legal effect everywhere: its status, any local code and local regulatory amendments should be checked. NSW, for example, has strengthened its requirements through the Work Health and Safety Regulation 2025. [4, 5]
Under section 27 of the model WHS Acts, officers must exercise due diligence to ensure the PCBU complies with its WHS duties. Due diligence includes keeping informed, understanding operations and hazards, ensuring suitable resources and processes, receiving and responding to risk information, ensuring compliance processes exist, and verifying that resources and processes are actually used. The duty is personal, although its practical discharge is proportionate to the officer’s role and circumstances. [7]
Victoria should not simply be described as another “section 27 jurisdiction”. The Victorian Act has distinct employer and officer-liability provisions and requires a separate legal analysis. Similarly, offence categories, fines, imprisonment and industrial manslaughter provisions differ across jurisdictions and change over time. A published article should not nominate a single national maximum penalty.
Further intersecting obligations include the Sex Discrimination Act 1984 (Cth) positive duty to take reasonable and proportionate measures to eliminate specified unlawful conduct as far as possible, relevant Fair Work Act 2009 (Cth) obligations, anti-discrimination laws and the statutory protections for eligible whistleblowers. These regimes overlap without being interchangeable. A potential breach of directors’ duties under section 180 of the Corporations Act 2001 (Cth) also requires analysis on its facts; a psychosocial WHS breach does not automatically establish that separate contravention. [8, 9]
Why this is material to the board
Safe Work Australia’s 2026 statistics record approximately 17,900 serious workers’ compensation claims classified as mental health conditions in 2024–25 (preliminary): 12.2% of all serious claims. Median working time lost was 34.8 weeks and median compensation paid was $68,600. Those statistics concern accepted serious compensation claims, not every worker experiencing a psychosocial hazard, and should not be used as a direct measure of workplace prevalence. Nevertheless, they demonstrate the seriousness and potential duration of psychological injury. [10]
Regulatory enforcement is real. In December 2025 the Department of Defence pleaded guilty and was fined $188,000 following a Commonwealth WHS prosecution over its failure to manage psychosocial risks associated with a Royal Australian Air Force technician’s death. Comcare identified it as the first conviction of its kind for a Commonwealth employer. The case illustrates how failure to address foreseeable risks in work processes can have grave consequences; it should not be mischaracterised as a prosecution or conviction of individual directors. [11]
The board’s exposure also includes reduced organisational capability, staff turnover, lost institutional knowledge, legal costs, reputational damage and impaired service delivery. But governing psychosocial risk should not be framed solely as protecting directors from liability. Protecting people from reasonably foreseeable harm is itself a fundamental obligation.
Look beyond the engagement survey
An annual engagement survey may be useful, particularly when designed and interpreted carefully, but averaged scores can conceal concentrated risks within particular teams. A low complaint count is similarly ambiguous: it may indicate few issues, or an environment where workers have little confidence that speaking up is safe. Conversely, increased reporting may reflect greater trust in reporting systems rather than deteriorating conditions.
Boards should ask for triangulated, proportionate and privacy-conscious evidence, including:
Hazard and control information: material psychosocial hazards by work activity or business unit, controls, owners, overdue actions and evidence of control effectiveness.
Work-design indicators: excessive hours, staffing capacity, overtime, role clarity, resourcing during restructures, and fatigue or workload hotspots.
Workforce signals: carefully interpreted trends in turnover, absence, grievances, exit themes, worker consultation and independently administered surveys.
Harm and regulatory outcomes: notifiable events where applicable, accepted injury claims, material litigation, regulatory engagement and remediation progress.
Escalation and culture: aggregated themes from complaints, speak-up channels, sexual harassment reports and qualifying whistleblower disclosures, with appropriate confidentiality protections.
No single indicator proves psychological safety, and metrics should be disaggregated only to the extent consistent with privacy, confidentiality and statistical reliability. Employee Assistance Program utilisation is especially difficult to interpret: it can reflect improved access and trust as well as unmet support needs. Small counts and apparently anonymised narrative details may identify individuals.
Whistleblower protection obligations require particular care. The Corporations Act protects the identity of an eligible whistleblower and information likely to identify them, subject to defined exceptions. Not every workplace grievance qualifies for those protections. Board reports should therefore communicate systemic themes and remediation through controlled processes, rather than circulate incident narratives. There is no universal statutory “five-person anonymity rule”. [9]
A practical board oversight framework
One useful way to move beyond box-ticking is to ask management to demonstrate the relationship between policy, practice and experience: what is required on paper; what work actually looks like; and what workers say happens when they raise concerns.
A board or appropriately mandated committee could structure its reporting around six questions:
1. Exposure – Where are the most material hazards, and how were they identified with the people performing the work?
2. Prevention – What has changed in work design, staffing, supervision, systems or behaviour to eliminate or minimise the risks?
3. Effectiveness – What evidence shows controls are operating, and which assessments have been independently challenged?
4. Escalation – What issues reach the board promptly, including serious cultural concerns, unresolved complaints and regulatory action?
5. Change – How are psychosocial risks assessed before restructures, major technology deployments, incentive changes and other significant decisions?
6. Accountability – Who owns remediation, what are the deadlines, and what happens where a high-performing executive repeatedly breaches conduct standards?
A material-risk dashboard should highlight exceptions, trend changes and management action – not overwhelm directors with volumes of human resources data. Its contents, reporting frequency and escalation thresholds should reflect the entity’s scale, sector, operations and risk profile. Responsibility may be shared between a risk, audit, people and culture or WHS committee, but the full board should retain visibility of material exposures and assurance gaps.
Boards should also examine incentives. Unrealistic targets, understaffed operating models or reward schemes that tolerate harmful behaviour may undermine stated workplace policies. Changes to remuneration metrics can sometimes help, although poorly designed targets – such as rewarding low complaint numbers – may perversely discourage reporting.
Effective oversight does not require directors to investigate individual complaints or access sensitive medical information. It requires them to challenge systemic risk, insist on timely escalation and verify that management responds appropriately. Periodic independent review may be warranted where risks are material, information is inconsistent or organisational trust is low.
From box-checking to genuine oversight
The fundamental shift is from asking whether an assessment, policy or training course has been completed to asking whether the workplace has become safer as a result. Directors should expect management to show what has changed, why those controls were chosen, how affected workers were consulted and whether the controls are working.
Psychosocial hazards may be difficult to observe, but they are not beyond the reach of effective governance. When boards treat them with the rigour applied to other significant operational risks – while preserving dignity, confidentiality and procedural fairness – the invisible becomes more intelligible and actionable.
Governance in Action Pty Ltd can assist clients with board reporting on psychosocial hazards and risks.
David Cantrick-Brooks FGIA FCG, Principal & Director of Governance in Action Pty Ltd, would be pleased to assist with enquiries. Please feel free to reach out via LinkedIn or via gia.net.au.
AI-assisted tools and techniques were used here to support the research, drafting and editing of this publication. Responsibility for the final content rests with David Cantrick-Brooks.
Whilst accounting and legal terms and references may be contained in this publication, it does not constitute or purport to be or represent accounting or legal advice of any kind – whatsoever. Readers should seek their own independent professional advice.
Research notes and public primary sources
[1] Hayward, “The invention of the psychosocial” (2012)
https://pmc.ncbi.nlm.nih.gov/articles/PMC3627511/
[2] Safe Work Australia, WHS duties: mental health
https://www.safeworkaustralia.gov.au/safety-topic/managing-health-and-safety/mental-health/whs-duties
[3] Safe Work Australia, PCBU duties
https://www.safeworkaustralia.gov.au/safety-topic/managing-health-and-safety/mental-health/whs-duties/pcbu-duties
[4] Safe Work Australia, Model Code: Managing psychosocial hazards
https://www.safeworkaustralia.gov.au/doc/model-code-practice-managing-psychosocial-hazards-work
[5] SafeWork NSW, Managing psychosocial hazards Code
https://www.safework.nsw.gov.au/resource-library/codes-of-practice/codes-of-practice/managing-psychosocial-hazards-at-work
[6] WorkSafe Victoria, Psychological health regulations FAQ
https://www.worksafe.vic.gov.au/psychological-health-regulations-frequently-asked-questions
[7] Commonwealth Work Health and Safety Act 2011, section 27
https://www.legislation.gov.au/C2011A00137/latest/text
[8] AHRC, positive duty obligations
https://humanrights.gov.au/know-your-rights/rights-of-individuals/workplace-rights/positive-duty-sex-discrimination-act/more-about-the-positive-duty-in-the-sex-discrimination-act
[9] ASIC, whistleblower confidentiality
https://www.asic.gov.au/about-asic/asic-investigations-and-enforcement/whistleblowing/how-asic-handles-whistleblower-reports
[10] Safe Work Australia, Key WHS Statistics 2026
https://data.safeworkaustralia.gov.au/reports/key-whs-statistics-australia/latest-release
[11] Comcare, Defence convicted after RAAF worker’s death (19 December 2025)
https://www.comcare.gov.au/about/news-events/news/defence-convicted-after-raaf-workers-death
[12] AICD and King & Wood Mallesons, Governing WHS Psychosocial Risks
https://www.aicd.com.au/regulatory-compliance/work-health-and-safety-act/reporting/governing-whs-psychosocial-risks-a-primer-for-boards.html
