• Clare Hopkins


Here's why Corporate Social Responsibility (CSR) is the enabler to ensure that assessing, preventing and promoting psychological safety is embedded in business strategies long after the pandemic

With the impending release of the new ISO 45003 for managing psychological health in the workplace this year and the increased awareness of the term psychological safety, it's great to see more focus on what is the biggest occupational health hazard of our generation - mental health.

However, whilst organisations like the HSE has been providing great free resources for a number of years to help employers to assess and manage psychological stress in the workplace, and there's been numerous research studies into workplace wellbeing, which have all evidenced the benefits to businesses and economies of prioritising employee wellbeing. It's taken a pandemic to really drive this message home to business owners, yet before the pandemic hit in March 2020 the HSE released their annual statistics for 2019/20 on work related stress, anxiety and depression in the UK. Which revealed 17.9 million days were lost due to work related stress, anxiety and depression - an increase of 2.3 million days from the previous year.

I've always found it a shame how most people wait until they they reach an existential crisis before they take action to improve the quality of their life, because as far we know we only get one shot at life. I learnt the reasons why when I did my coaching training and it's why the same thing happens in the business world as ultimately businesses are run by people! One key reason is simply because we all have our own view of the world, meaning we see things as we are not as they actually are. So whilst many leaders 'think' all is well in their business and that they have things covered from their perspective, when compared with the 'actual' employees experience this is very often poles apart. In fact there is research which evidences the great divide of perspectives between management and their staff within organisations. As someone who has worked HR I have also experienced this first hand!

As more people return to work I feel there is a real risk that when this pandemic quietens down the urgency to prioritise employee wellbeing will quieten down to business as usual. So there is a real need to capitalise on the current increased awareness of the importance of psychological safety to find a long term way to integrate wellbeing into organisational strategies and policies.

Corporate Social Responsibility (CSR)

The term was officially coined in 1953 by American economist Howard Bowen in his publication Social Responsibilities of the Businessman, and is essentially about a business model that ensures a business is socially accountable to itself, its stakeholders, and the public.

However, it wasn't until July 2018 when this came into law with the new corporate governance reporting requirements that came into effect in the UK with The Companies (Miscellaneous Reporting) Regulations 2018, with new requirements applied to company reporting on financial years starting on or after 1 January 2019, with the first actual reporting under the new regulations started in 2020.

The legislation requires companies who meet 2 of 3 criteria (turnover above £35m, balance sheet assets above £18m and/or more than 250 employees) to report on their compliance with Section 172 (1) of The Companies Act 2006. Which essentially defines company success as "promoting the interests of shareholders whilst taking account of a diverse group of stakeholders." This means company directors are being held more accountable for ensuring that they don't just make decision/take actions in the best interest of shareholders, but they must they must also ensure they make decisions/take actions in the best interests of all their stakeholders which includes their employees.

However, this criteria means that for a large majority of the 5.9m private SMEs in the UK (95% micro businesses 0 -9 employees, 4% small businesses 10 - 49 employees, and 1% medium businesses 50 - 249 employees) this legal reporting requirement for CSR is unlikely to apply. BUT there is nothing stopping more SME owners from ensuring they have a CSR policy in place to show how they promote the interests of both shareholders and all stakeholders, and publicly demonstrating their commitment to being an ethical employer to internal and external stakeholders.

What does Section 172(1) state?

Duty to promote the success of the company - a director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:

  1. the likely consequences of any decision in the long term;

  2. the interests of the company's employees;

  3. the need to foster the company's business relationships with suppliers, customers and others;

  4. the impact of the company's operations on the community and the environment;

  5. the desirability of the company maintaining a reputation for high standards of business conduct; and

  6. the need to act fairly as between members of the company.

The rise of values led investors, consumers and employees

We are increasingly seeing how people are making more conscious decisions on which companies they choose to invest their money and time in, and they are actively researching companies who align with their values and who they feel act ethically. In fact I would say that the pandemic has increased this trend, as I have heard people state in wellbeing webinars over the last 12 months that they have made lists of companies who have supported their staff through this pandemic, as these will be the companies they will choose to buy from/work with in the future.

"People want to work for, buy from, and invest in businesses they believe in." B Corp

We are also seeing more organisations creating a movement in the business world so that business becomes a force for good, as we look to eradicate the old paradigm of profits before people and establish the new paradigm of putting people first, and in doing so acknowledging the business worlds responsibility to humanity.

Here are just some organisations leading the way:

The B Corp was established in 2006 in the USA but is now a global movement of to ensure business is a force for good by promoting a new kind of business that balances purpose and profit. The certification process requires business owners to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment.

The Maturity Institute (MI) is a not-for-profit, professional development body established in 2012 and the are working to shift conventional business leadership from prioritising shareholder value and profit maximisation above all stakeholder value. They are doing great work getting to the root of tackling the old paradigm by working directly with investment organisations and financial institutions to show how investing in organisations that have good CSR are better investments in the long term. They work with organisations to help them establish good corporate governance with their 10 Pillars of Maturity, and number 2 is all about really valuing employees, as it's evidenced when employees see a direct connection between their contribution and the value of the organisation they are more likely to be highly engaged and experience wellbeing at work.

Investors in People (IiP) has been established since 1991, originally owned by the UK Government and now a Community Interest Company, provides the standard for best practice people management, which is a great framework to ensure that an organisation achieves success through the focus on developing its people. Having implemented this framework in two organisations I saw first hand the positive impact this has on the culture, employee wellbeing and business success.

The introduction of the new ISO 45003 is also a great addition to this movement as previously there was a lack of psychosocial risks evaluation programs and many businesses have seen this approaching psychological safety as too complicated. However the new standard has a clear structure to enable employers to practically cultivate a psychologically safe working environment.

Strategically integrating psychological safety as part of your CSR policy

There are two dimensions to any CSR policy which focuses on socially responsible practices related to:

  • external stakeholders such as suppliers, local communities and the environment; and

  • internal stakeholders such as all levels of employees.

The European Commission (EC) and European Agency for Health & Safety at Work (EAHSW) established some time ago that there is a strong business case for the strategic importance to link occupational health and safety with CSR.

They see CSR as a strategic platform to ensure psychological safety is taken seriously by business leaders as part of their overall approach to occupational health and safety, which would ensure that employee wellbeing is part of ongoing strategic business practices. This would mean psychosocial risks are measured, reviewed and reported on par with all other health and safety risks. Which as mentioned in one of my previous blogs means employers can be drivers of societal change for mental health, as when organisations address internal psychosocial risks their employees will experience increased wellbeing and less likely to add external pressure to an already struggling health care system.

Embedding wellbeing

I fondly recall working with a great Investors in People (IiP) assessor when I was leading projects to implement the IiP framework in some SMEs. He said that what when carrying out the IiP assessment for the accreditation he would take on board that some people management practices were still new, so what he was looking for was evidence that these practices, supporting policies and processes were sticking.

What he meant by this was, when interviewing people across all levels in an organisation he was looking to see if they were: aware of the policies and processes, had any experience of them, if they were able to access them and what they understood their role was in using/following them. This would evidence that although fairly new the people management practices were being applied and embedded into the organisational culture for the long term, and not just written for the IiP process then filed somewhere only certain people would knew about.

I feel this is what we need to be looking at in organisations who may have taken a knee jerk/short term reaction to the pandemic, by quickly getting policies implemented and/or training employees up to be Mental Health First Aiders (MHFA) and business leaders thinking that this will be a sufficient and practical way to address mental health in the workplace in the long term.

As whilst having policies updated/put in place to support mental wellbeing is a great step - unless all employees are aware of any new policies, which would hopefully have been through meaningful consultation, and the measures are actually put in place across the organisation with management buy in, then it will not ensure psychological safety becomes part of the culture in the long term.

Also whilst investing in MHFA training is fantastic and has proven to raise peoples awareness of mental health and help remove the stigmas around mental health, this training is just for MHFA's to be a point of contact for someone already experiencing mental ill health to support and signpost them to professional. This is just addressing one layer of intervention to support people experiencing mental ill health, it does not address preventing mental ill health and promoting mental wellbeing by getting to the root cause of work related stress, anxiety and depression, of which 55% of all working days lost are due to work related stress.

Plus, there is increasing concern about the mental health support available for MHFA's, because if they are based in an organisation which does not have a culture of psychological safety, they are fire fighting in a challenging work environment. Who will then support the MHFA's?

Next steps

I hope I have given enough of a business case here for weaving wellbeing into the CSR policy to ensure it sticks! As the short term tick box approach to wellbeing is exposed and employees, consumers and investors are increasingly investing time and money in organisations that are committed to being socially responsible.

Create/review your CSR Policy - I would strongly recommend you do this as part of a working group with employees of different levels and departments across your business.

  • NOTE: Having clear organisational vision and values will be required first in order to ensure this policy supports your overall business aims.

Clearly define how your business will act in the best interests of its employees (Section 172 (1) b of the Companies Act 2006) to include:

  • setting out clear roles & responsibilities for managing psychosocial risks in the business;

  • establishing how employees will be included in the identification, assessment and effective management of psychosocial risks in the business;

  • identifying what policies, procedures and reporting structures are needed to address psychosocial risks in the business going forward; and

  • establishing the behaviours and skills needed to cultivate a psychologically safe working culture to support the implementation of policies and procedures

  • leading to identification of management competencies and employee training needs with clear measurable learning outcomes (NOTE: shifting behaviours is not through a one off training course - these competencies need to be included as part of performance management and measured in employee surveys)

If you are a small business and would like to discuss how I can work with you to cultivate psychological safety in your business, just book an informal chat here :https://metanoialifestyle.as.me/your-wellbeing-dept or email me at clare@yourwellbeingdept.co.uk

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