Leadership: The Frontline of Psychosocial Risk Management

To say that leadership is important comes as no surprise to anyone who has had anything to do with people management in organisations. Leaders have an outsized influence on people’s experience of work, company culture, mental health, and risk management. This is why effective leadership is consistently identified as a core area of capability development in organisations both large and small.

But what is the role of leadership when it comes to psychosocial risk management? With an increased focus on the positive duty of organisations to manage and mitigate psychosocial risk in accordance with WHS regulations, organisations are continuing to look for best practice approaches, and leadership is emerging as a crucial factor.

Leadership as a frontline defence

Leadership is incredibly important when it comes to determining people’s experience of work. Whether it's employee morale, engagement, or mental health, leadership for better or worse has a significant impact. This is not all that surprising when you consider we spend roughly 40 hours each week engaged in work, and within that environment, people report to leaders who hold more power and status.

How leaders treat their employees, respond to their needs, check in, support, and consult with team members has a powerful influence on team culture and the broader workplace environment.

With this in mind, it's no surprise that leaders play a central role in ensuring organisations are managing psychosocial risk. On the one hand, leaders are tasked with a positive duty to identify and manage psychosocial hazards within their teams; it’s part of their core responsibilities. On the other, they are also best placed to notice the early signs of stress and strain within their teams and are often in the best position to respond.

This highlights that it’s not only senior executives who have a role to play. Local team leaders and frontline managers are the ones most likely to observe day-to-day realities, respond in real time to issues raised, and foster the conditions that support psychological safety and wellbeing. They are the people closest to the work and the team and that proximity gives them both the opportunity and the responsibility to act.

Managing Psychosocial Risk in Real Time

So, what do leaders need to do this well? While technical understanding of psychosocial hazards is helpful, the most effective leaders demonstrate the following capabilities:

1. Relational Awareness and Communication

Leaders must be attuned to how people are experiencing their roles. This means listening actively, checking in regularly, and creating space for open dialogue. A psychologically safe team starts with a leader who communicates with empathy, consistency, and transparency.

2. Situational Insight and Responsiveness

Leaders need the ability to scan their environment for stress signals: high workloads, role conflict, unclear expectations, or signs of team tension. Recognising the early signs of psychosocial hazards and acting on them, even when evidence is ambiguous is essential to proactive risk management.

3. Confidence in Taking Local Action

Too often, leaders escalate every issue to HR or rely on formal processes that may be too slow or removed from the team context. Leaders must feel empowered to address interpersonal issues, clarify work demands, adjust roles, or facilitate team based problem solving. Local action is often the most timely and impactful response.

Going Beyond the Surface: The Need for Good Design Thinking

While each of the three capabilities outlined above is critical on its own, their true power lies in how they come together. When leaders bring relational awareness, situational insight, and the confidence to act locally, they can do more than just respond to problems as they present. They can understand underlying causes and take effective action.

Too often, leaders fall into the trap of managing symptoms rather than identifying causes. They respond to complaints, adjust workloads, or intervene in conflicts without pausing to explore why these issues are surfacing in the first place. Effective psychosocial risk management requires more than reactive problem solving. It requires good design thinking.

Leaders must be able to get beneath the surface of team dynamics to uncover what’s driving stress, disengagement, or strained relationships. Is the source of tension actually unclear role boundaries? Is a performance issue being driven by poor work design or inadequate support? Is low morale rooted in unresolved past conflicts or misaligned values?

Good leaders ask these questions. Great leaders make time to explore the answers.

This mindset is essential to effective psychosocial risk management. It allows leaders to not only mitigate immediate risks but to shape work environments that are better designed, more supportive, and ultimately more sustainable for the long term.

‍