Creating Cultures That Protect People and Performance

Hall Advisory
13 minutes ago
6 min read

Workplace mental health is now a governance and organisational design issue — not an individual resilience problem. Culture, leadership behaviours and structural decisions shape risk, performance and sustainability. Boards and executives who address systemically psychosocial safety can protect their people, strengthen culture and safeguard organisational performance.

Key takeaways:

Psychological health is a governance priority
Culture and work design drive wellbeing more than wellness programs
Leaders’ own mental health and behaviour shape cultural and compliance risk
Australia’s regulatory environment now requires psychosocial risk management
Sustainable change requires systemic integration, not standalone initiatives

Many organisations still treat mental health as a human resources (HR) initiative or a wellbeing program. But that’s not enough. Mental health should be more than an optional perk. How leaders act, how work is designed, and the culture they foster directly shapes how safe and supported people feel at work every day.

Boards and executives can’t ignore the connection between culture, leadership and risk. How organisations manage these factors affect staff wellbeing, team performance and long-term resilience. This article looks at what drives psychological health at work and what leaders can focus on to build sustainable, supportive workplaces.

Why mental health is a governance priority

Mental health is no longer just an HR concern. Boards and executives play a big role in shaping the systems, structures and culture that affect how employees show up at work.

Take workload, unclear roles or conflicting priorities, for example. These pressures build up over time and can drive stress far more than resilience programs or mindfulness apps can fix. Ignoring them can lead to higher turnover, lower productivity, and even legal or reputational issues.

Chronic stress and burnout don’t just affect the individuals experiencing them — they ripple across teams. They shape culture, influence decision-making and increase organisational risk. In that sense, looking after workforce mental health is a governance issue with real consequences for performance and long-term resilience.

In Australia, recently reinforced psychosocial safety requirements mean factors like workload management, role clarity and support arrangements aren’t nice to have, they’re part of the suite of compliance obligations. Boards that don’t track or report on these risks are missing an important governance responsibility.

What is psychological safety?

While systems influence psychosocial safety, culture influences psychological safety.

Psychological safety plays a key role in how teams function. A psychologically safe environment describes a workplace where people feel safe to speak up, share ideas and raise concerns without fear of negative consequences.

To make this more practical, it's helpful to understand the four stages often used to describe psychological safety. They build on each other and give leaders a way to sense where their team sits:

Inclusion safety – people feel accepted and valued.
Learner safety – people can ask questions, try new things and make mistakes without embarrassment.
Contributor safety – people feel confident to share ideas and expand on others’ thinking.
Challenger safety – people can question decisions or raise concerns when something doesn’t seem right.

These stages show up in everyday moments, such as whether someone asks for help early in a project or stays quiet in a meeting because they’re unsure how their idea will land.

What drives workplace wellbeing (and performance)

Research shows that culture, leadership and work design have a bigger impact on employee mental health than standalone wellness programs. Structural factors shape whether people feel supported, safe to speak up, and able to focus on meaningful work.

Psychological safety is strongly linked to team performance. A two-year Google study found it was the single most important factor in high-performing teams. Safe environments tend to see stronger engagement, more creativity, closer collaboration and lower turnover. Each of these outcomes links to how comfortable people feel to bring issues forward before they escalate. But nearly 40% of Australian workers say their employer doesn’t support or they’re unsure of whether their employer supports psychological health and safety at work.

Work design influences stress and wellbeing too. Excessive workloads, unclear responsibilities and low control are key psychosocial hazards that increase burnout and reduce productivity. Employees exposed to these hazards are more likely to experience absenteeism, disengagement and health issues. One study found that 57% of US workers report negative mental health impacts due to work stress.

Workplace culture can’t solve every challenge, but it can reduce unnecessary pressure. Leadership behaviour reinforces culture and shapes the way employees experience work. As mentioned, team members often mirror the behaviours they observe of their leaders and others which are accepted by their leaders. Leaders who model transparency, fairness and responsiveness help create a supportive environment that can strengthen performance and reduce risk.

Together, culture, leadership and work design create the conditions that determine both employee wellbeing and organisational outcomes. Organisations that focus only on individual resilience could miss the systemic drivers that really matter.

Leadership pressure and the ripple effect on culture

Leaders are carrying heavier loads than ever before. Expectations are higher, markets move faster and many leaders feel they need to be “always on” to keep up. It’s no surprise that more than 56% of executives reported burnout in 2024, according to LHH’s 2025 View from the C-Suite report.

This level of strain affects more than individual wellbeing. It can influence how leaders think, relate and respond. Chronic stress can narrow focus, reduce patience and make it harder to stay present in day-to-day conversations. Over time, these habits can shift team behaviour.

You can see this play out in simple ways. Teams may rush through decisions because the leader is stretched thin. People might hesitate to raise questions if the leader seems overwhelmed. Small instances like these can build up and shape the broader culture.

Leadership pressure could also affect long-term planning. When leaders are overloaded, this can make it harder to sustain healthy performance or maintain consistent behaviour. This brings leadership sustainability into the governance spotlight.

What organisations can do: practical, systemic steps

Addressing mental health at work often requires change at multiple levels. It’s not about one-off programs, but systems, culture and leadership practices working together.

1. Lift governance and oversight

Boards and executives play a direct role in shaping psychosocial safety. Practical steps include:

Integrating psychosocial hazards into the risk register.
Making psychosocial risk reporting a standard item in board packs.
Establishing key risk indicators such as workload spikes, absenteeism or turnover to catch issues early.
Linking culture and wellbeing metrics to strategic and financial goals so they’re monitored alongside business performance.

These steps help ensure workforce wellbeing is considered in decision-making, resourcing and strategic planning, not treated as a side issue.

2. Measure what matters

Data helps organisations understand whether initiatives are working. Useful approaches include:

Using validated tools such as psychological safety surveys, the TELUS Mental Health Index, or hazard assessments aligned to ISO 45003.
Reviewing existing wellbeing programs to identify what is effective and what isn’t.
Capturing employees’ real experiences rather than relying solely on policy compliance or wellness initiative uptake numbers.

Measuring what matters provides visibility into culture, stressors and performance risks, helping leaders make informed decisions regarding mental health at work.

3. Re-design work to support sustainable performance

As mentioned, how work is structured shapes both wellbeing and outcomes. Examples of practical approaches include:

Clarifying roles, decision-making pathways and workload distribution.
Reducing meeting overload to protect focus and leader capacity.
Strengthening management capability and mental health awareness.
Embedding flexible work in ways that support autonomy while maintaining clarity, consistency and accountability.

It’s important to note that flexibility alone rarely improves wellbeing. Without aligned culture, clear expectations and supportive structures, people can still feel stressed or overloaded.

4. Support leaders as humans

To support leadership wellbeing, organisations can provide:

Executive mental health support, including confidential coaching.
Clear boundaries around availability to prevent constant overwork.
Safe spaces for leaders to speak honestly about stress and capacity.
Visible cultural modelling from the top, signalling that wellbeing and balance are valued.

As we’ve said, leadership behaviour sets the tone for teams. Supporting leaders sustainably helps create conditions where people can thrive.

What this means for boards and executives

Boards and executives influence how employees across the organisation experience psychological health. Their choices shape systems, culture and behaviours that determine whether people feel supported or stretched.

Boards set the tone by:

Asking the right questions about culture, workload and stress.
Monitoring indicators such as turnover, absenteeism and psychosocial risk measures.
Resourcing structural and cultural changes that support workforce wellbeing.

Executives translate these priorities into daily reality. Their behaviour, decisions and expectations shape how teams operate, interact and respond to pressure.

Embedding psychosocial safety into governance can:

Support better decision-making by creating open and safe environments.
Reduce organisational risk by identifying issues early.
Help retain talent, as people tend to stay where they feel supported and heard.

Treating mental health as a cultural, leadership and structural issue can help create organisations that are safer and better positioned for long-term performance.

How we can help

If you’re questioning whether your systems, culture or leadership structures support or hinder psychological safety, now might be the time to take a closer look.

Our team can help by:

Assessing psychosocial risks in line with ISO 45003.
Undertaking independent reviews and completing culture diagnostics.
Reviewing and strengthening governance and reporting frameworks.
Designing practical, sustainable organisational structures that reduce psychosocial harm.
Developing integrated wellbeing and inclusion strategies.

We work with boards, executives and teams to build cultures that protect people, strengthen performance and reduce organisational risk. Contact our team today to see how we can support you.