What is it about?

The study examines the influence of CEO power on workplace safety and health using a dataset on factory-level injuries and illnesses (a direct measure of CSR performance). The study finds, on average, that structurally powerful CEOs are ethical guardians of the workforce. The estimates suggest that structurally powerful CEOs have 1.75 fewer injuries and illnesses per 100 full time employees in their firms. Meanwhile, founder CEOs have more injuries in their firms.

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Why is it important?

Media have portrayed powerful CEOs as ruthless exploiters, with high-profile cases such as Tony Hayward (BP), Elon Musk (Tesla), and Jeff Bezos (Amazon). Meanwhile, another powerful CEO, the late Paul O’Neill, said in a famous quote “If you want to understand how Alcoa is doing, you need to look at our workplace safety figures”. This study examines whether powerful CEOs are ruthless exploiters or ethical guardians of the workforce. This is an important topic considering human suffering. The economic and social costs are also substantial. The number of workdays missed due to injuries and illnesses is greater than the number of days missed due to industrial disputes. Approximately 3.5 million workplace injuries occur each year in the U.S. at a greater cost to society than the amount spent on all forms of cancer treatment .

Perspectives

Given the considerable economic and social costs associated with workplace injuries and illnesses, it is important to understand the underlying causes. This study explores the effects of CEO power. Our findings show that workplace injuries and illnesses and days away from work are decreasing with a structurally powerful CEO in charge. However, an association between CEO power and employee deaths was not found. The takeaway of our study is consistent with the notion that CEOs with more control protect their employees more to obtain private benefits.

Dennis Sundvik
Hanken Svenska Handelshogskolan

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This page is a summary of: Ruthless Exploiters or Ethical Guardians of the Workforce? Powerful CEOs and their Impact on Workplace Safety and Health, Journal of Business Ethics, February 2021, Springer Science + Business Media, DOI: 10.1007/s10551-021-04740-4.
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