Ruthless Exploiters or Ethical Guardians of the Workforce? Powerful CEOs and their Impact on Workplace Safety and Health

Abstract

Allocation of resources between different stakeholders is an ethical dilemma for the chief executive officer (CEO). In this study, we investigate the association between CEO power and workplace injuries and illnesses. We use an establishment-level dataset comprising 31,924 establishment-year observations over the period 2002-2011. Our main result shows that employees at firms with structurally powerful CEOs experience fewer workplace injuries and illnesses and days away from work. We reason that CEOs may derive a private benefit from low injury and illness rates and that powerful CEOs are better at influencing employees to take workplace safety seriously. Additional analyses also reveal fewer injuries and illnesses in firms led by CEOs with expertise power. However, we find more injuries and illnesses in firms led by CEOs with ownership power. Moreover, we find that structurally powerful CEOs mitigate injury and illness differences related to headquarter proximity. We contribute with both research and practical implications on the topics of CEO power, ethics, and sustainability in general and workplace safety and health in particular.