Abstract
AbstractThe allocation of resources among different stakeholders is an ethical dilemma for chief executive officers (CEOs). 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 between 2002 and 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 derive a private benefit from low injury and illness rates and that powerful CEOs are better at influencing employees to take workplace safety and health seriously. Additional analyses reveal fewer injuries and illnesses in firms led by CEOs with expertise power. However, increased injuries and illnesses were linked to firms controlled by CEOs with ownership power. Moreover, we find that structurally powerful CEOs mitigate injury and illness differences in relation to geographical proximity to corporate headquarters. We contribute with both research and practical implications on the topics of CEO power and corporate social responsibility (CSR) in general and workplace safety and health in particular.
Highlights
There are numerous contemporary cases where firms with powerful chief executive officers (CEOs) report abysmal safety and health figures
total case rate (TCR) is the number of work-related injury and illness cases divided with the number of hours worked multiplied with 200,000
We provide definitions of all control variables in Appendix in Table 10. t-statistics are presented in the parentheses and calculated from robust standard errors clustered at the firm-level results highlight that the relationship between CEO power and workplace injuries and illnesses depends on the power dimension
Summary
There are numerous contemporary cases where firms with powerful chief executive officers (CEOs) report abysmal safety and health figures. High-profile cases include former BP CEO Tony Hayward, former Tesla chair and current CEO Elon Musk, and Amazon chair and CEO Jeff Bezos. The attitudes of top executives are vital to developing corporate social responsibility (CSR) (Fabrizi et al 2014). In this regard powerful CEOs are interesting, since researchers in accounting, business ethics, finance, and management document that powerful CEOs behave differently than non-powerful CEOs (Adams et al 2005; Tang et al 2011; Muttakin et al 2018; Chu et al 2019).
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