How Investments In Safety Could Get Your CEO Fired

Defined by the Financial Times as “a very broad concept that addresses many and various topics such as human rights, corporate governance, health and safety, environmental effects, working conditions and contribution to economic development”, the topic of CSR, or corporate social responsibility, is big news.

It’s the health, safety, and working conditions part of the definition that bothers me.

Not that health and safety are included in the definition, but because researchers at Notre Dame found that investments in CSR tend to “amplify the negative relationship between financial performance and CEO dismissal” amongst Fortune 500 companies. Profitable companies who invest in CSR are favored and companies who invest in CSR and perform poorly (financially) end up looking for new CEOs, in no small part due to their CSR investments. In the researcher’s words, the under-performing CEOs have a “greater risk of dismissal” as a result of their CSR emphasis.

What can EHS pros learn from this study?

We must quantify our value in every meeting, conversation, presentation, and in all corporate literature. If we give the perspective that safety and health investments are done only because it’s “the right thing to do” or “people are our number one resource,” we may unintentionally “amplify the negative relationship” and be pushed aside, along with the CEO. Is it as simple as this study makes it? I don’t think it is…but it’s a perspective we should pay attention to.

Here’s a link to the research paper.

What’s been your experience with CSR?

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