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Companies that Ignore Worker Safety May Win for a While but Could Face Investor Ire

  • Date: Wed, Aug 17, 2022

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By Neanda Salvaterra,

Pictured: Mark Pagell, Chair in Global Leadership and Full Professor of Sustainable Supply Chain Management

August 15, 2022 - Investors are increasingly scrutinizing how board directors oversee worker safety matters, especially following the Covid-19 pandemic, which highlighted society-wide inequities. Companies that trade worker safety for better immediate financial performance may face a stakeholder pushback and an uncertain regulatory future, according to market watchers.

Mark Pagell is the chair in global leadership and a professor of sustainable supply chain management at the University College of Dublin in Ireland. He co-wrote a research paper published in 2020 looking at the relationship between worker safety and company performance. Pagell and fellow researchers looked at more than 100,000 Oregon-based organizations over a span of 25 years. Some of the businesses in the study were large and publicly traded. However, most of the companies in the sample group were medium-size to small businesses, the latter with 10 or fewer employees, in sectors such as agriculture, natural resources, manufacturing, technology and services.

The team examined the overall cost and number of times employees filed for workplace-related disability, defined as when a worker “suffers temporary disability … requiring three or more days off work, or the expectation of permanent disability.” The data was gleaned from the Oregon Department of Consumer and Business Services, the state worker safety regulatory agency, and the U.S. Bureau of Labor Statistics Quarterly Census of Employment and Wages.

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