Leading safely: The impact of generalist CEOs on workplace safety

Does the skillset of the CEO influence workplace safety? Yes according to this study.

In the lead-up to next week’s leadership research compendium, this study evaluated whether generalist or specialist CEOs have a greater impact on OSHA reported safety incidents (note the limitation).

Generalists are CEOs with wider industry experience (worked in more industries) whereas specialists have more direct industry/firm experience.

Note the findings with worker wellbeing and innovation and performance. Good worker well-being is good business.

Extracts:

· “General managerial skills are a crucial component of managerial human capital, encompassing a wide range of competencies that extend beyond firm-specific knowledge”

· “generalist CEOs often receiving higher compensation than their specialist counterparts [with] a positive association between general managerial ability and corporate performance”

· “generalist CEOs are more likely to drive innovation .. and implement significant organizational changes due to their diverse industry perspectives”

· “Research on workplace safety suggests that improving safety is not only a moral imperative but also carries significant economic costs and benefits. Wu et al. (2023) find that safer workplaces reduce employees’ psychological burnout, whereas unsafe workplaces are associated with job dissatisfaction and higher turnover intentions”

· “generalist CEOs are associated with lower injury and illness rates. This effect is both statistically and economically significant. Specifically, firms led by generalist CEOs exhibit 12.72 % lower rates of work-related injuries and illnesses compared to those led by non-generalist executives”

· “(CEOs) with general managerial human capital significantly contribute to the creation of safer work environments. The relation is more pronounced in firms facing financing constraints or intense market competition”

· “These CEOs improve safety outcomes by making more prudent labor investment decisions, reducing employee workloads, and maintaining high information quality”

· “our study underscores the pivotal role of CEOs’ general managerial human capital in promoting employee well-being and mitigating the potential adverse consequences of occupational hazards on firm performance”

· “Furthermore, employee safety and health significantly influence company innovation, productivity, and firm value”

· “Generalist CEOs play a critical role in mitigating value-destructive effects by prioritizing employee well-being”

· “Our study highlights the practical implications for executive selection and leadership training, emphasizing that investing in generalist leadership skills is a strategic approach to enhancing organizational performance by fostering safer workplace”

· “generalist CEOs, with their broader career options, tend to exhibit greater risk tolerance in corporate decision-making .. our study reveals a nuanced perspective: these CEOs also prioritize employee safety. This implies that their risk tolerance does not extend to workplace safety, likely due to an understanding of the financial and reputational costs tied to injuries and illnesses”

· “In essence, generalist CEOs balance strategic risk-taking with a commitment to maintaining a safe work environment, demonstrating both ambition and responsibility in their leadership”

· “These studies suggest that generalist CEOs are skilled at delivering outcomes aligned with shareholder priorities. However, our research reveals that this focus on shareholder value does not necessarily compromise employee safety”

· “our research highlights how general managerial skills foster firm innovation by positively influencing workplace safety and employee satisfaction”