Tying Safety to Financial Performance

"What we need to do is learn the language of CFOs," asserted John Howard, director of the National Institute for Occupational Safety and Health.

Howard, who was referring to the chief financial officers who often have the power to determine a company's safety budget, spoke at a 1-day symposium held Jan. 28 at Georgetown University in Washington, D.C.

Entitled, "The Relationship Between Firms' Safety and Financial Performance," the meeting attracted approximately 30 participants from academia, government, labor unions and industry.

Howard argued that for at least two reasons the global economy has increased the importance of translating safety values into financial value.

Other nations speak a different "safety language," Howard contended, but the values of the marketplace are universal. Secondly, the acrimonious debate concerning globalization, especially with respect to labor standards, raises the question: "How globally exportable are our labor standards?"

John Mayo, executive director of the Center for Business and Public Policy at the Georgetown University McDonough School of Business, framed the inquiry by asking whether there was a simple tradeoff between safety and profits, or whether investing in safety can add to the bottom line.

Through their research and experience, a pair of academics and business leaders then attempted to connect safety to financial performance.

Debra Golbe of Hunter College discussed the relative paucity of research into the relationship between safety and business success, as well as the challenges in linking the two.

One difficulty, she said, is that while the costs of improving safety are quite immediate and tangible, the benefits of preventing injuries often are intangible and longer-term.

"How do you measure the benefits of things that don't happen?" she asked.

In his presentation, Dave Eherts, executive director of environment, health and safety for Purdue Pharma, attempted to do precisely that. He presented the tools and methods that he has used to win the support of his company's CFO for huge increases in spending on health and safety, including his company's health and wellness program.

Next week, look for an Occupationalhazards.com article detailing the strategies Eherts employed to increase the health and safety budget at Purdue Pharma.

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