Tying Safety to Financial Performance

Feb. 9, 2005
"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.

Sponsored Recommendations

Free Webinar: ISO 45001 – A Commitment to Occupational Health, Safety & Personal Wellness

May 30, 2024
Secure a safer and more productive workplace using proven Management Systems ISO 45001 and ISO 45003.

ISO 45003 – Psychological Health and Safety at Work

May 30, 2024
ISO 45003 offers a comprehensive framework to expand your existing occupational health and safety program, helping you mitigate psychosocial risks and promote overall employee...

DH Pace, national door and dock provider, reduces TRIR and claims with EHS solution

May 29, 2024
Find out how DH Pace moved from paper/email/excel to an EHS platform, changing their culture. They reduced TRIR from 4.8 to 1.46 and improved their ability to bid on and win contracts...

Case Study: Improve TRIR from 4+ to 1 with EHS Solution and Safety Training

May 29, 2024
Safety training and EHS solutions improve TRIR for Complete Mechanical Services, leading to increased business. Moving incidents, training, and other EHS procedures into the digital...

Voice your opinion!

To join the conversation, and become an exclusive member of EHS Today, create an account today!