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ORIGINAL ARTICLES

A Piece of the Boardroom Pie—An Interview Study Exploring What Drives Swedish Corporate Boards’ Engagement in Occupational Health and Safety

Lornudd, Caroline PhD; Stenfors, Terese PhD; Hasson, Henna PhD; Frykman, Mandus PhD; Sundberg, Carl Johan PhD, MD; Schwarz, Ulrica von Thiele PhD

Author Information
Journal of Occupational and Environmental Medicine: June 2020 - Volume 62 - Issue 6 - p 389-397
doi: 10.1097/JOM.0000000000001845
  • Open

Abstract

Globally, ∼ 2.78 million workers die every year because of occupational accidents or diseases, and 374 million workers experience nonfatal accidents or illnesses stemming from deficiencies in their work environment.1 These numbers come despite a substantial body of evidence showing what the risk factors are. The gap between what is known about how occupational risks can be avoided on the one hand and continuous reports of suboptimal working conditions on the other hand indicate that there are aspects that we need to better understand when it comes to how to realize effective organizational health and safety (OHS) management.

To this end, a substantive body of research has been devoted to increase the knowledge of how organizations manage and prevent unhealthy and unsafe working conditions. Most prior studies on OHS management have focused on operative management, here ranging from line managers to top management.2–6 However, much less is known about the strategic level of companies, that is, board of directors’ (hereafter: “board”) actions for OHS. This is despite the fact that it is the board that, in private companies, has the ultimate responsibility for governance. A board's responsibilities are regulated by corporate laws and include (1) establishing a strategic direction, (2) setting standards and values for operations and defining boundaries for operative management, (3) holding management accountable, (4) overseeing internal controls, and (5) accounting for owners’ and other stakeholders’ interests. Thus, the board is responsible for the legal compliance and long-term value creation in a company.

In line with this, empirical studies support that boards influence organizational outcomes.7–13 For example, board members with experience on multiple boards have been associated with firm growth,14 and the number of women on boards has been positively associated with firms’ corporate social responsibility ratings and corporate reputation.15

Based on these studies, it can be argued that boards constitute organizational bodies that influence a company's OHS management. In line with this, it has been pointed out that OHS may fall under a board's general responsibility because OHS may pose a risk to the company's long-term value creation, for example, in terms of damaged reputation and decreased financial performance.16,17

Two studies on boards and OHS have empirically investigated whether boards engage in OHS, finding that that the majority (∼80%) of large companies direct health and safety at the board level.18,19 Key areas for successful OHS governance have been proposed and include directors’ competence, the roles and responsibilities of the board, and the board's influence over certain factors such as organizational culture, strategy, performance management, internal control, and structure.20 The relevance of these areas is supported by a recent empirical study suggesting that overall, boards do consider themselves responsible for OHS, albeit with variations regarding how this responsibility is carried out.21 The same study finds that boards strive to impact how OHS is managed in two major ways: by fostering open communication in the board room, the board ensures that it is informed of potential problems, and second, by consistently putting OHS on the agenda for executive directors, the board influences top management.

Other studies provide examples of what OHS governance can entail. This includes routinely receiving OHS reports, benchmarking OHS performance, and having OHS as a meeting agenda item.16 Locke and Cross22 report that boards in high-risk industries set policies, oversee management activities, and monitor safety performance against key performance indicators. In addition, Health and Safety Executive reports18,19 find that a majority (∼60%) of large UK companies discussed OHS at least quarterly in board meetings, and 85% of the boards had a named health and safety director. Furthermore, 77% of the boards reviewed the company policies at least annually, 67% set and published objectives for health and safety, and 70% received audit and performance reports related to health and safety. These studies pinpoint which active role many boards have in OHS governance.

There are also a few studies that have empirically investigated the impact of active board OHS governance. Thompson and Tan23 propose that improvement in OHS was found when the board's understanding of safety culture increased. Also, studies of successful OHS safety programs have drawn attention to boards’ active involvement, such as advocating for and supporting OHS initiatives,24 showing visible commitment by putting safety first on the agenda and doing “safety walk arounds,”25 and setting OHS goals and holding management accountable for achieving those goals.26

In sum, some empirical studies show what boards do when they engage in OHS, but to the best of our knowledge, it remains to be investigated how board members reason concerning their drivers for engaging in OHS. Boards’ formal responsibilities and empirical studies showing that boards influence a variety of organizational outcomes indicate boards are a key group for understanding how OHS is managed in organizations. Currently, the wealth of knowledge about occupational risk factors for health and safety is underused in organizations. For example, the Swedish Work Environment Authority recently reported that as much as 90% of 2000 inspected primary- and high schools, have substandard routines for mitigating and managing risks in the work environment for the employees and the students.27 Understanding what drives board engagement in OHS may provide a previously neglected piece of the puzzle as to how organizations manage OHS by alluding to why they do, or do not, engage in OHS. Thus, the aim of the current study was to investigate why boards of directors engage in OHS and what influences their level of engagement.

METHODS

Methodological Approach

To meet the aim of the present study, we used a qualitative explorative research design with an inductive data-driven thematic approach.28 The consolidated criteria for reporting qualitative research checklist for qualitative research were applied to strengthen the current study's rigor and comprehensiveness.29

Population, Recruitment, and Participants

The selection strategy focused on recruiting private companies covering the major industries. The inclusion criteria were (1) Swedish company or Swedish subsidiary company to a multinational corporate group, (2) greater than 500 employees, and (3) officially classified in trade, construction, manufacturing, or health/social care industry.

Statistics Sweden, a government agency keeping official statistics, provided a list of all companies in the four industries. A stratified random selection process was used to avoid systematic bias in the recruitment of companies; we aimed for two to four companies per industry and two to five respondents per company to allow for data triangulation within companies. We randomly selected 5 to 10 companies within each industry to invite to the study until we had reached the targeted sample size. In total, 14 companies accepted participation: three in trade (of 19 invited); three in construction (of 19 invited); four in manufacturing (of 83 invited); and four in health/social care (of 20 invited). One trade company was excluded from the analysis since data from the single interview that was performed was too general to substantially contribute to answering the research question. The final sample included 13 companies and a total of 34 respondents; board members, chairpersons, and chief executive officers (CEOs). The interviews that were conducted with these respondents were previously the data source in another study (reference omitted for review). Thus, the data corpus is shared with another study; however the data set, that is, the instances in the data corpus with a topic relevant to the present research question, is unique to the present study. A description of the participants can be found in Table 1.

TABLE 1
TABLE 1:
Characteristics of the Respondents

Data Collection

A semistructured interview guide was developed based on a framework describing the best governance practices of corporate occupational health and safety.20 An example question for the present study is “Should a board care about OHS, and if yes—why?”. The guide was iteratively developed within the research team. The same interview guide was used for all the respondents.

The first six interviews were performed jointly by the first and fourth author to ensure that the interviews were conducted in line with the study's intentions. The fourth author conducted one further interview, and the first author conducted the remaining. Both authors are PhDs and licensed occupational psychologists with no relation to the respondents. The interviews lasted 30 to 90 minutes (mean = 49 min). Eighteen were conducted face to face and 16 by phone or Skype, based on the respondent's preferences. One respondent provided written answers to a selection of the questions by e-mail instead of through an oral interview. For the oral interviews, the interview guide was used in a flexible manner, allowing for probes and subquestions, depending of the information received. All interviews were recorded and transcribed verbatim. In the case of ambiguities in the transcripts, the respondents were contacted to clarify. The interviews were conducted in Swedish. Quotes were translated into English with the aim of maintaining the essential meaning (ie, not verbatim). After data collection, short summaries were created by the first author's overall impression of each board in relation to OHS.

All respondents provided consent to participate. All data were anonymized during transcription. Ethical approval for the study was granted by a regional ethical committee (reference omitted for review).

Data Analysis

Data were analyzed using an inductive thematic analysis and followed the procedure for thematic analysis described by Braun and Clarke28 based on the following overarching research question: Why do boards of directors engage in OHS, and what influences their level of engagement?

The software QSR NVivo 12 was used to organize the data. First, all the transcripts were read and reread by the first and second authors, both of whom noted initial ideas related to the research question. Second, the initial ideas were developed into preliminary themes by the first author and were reviewed by the second author and developed further. The revised themes were discussed between the two until a consensus was reached. A coding key was developed with a short description of each theme, and the two researchers coded all the data related to the research question using this. The coding key was presented to all the authors. Next, four of the authors engaged in a workshop exploring the relationships between the identified themes. Each theme and subtheme were compared, discussed, and revised in an iterative manner in relation to the data with the intent of keeping each subtheme distinct until analytical saturation was achieved. This iterative process resulted in a model designed with respect to how the different themes answered different parts of the research question. During the process, some alterations to certain themes were made. Two moral themes were recognized as subthemes to an overarching moral theme, and legal compliance was removed from the theme external expectations and requirements to form a theme of its own. Finally, the themes branding, attractive employer, and well-being as a prerequisite for productivity were identified as subthemes to the overarching theme of OHS being good for business.

Once the model was drafted and the themes were more fully described, we undertook a process of verifying the model by using the first author's previously summarized overall impression of the boards’ OHS work. Each summary was checked in relation to the model with the aim of detecting contradictions between the impression of a board's narratives and the model.

RESULTS

The main findings of why boards engage in OHS and what influences their level of engagement are illustrated in the model, which is shown in Fig. 1. The model illustrates a pie representing the board's total engagement for all issues. The radius of the pie illustrates the continuum of drivers for OHS engagement, and the factors that influence the level of engagement are shown as arrows outside the pie, impacting the size of the OHS slice.

FIGURE 1
FIGURE 1:
Drivers of a board's OHS engagement are added from the center along the radius of the model. The engagement allocated to OHS is influenced by factors whose impact is illustrated by the arrows. OHS, occupational health and safety.

First, the radius of the pie reflects the drivers. Five main drivers and five subdrivers were found to explain why boards engage in OHS. The drivers are organized from the most rudimentary driver for board OHS engagement in the center of the pie to the most sophisticated driver at the end of the radius or continuum. Drivers are added, rather than replaced, beginning from the center. Thus, boards that explain their engagement by the more sophisticated drivers toward the end of the radius can also be expected to react in response to the more rudimentary drivers.

Second, the factors that influence a board's level of engagement are depicted as three arrows on the top and bottom of the pie: owner's agenda, director's competence, and competing needs. These illustrate that regardless of which and the number of drivers sparking the board's engagement, there are factors that will influence the size of the OHS piece of the boardroom pie. In the following section, we discuss the main findings. Further specifications of each driver and factor with illustrative quotes can be found in Table 2  .

TABLE 2
TABLE 2:
Descriptions and Illustrative Quotes for the Drivers and Influencing Factors Boards Report in Relation to Their OHS Engagement
TABLE 2 (Continued)
TABLE 2 (Continued):
Descriptions and Illustrative Quotes for the Drivers and Influencing Factors Boards Report in Relation to Their OHS Engagement
TABLE 2 (Continued)
TABLE 2 (Continued):
Descriptions and Illustrative Quotes for the Drivers and Influencing Factors Boards Report in Relation to Their OHS Engagement

Why do Boards Engage?

Starting from the center of the pie, legal compliance is the most rudimentary driver for engaging in OHS. The driver is reactive, suggesting that boards engage in response to what they believe is required to ensure compliance with rules and regulations. Boards that limit their engagement to this driver tend to view OHS primarily as a matter for operational management. Close to the center lies another reactive driver, untoward events. This driver suggests that in addition to engaging in OHS to ensure legal compliance, boards also become engaged when negative events happen, such as accidents or OHS metrics that seriously deviate from the expected/desired ones. The next driver outlines that boards’ OHS engagement is furthermore justified by external expectations and requirements. At its core, it is a reactive driver, but it also touches upon market competitiveness and thus shows a strategic quality. It includes a reason to engage based on demands from the industry, such as when leading actors in the market push the standards for acceptable OHS performance forward, or based on “demands” from society, such as the #Metoo movement. The following driver is strategic; it comprises a belief that OHS is good for the business. This OHS driver includes three subcategories: branding, attractive employer, and well-being as a prerequisite for productivity. The final driver, which is at the end of the radius of the pie, adds moral values to the reasons why boards engage in OHS. Two subdrivers were found, focusing on the moral values toward the employees and, because of a broader sense of responsibility for the community, toward the society.

What Influences Boards’ Level of Engagement?

The findings from the current study suggest that it is not merely the presence or absence of drivers that determines if OHS will get a piece of the boardroom pie, that is, to what extent the board de facto will engage. Rather, the size of the piece of the pie seems to be influenced by three factors: director's competence and owner's agenda, which constitute a force that expands the level of board engagement, and competing needs, which constitutes a force that limits the level of engagement (arrows outside the pie). The director's competence represents OHS competence among board members; this suggests that boards in which at least one director has substantive knowledge of OHS are more likely to prioritize OHS in the boardroom. Similarly, boards are more likely to engage in OHS if they perceive that OHS is part of the owner's agenda. However, there is a persistent presence of other issues that compete with OHS for the boards’ attention. Boards are pressured for time and attention, and in circumstances where other issues are perceived as being more urgent, for example, a pressing financial situation, the engaged board will limit its focus on OHS. Thus, boards can simultaneously have a comprehensive set of drivers for engaging in OHS and at any given time still give little attention to OHS issues.

DISCUSSION

The current study contributes with a unique perspective from within the board room and shows that board drivers for OHS engagement are best understood as organized along a continuum. The continuum starts with boards that report a single rudimentary driver (legal compliance) and continues with boards reporting an additional number of drivers, each of increasing sophistication. A board's level of engagement is, irrespective of the driver(s), influenced by several factors. Some of the identified factors are possible to exert influence on, which indicates that it is possible to impact the relative size of the OHS piece of the boardroom pie.

Previous research has suggested several ways a board may engage in OHS,20 as well as examining what boards actually do in relation to OHS.16,22 The present study expands on previous research by elucidating how the variations among boards’ engagement can be understood, as assessed by the board members themselves. The findings acknowledge that boards are normally pressured for time and attention: a multitude of issues are constantly struggling to find their way onto a board's meeting agenda. In circumstances where issues other than OHS are perceived as being more urgent, for example, a pressing financial situation, even boards with high engagement will limit their time allocated to OHS. Thus, boards can have a comprehensive set of drivers for engaging in OHS and still prioritize other issues.

However, the findings simultaneously suggest that for some boards, the threshold for OHS to make its way into the boardroom is generally lower. One factor lowering the threshold is when OHS competence is represented by board members or when an influential owner holds strong values tied to employee well-being and expects the board to govern with this in mind. Likewise, boards that describe an expanded set of drivers are probably more inclined to see OHS as part of the solution to business challenges, along with financial ones, than boards that primarily act on legislation and serious accidents. Thus, the size that OHS gets of the board room pie depends on the interaction among the board's perceived drivers and influencing factors. The influencing factors suggest possible ways forward for increasing a board's OHS engagement. A director's competence is perhaps the factor most easily influenced. Our study shows that OHS competence represented in a board increases the priority given to the issue. This suggests that enhancing this competence could impact an organization's OHS management by increasing a board's ability to make a reliable and valid judgment of when OHS should be included in the top priorities for board attention. In order to do this, board member education programs as well as certifications for directors could offer basic OHS knowledge, including the relationship between work environment and employee performance, the costs associated with suboptimal work environment, and how to form effective goals and relevant key performance indicators.

The suggested continuum of drivers for OHS outlines a movement from reactive styles of board OHS governance—in which activity is triggered by drivers with a mandatory quality, such as laws or serious accidents—to the addition of a more proactive governance style, where activity is also triggered by drivers with a more optional quality, such as beliefs about OHS’ significance for the business. The first part of the continuum is aligned with previous research suggesting that avoiding or mitigating risks—such as violation of the law, injured employees, or competitive disadvantages—is the prevailing concern leading to board engagement in OHS.30 The finding that the continuum of drivers also expands to include a board's view of OHS as a means for achieving business goals or as a moral responsibility adds additional understanding to why a board will engage. Similar drivers for OHS focus have previously been identified among a sample of employers, and business and trade organizations.31 This implies a consensus across different perspectives concerning drivers for OHS engagement, which indicates that board members—in spite of their strategic role—can be receptive to the same drivers as other stakeholders. The more sophisticated drivers may reflect boards’ ability to relate to more subtle characteristics of OHS. The identified influencing factors owners’ agenda and director's competence may contribute to enabling such responsiveness.

Our findings suggest that boards that explain their engagement by the more sophisticated drivers can also be expected to react in response to the more rudimentary drivers. This was supported by the first author's summaries of the boards’ OHS work, which when checked in relation to the model, showed a high number of boards mentioning the driver “untoward events”, and a gradually decreasing number of boards mentioning drivers of higher sophistication along the continuum. In further support, there were several narratives in which the moral values toward employees were mentioned concurrently with commenting on other less sophisticated drivers, exemplified by the quotes in the subdriver “moral values toward the employees” in Table 2  . Thus, the moral driver seemed to be one of several drivers for boards to engage in OHS, rather than the single one. However, in line with our qualitative approach, we acknowledge that the categories presented in this study are a co-creation between the researchers and the data. As researchers we actively analyzed the data and our preunderstanding. Background knowledge and interactions as a team inevitably affected the outcomes, as is assumed in this kind of qualitative analysis.

The notion of an evolvement of drivers for board OHS governance aligns with a previous study of directors’ perspectives on the impact of OHS on corporate performance.16 The authors suggest that the frames of reference for health and safety management are extended along a “maturity” continuum; indeed, the drivers found in that study (enlightened paternalism, internal efficiency, and external competitiveness) seem to mirror the aspects of the current study's theme OHS is good for business. These drivers can be interpreted as an awareness of research showing that OHS indeed has a positive impact on the business.32 However, our findings encompass a broader range of drivers, which all are included in a continuum. Of these, the more rudimentary drivers logically coincide with a board's core responsibility, such as legal compliance. The moral driver, on the other hand, goes beyond the obvious responsibilities of a board. In particular, two observations are worth mentioning. First, while the subdriver “moral values toward the employees” could be expected, “moral values toward the society” is perhaps more unforeseen. However, the society in Sweden has strong collectivist and cooperative traits.33 The Social Democratic Party, who governed Sweden during most of the twentieth century, represents an ideology of solidarity, respect, and responsibility. As such values can be expected to shape national institutions,34 we suggest that similar values may have been reflected also in the Swedish boards’ reasoning in this study and are perhaps specific for this sample. Second, the moral drivers were almost exclusively highlighted by respondents from companies with high safety risks. The moral principle of not harming others, and taking on a broader societal responsibility, may be more called for in such settings: the association between work and accidents is more easily detected compared with the more subtle relationship between work conditions and psychological health and productivity. It is also possible that the boards in these companies have personal experiences of the moral implications of a deficient work environment, something that previously has been shown to affect engagement.35 Both instrumental and noninstrumental moral arguments were represented in the theme. Instrumental morality concerns doing what is morally right but with the purpose of serving the goal of value creation maximization of the firm.36,37 In contrast, a noninstrumental moral view sees morality as an end in itself and is focused on what is being the right thing to do, irrespective of shareholder value creation.37 Given that the ultimate purpose of companies is profitability, instrumental moral narratives are not surprising. However, it has also been pointed out that the moral principles of avoiding harming others and respecting others’ autonomy are prerequisites for individuals to freely make binding contracts with each other. Therefore, the principles constitute a part of the foundation upon which the free market rests.37 One way to translate this to OHS is that if a board does not morally value employee well-being and safety as an end in and of itself, the board violates the freely agreed upon employment contract. Indirectly, the board simultaneously violates the objective of shareholder value creation by ignoring the moral principles of a business system that enables such value creation.

Methodological Considerations

There are some methodological considerations to the current study. First, the sample included representatives of large private companies. This sample was chosen because larger companies (1) have professional boards, (2) these companies are generally better at managing OHS,38 and (3) the private sector exerts a potentially greater societal impact because it employs 70% of the Swedish working population39 where the study was set. Hence, the sample increases the likelihood that the respondents have relevant knowledge and experience of what drives OHS engagement from the boardroom. Thus, the sample can be considered an extreme case in relation to the boards of small and medium enterprises (SMEs). In SMEs, one person may occupy multiple roles (ie, owner, board member, manager and worker) and operate under very different circumstances than the boards of larger companies. Therefore, their reasons for engaging in OHS may differ. A recent study of SME owners, for example, suggests that owners’ personal experience of mental health and of workplace incidents was a driver for committing to a workplace mental health promotion intervention, indicating that personal experience may matter more in that context.35 Nevertheless, whereas caution is warranted in directly transferring the findings to boards for smaller companies, the conclusions about what might be done to increase the size of the OHS piece of the pie may nevertheless be indicative beyond large companies.

Within our sample of boards for large companies, we randomly selected companies to invite from within four strata, here being the four biggest industries in Sweden. The inclusion of four industries and several companies within each industry increases the transferability of the results, as does the fact that although the current study was set in Sweden, half of the companies were on the international market or part of global corporations. Yet corporate governance structures differ between countries. For example, in Sweden, employee representation on a board is regulated by law. This is similar to countries such as Germany, France, Austria, and the other Scandinavian countries but is different from, for example, the United Kingdom, Australia, and the United States. Such factors may influence a board's understanding of OSH, as well as how they justify engagement.

Despite the ambition to randomly select companies for participation, several companies declined to participate, and we lack information as to why. There is a chance that the boards particularly interested in OHS chose to participate, but the variability in the findings suggests that we nevertheless captured a range of engagement: from boards reporting limited engagement and few drivers to boards with a fuller engagement and several drivers.

In the interviews, social desirability may have been at play. This risk is limited in an elite sample such as the one in this group; they are not afraid of taking a stance. Yet they are media trained, may try to control the interview, and may be more particular about which questions they accept.40 Awareness of this guided the interviewers during the data collection. Furthermore, credibility was also increased because of respondent triangulation, where more than one respondent from each company was invited. The iterative analytic process, where content experts worked with experts on the qualitative methodology and the final model was checked against data from each organization, contributed to the analytic rigor of the present study.

CONCLUSIONS

Previous research has pointed toward the vital role of managers in understanding how organizations manage OHS, but little is known about the role of a board's governance in this question. The present study contributes a unique perspective from within the boardroom, illuminating how boards describe the reasons for engaging in OHS and the factors that influence what priority OHS is given. The findings show that boards can simultaneously have a comprehensive set of drivers for engaging in OHS and at any given time still give little attention to OHS issues. A high level of board OHS competence and an owner's OHS interest will increase the likelihood of OHS being included in corporate governance. Thus, the current study suggests a way to understand the gap between what is known in the literature about OHS and how OHS is managed in organizations.

Acknowledgments

The authors would like to thank all the companies and respondents for participating in the study.

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Keywords:

board of directors; drivers; governance; health and safety; OHS

Copyright © 2020 The Author(s). Published by Wolters Kluwer Health, Inc. on behalf of the American College of Occupational and Environmental Medicine.