CEOs Who Experience Natural Disasters Are More Likely to Lead Safer Workplaces

Every year, millions of workers are injured or die on the job, imposing enormous human and economic costs. The socio-economic impact of workplace safety is hard to avoid and presents governments and organizations with a major challenge.

In the United States alone, more than 2.6 million work-related injuries occurred in 2023. These incidents resulted in an estimated economic cost of US$176 billion and a loss of around 103 million workdays, according to national data.

In Canada, a recent report estimates the economic costs of workplace injuries at $29.4 billion, which is even higher than in the U.S. once population size is taken into account.

A large body of research shows that external pressures shape workplace safety, with finances, regulatory enforcement and corporate governance being key drivers. However, emerging evidence points to the influence of corporate leadership itself — particularly the “tone at the top” set by chief executive officers (CEOs).

Previous studies suggest that certain executive traits can undermine safety. Overconfidence, equity-based pay incentives and regulatory compliance can impact safety policies, often negatively. What remains less explored is the role of a CEO’s personal traits and backgrounds. Our recent study sought to fill that gap.

Early Adversity And Executive Decision-Making

Our study examined whether CEOs’ formative experiences help explain differences in workplace safety outcomes.

Our analysis focused on more than 500 CEOs of large U.S. corporations between 2002 and 2011. We identified where each CEO lived between the ages of five and 15, and matched this information to county-level evidence of natural disasters that caused significant economic damage.

CEOs in the top decile of disaster-related economic damage were classified as having experienced an early traumatic experience.

We then assessed whether such exposure translated into better workplace safety performance. We measured this using government injury and illness data, scaled by the total number of hours worked by employees.

After accounting for firm and CEO attributes, we found that firms led by CEOs who grew up amid severe disasters — such as floods, hurricanes or earthquakes — reported significantly fewer workplace injuries than comparable firms (about 24 per cent less, on average).

Further tests revealed that such results were not an outcome of CEO risk aversion preferences. Instead, the differences appeared to reflect distinct managerial choices.

When Character Counts The Most

One plausible explanation for our findings lies in how early adversity shapes values. Experiencing a disaster during childhood may foster empathy and a sense of responsibility toward others.

In a corporate setting, such prosocial tendencies may motivate CEOs to translate their empathy into concrete organizational actions that prioritize employee welfare. These include improving safety standards, investing in employee safety training or adopting technologies designed to mitigate workplace hazards.

Importantly, these effects were nuanced. The relationship between early-life disaster exposure and workplace safety was strongest where CEOs had more power relative to their boards, faced intense pressure to meet earnings targets or operated in industries with weaker union representation.

In such environments, a CEO’s personal values and character may matter more. Leaders who experienced disasters earlier in life appear to be more willing to protect workers, even when it is costly or inconvenient.

Consistent with this interpretation, we also found that firms led by these CEOs were more likely to make concrete operational changes linked to safer workplaces, including investing in health and safety programs and easing excessive employee workloads — practices that are typically linked to lower injury rates.

Implications for Governance And Policy

Early adversity does not automatically produce better leaders, nor should personal history replace regulation, enforcement or collective bargaining. That said, our findings suggest that leadership is shaped not only by training and incentives, but by life itself.

The findings are noteworthy from governance, leadership and societal perspectives, as they suggest there are some corporate leaders who are willing to confront short-term financial constraints and corporate resistance to making workplaces safer.

For boards, investors and policymakers, understanding leaders’ formative experiences may offer new insight into who is most likely to truly put human safety first.

In an era in which corporate responsibility is increasingly scrutinized, who leads firms can have tangible consequences for millions of workers.