Dollar General Audit Shows Worker Safety Concerns Remain An Issue For Boards

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To avoid similar shareholder proposals that can have a material effect on the bottom line, corporate boards should consider the following.

The recent shareholder approval of a proposal asking that Dollar General conduct an audit of worker safety at the company is a reminder to corporate boards that employee well-being can have a material effect on a company’s sustainability and growth.

Dollar General has become one of the fastest growing retailers in recent years, boasting more than 19,000 stores in the U.S.  Unfortunately, workers have complained about unsafe conditions and violence at the company’s stores for years. According to news reports, 49 people were killed and 172 injured at Dollar General stores since 2014 – including six employees who were killed during armed robberies between 2016 and 2020.

Shareholders recognized that Dollar General’s impressive growth could be derailed if concerns about worker safety are not properly addressed. Dollar General’s board members, who opposed the proposal, must now bring in a third-party entity to conduct the worker safety audit and then the board will need to make changes that employees and regulators will view as progress.

Workers are protesting for change

Dollar General is just the latest company that has had to deal with worker safety issues, including worker protests. In a statement after the proposal passed, Dollar General said, “We encourage employees to share their feedback through the many Company-provided channels so that we can listen and work together to address concerns and challenges.” Unfortunately, a shareholder proposal and employee protests were used to force the board to address worker deaths and customer injuries in a way internal methods did not.

Corporate board members should be more aware that worker safety issues have become more prominent since the Covid pandemic. The topic might warrant additional attention from the board. To avoid shareholder proposals and disturbances that can have a material effect on the company bottom line, corporate boards might consider the following:

• Assess the state of company/employee relations. No matter how good you believe your communications with employees is, it could always be improved. Knowing the primary concerns of workers can yield critical information about worker safety conditions and other issues that can increase worker productivity. By surveying employees, companies may gain insight into what type of adjustments could enhance workplace culture, what obstacles are preventing workers from completing their tasks and which type of incentives motivate workers more. Attending to worker concerns can also build trust which can go a long way in future negotiations. Boards should ask themselves, is our relationship with our employees as good as it should be?

Communicate worker safety policies and procedures to workers and investors. Companies might want to make a point of emphasizing worker safety just like they emphasize cyber-security measures for the company. Highlighting how workers can remain safe while at work (reviewing worker safety protocols) will educate them about the measures that have been taken to keep them safe. It can also reinforce the idea that the company does care about its employees. Companies might consider adding a mention of how worker safety is a priority or has been enhanced in the pages of the company annual report or the proxy statement, so investors know that the company is addressing this issue.

• Prepare a strategy to attract, recruit and retain new workers. If a company is having challenges with its current employee base, it must face the reality that it may need to replace current workers as well as hire additional new workers during growth periods. It is important to have a plan in place to adequately meet the company’s staffing needs, even in the face of criticism about employee safety. The board and management must be forward-thinking and have a rebuttal to potential criticism and evidence that working conditions are safe and accommodating to potential recruits.

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