The Dollar General case study illustrates how the shareholder proposal process can produce decision-useful disclosure that neither regulatory enforcement activity or voluntary reporting had previously supplied. In 2023, Domini Impact Investments and its co-filers submitted a shareholder proposal requesting an independent, third-party audit of the company's workplace health and safety practices. The proposal received approximately 68 percent support,[1] and the company responded by commissioning an independent audit, the results of which it published in April 2024. In its 2024 proxy statement, the board characterized the outcome as follows:[2]
“Workplace Safety. Dollar General has a long-standing commitment to addressing matters that can affect our workplace experience, including employee safety and well-being. Our safety program includes standardized policies and procedures, training, and other proactive measures combined with monitoring and use of data analytics to drive preventative strategies and evolve employee safety strategies and initiatives. At the 2023 Annual Meeting of Shareholders, a majority of our shareholders voted in favor of a shareholder proposal requesting an employee safety and well-being audit. At the direction of our General Counsel and with oversight by the Board, we subsequently engaged an independent third party to conduct the audit and published a related report in April 2024.”
The proposal was grounded in the company's documented record of OSHA violations and in the proponents' concern that Dollar General's operating model prioritized short-term financial performance over worker safety. Since January 2017, OSHA had cited the company for 111 instances of workplace safety violations and assessed more than $15.5 million in penalties.[3] Dollar General was the first employer added to OSHA's Severe Violator Enforcement Program following the program's 2022 expansion, a designation that signals elevated and ongoing enforcement risk.[4] The regulator's own characterization, set out in an April 2023 news release, underscored the systemic nature of the exposure:[5]
"Years of OSHA inspections that have identified systemic hazards makes it clear that Dollar General values profits more than the safety of the people who work in their stores," said OSHA Regional Administrator Kurt Petermeyer in Atlanta. "They are well aware of federal requirements, but they continue to ignore their legal responsibilities to protect their employees at stores throughout the nation."
The pattern was notable as despite a sustained record of enforcement and mounting penalties, there was limited visibility into how management was addressing the issue demonstrating an information asymmetry. The fines measured against the company's cash flows were financially immaterial in the short-term and easy for management to absorb. It was the shareholder proposal that brought the issue to the board’s attention and pushed for an independent audit of Dollar General’s workplace safety practices. Enforcement activity alone had therefore proven insufficient to produce the enhanced disclosure investors wanted. The resulting report acknowledged both the company's remediation efforts and the areas requiring continued attention:[6]
“The audit team noted certain areas of opportunity for focus and continued improvement, which are noted above, and involve issues that have been, or are in the process of being, addressed… Although areas of opportunity exist for the Company to address safety-related matters, those opportunities largely are ones about which the Company was aware and actively taking efforts to address and solve prior to the Audit. The Company is focused on operational improvement across the business, which in turn should help to address the issues noted in the Audit and this Report.”
For investors, the value of this disclosure was a consolidated view of Dollar General's workplace safety practices, where disclosure had previously been insufficient. The report identified both current efforts and areas for future improvement, giving investors a clearer picture of how the company was managing workplace safety risk. It also gave shareholders visibility into remediation efforts management had already undertaken but not previously disclosed.
In July 2024, OSHA and the company entered a corporate-wide settlement resolving the outstanding matters for $12 million.[7] No further major national OSHA penalties against Dollar General appear in the public record since that settlement. Following the proposal, and the company's increased focus on workplace safety, there has also been an absence of further major enforcement actions for the company since 2024.
This demonstrates the value shareholder proposals add to corporate governance. Dollar General's OSHA record was already public, and the issue had drawn sustained regulatory and media attention, yet investors lacked a consolidated view on how management was addressing it. Majority support for the proposal indicates that the additional disclosure it sought was material to investors' assessment of the company, information it was unable to obtain through other levers. In this way, the proposal functioned as an early-warning and risk-mitigation mechanism, prompting the company to address a recurring compliance issue before it compounded into greater regulatory and litigation exposure.
[1] https://www.sec.gov/Archives/edgar/data/29534/000119312523135845/d347802dpx14a6g.htm
[2] https://www.sec.gov/Archives/edgar/data/29534/000110465924044317/tm247081d2_ars.pdf
[3] https://www.shrm.org/topics-tools/employment-law-compliance/dollar-general-faces-renewed-scrutiny-work-conditions
[4] CNBC, July 11, 2024: https://www.cnbc.com/2024/07/11/dollar-general-labor-department-settle-over-safety-violations.html
[5] https://osha.prod.pace.dol.gov/news/newsreleases/osha-national-news-release/20230420-0
[6] Dollar General, Report on Audit of Dollar General Safety Policies and Practices (April 2024): https://www.dollargeneral.com/content/dam/dg/assets/landing-pages/public-relations/corporate-social-responsibility/Dollar_General_Safety_Audit_2024.pdf
[7] U.S. Department of Labor, Department of Labor announces settlement with Dollar General requiring corporate-wide safety investments in stores nationwide, July 11, 2024: https://www.osha.gov/news/newsreleases/national/07112024-0 The settlement resolved existing contested and open OSHA inspections; Dollar General agreed to pay $12 million and implement corporate-wide safety changes, including correction of covered hazards generally within 48 hours, subject to penalties of $100,000 per day up to $500,000.