How well is employee ownership working? Evidence from non-financial misconduct

Thu Ha Nguyen, Pham, Man Duy (Marty) and Yang Xiao

Finance Research Letters, 2024, vol. 65, issue C

Abstract: This study investigates how employee activism manifested through equity ownership affects non-financial misconduct by corporate managers. We find that firms with larger employee ownership experience fewer violations and lower penalties for such wrongdoings. This effect likely arises from empowered whistleblowing and potential shareholder litigation. Additionally, employee activism against misconduct is stronger in firms with lower employee well-being, suggesting it acts as a corrective mechanism.

Keywords: Corporate misconduct; Employee ownership; Employee share ownership plan; ESOP (search for similar items in EconPapers)
JEL-codes: G30 G32 M55 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324006688

DOI: 10.1016/j.frl.2024.105638

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