Employee Ownership, Board Representation, and Corporate Financial Policies

Edith Ginglinger, William Megginson and Timothee Waxin
Additional contact information
William Megginson: OU - University of Oklahoma
Timothee Waxin: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: French law mandates that employees of publicly listed companies can elect two types of directors to represent employees. Privatized companies must reserve board seats for directors elected by employees by right of employment, while employee-shareholders can elect a director whenever they hold at least 3% of outstanding shares. Using a comprehensive sample of firms in the Société des Bourses Françaises (SBF) 120 Index from 1998 to 2008, we examine the impact of employee-directors on corporate valuation, payout policy, and internal board organization and performance. We find that directors elected by employee shareholders increase firm valuation and profitability, but do not significantly impact corporate payout policy. Directors elected by employees by right significantly reduce payout ratios, but do not impact firm value or profitability. Employee representation on corporate boards thus appears to be at least value-neutral, and perhaps value-enhancing in the case of directors elected by employee shareholders.

Keywords: Employee ownership; Payout policy; Privatization; Corporate boards (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-bec
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00626310v1
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (48)

Published in Journal of Corporate Finance, 2011, 17, pp.868-887. ⟨10.1016/j.jcorpfin.2011.03.005⟩

Downloads: (external link)
https://shs.hal.science/halshs-00626310v1/document (application/pdf)

Related works:
Journal Article: Employee ownership, board representation, and corporate financial policies (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00626310

DOI: 10.1016/j.jcorpfin.2011.03.005

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().