Abstract Compensation and benefit practices are mainly considered as instruments to align employee behaviour to an organization's strategic goals, such as economic outcomes. Going beyond this economic focus, this study examines whether and how employee financial participation, may drive corporate sustainability performance (CSP; i.e. social and environmental performance). We investigate the relationship between employee share ownership, stock option and profit‐sharing plans, on the one hand, and CSP, on the other hand. In addition, we investigate the relationship between narrow‐based employee share ownership plans (only eligible for top management) and broad‐based employee share ownership plans (all employees eligible), on the one side, and CSP, on the other side. Using a unique European panel dataset, the results indicate that companies with (broad‐based) employee share ownership plans portray higher CSP, while companies with profit‐sharing plans exhibit lower CSP when there is no share ownership plan present. Also, the positive effect of broad‐based employee share ownership plans on CSP is magnified when the employees own a larger stake in the company. The results indicate that employee share ownership increases stakeholder orientation, strengthening the mutual interests of the organization and employees to long‐term investments in terms of CSP, at the same time broadening their orientation to long‐term external stakeholders’ interests.
Levels of Employee Share Ownership and the Performance of Listed Companies in Europe
Abstract We investigate the effects of employee share ownership (ESO) on three alternative measures of firm performance in a panel of 1,115 companies from the five largest European economies. The results show that firms with ESO enjoy significantly higher levels of capital market performance and of accounting performance than firms without ESO; however, the marginal effects of ESO are declining with increasing ESO levels. ESO does not have a clear effect on productivity. These findings hold for all countries except Spain. Variations in ESO levels within firms over time exert few performance effects.
Managed Returns in Employee-Owned Firms
<span>This paper examines the returns of private firms that offer shares to their rank-and-file employees through Employee Stock Ownership Plans (ESOPs), a type
Overcoming Barriers to Employee Ownership: Insights From Small and Medium-Sized Businesses
This research investigates the limited adoption of employee stock ownership plans (ESOPs) among small-to-medium sized businesses (SMBs) in the U.S. Through interviews with 30 SMB owners across various industries, we identify the key barriers to ESOP adoption as lack of time, money, and skills on the part of the owners. In doing so, the study suggests that a “shared ownership light” model, which involves sharing profits, information, and decision-making opportunities with employees, appears more feasible for SMBs than ESOPs. For SMBs that are interested in ESOP adoption, our research suggests that organizations providing employee ownership services could better assist SMBs by offering templatized models and best practices for profit-sharing plans, open-book management, and structured employee participation. The paper aims to broaden the discussion around shared ownership by considering a spectrum of options that have the potential to increase both value creation by and value-sharing among employees.
Democratic Ownership Funds: Creating Shared Wealth and Power
Recent decades have seen a rapid and little-discussed transformation in corporate ownership structure, with vital consequences for company behaviour and inequality.
The PEPPER V Report - Kelso Institute Europe
This Report provides an overview of the development of employee financial participation, i.e., employee share ownership and profit sharing, across the EU-27, the United Kingdom, and the United States of America as of January 2024. Against the background of the policy development of the past 35 years, it highlights the growth of financial participation over the last decade using the most recent cross-country data available, i.e., the 2021 CRANET Survey, the 2019 European Company Survey and the 2015 European Working Conditions Survey, which also show its potential positive impact on employment and productivity.
WSJ News Exclusive | Private-Equity Giants Back New Nonprofit Promoting Employee Ownership
More than 60 groups, including banks and pension funds, have also signed on to support Ownership Works, which aims to promote broad-based stock ownership as a means of curbing income inequality.
Exclusive | Blackstone to Grant Equity to Most Employees in Future U.S. Buyouts
The private-equity firm’s plan is part of a broader movement in the buyout industry to expand ownership beyond management ranks.
The Shareholder Value Myth
Shareholder primacy theory is suffering a crisis of confidence. In The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and
Psychological Ownership in Financial Decisions
Policy makers have long intuitively realized the benefit of encouraging strong psychological ownership toward social programs. For example, Franklin D. Roosevelt in the 1930s purposely designed the Social Security program to include a high feeling of ownership by workers, to generate a sense of responsibility and protection from future legislation. Recent research suggests that this sense of ownership continues to be an important part of the SSA program and is a significant predictor of when retirees claim their benefits. Strong feelings of ownership also exist for other programs (e.g., Medicare) and financial services (e.g., investments), and there are significant implications of that psychological ownership on consumers’ decisions and behavior around these programs. Policy makers and marketers may wish to consider the role of interventions that affect consumers’ psychological ownership, along with feelings of trust and fairness, for such products.
Corporate social responsibility (CSR)
Read about the corporate social responsibility policies, initiatives and governance in the European Union and how to improve environmental standards in business.
Steward-ownership
Steward-ownership structures a company's ownership in a way that separates economic rights (related to money) from voting rights (related to decision-making power).[1] Steward-ownership is considered an alternative to shareholder primacy models.[2] Steward-ownership can be implemented using different legal forms depending on the type of company and jurisdiction.[3]
Steward Ownership, Sustainability, and Capitalism: Part 1
Affording Disposal Control: The Effect of Circular Take-Back Programs on Psychological Ownership and Valuation
A circular economy is a “closed-loop” system designed so that products flow back into the production cycle after use. With many companies implementing take-back programs as part of their sustainability strategy, a fundamental shift in consumption has occurred, with consumers considering disposal during and even before purchase decision making. Eight experiments reveal that consumers indicate a greater willingness to pay for circular program products. An increase in psychological ownership underlies the difference in product valuation. Specifically, the additional disposal control uniquely afforded by circular products increases the capacity of circular take-back program products to evoke psychological ownership. The process explanation is directly tested through mediation. Experimentally manipulating antecedents of psychological ownership (i.e., disposal control and psychological ownership) provides further support for the conceptual framework.
The Owning Impact Project | MIT Sloan Sustainability Initiative | MIT Sloan
The Owning Impact Project examines the role that systemic investing strategies can have in fostering transformative change.
Role Integration Increases the Fungibility of Mentally Accounted Funds
Bridging the gap between the mental accounting and identities/roles literatures, the present research examines how the extent to which an individual's life roles (e.g., “employee,” “spouse”) are integrated (i.e., have more flexible and permeable psychological boundaries between them) moderates the fungibility of mentally accounted funds. Specifically, individuals with more integrated roles are more able to circumvent the constraints typically imposed by mental budgeting and earmarking; therefore, they are more likely to use funds that are allocated or budgeted for the purposes of one role to service the needs/wants of another role. This holds regardless of whether funds have been (1) allocated to a broader role-specific mental account for future expenditures or (2) earmarked for a specific purchase. The authors find evidence that the effect of role integration arises because those with more integrated roles believe that making purchases for one role using funds allocated or budgeted for the other role is more justifiable.
Investing in Enterprises That Work for Everyone (SSIR)
Impact investors can support a more just economy by prioritizing alternative ownership enterprises that shift power away from shareholders to workers, the community, and the planet. <meta property=
