Toward a Strategic Role for Employees in Corporate Governance

What is it about?

In this paper we argue how employee participation in corporate decision-making augments organizational performance and limits corporate excesses, and we further highlight the significance of co-determination in the context of knowledge work and economy. Given the economic crisis, the spate of scandals and corporate failures due to irregularities, systemic corruption, and the complaints on managerial whims, there is a renewed emphasis on reforming corporate boards to protect the interests of all stakeholders in addition to shareholders.

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Why is it important?

What role employees are supposed to play in the firm governance, and what responsibilities they need to assume for firm performance and shareholders’ wealth, are becoming of paramount interest to modern management and economics. The knowledge of employees has become a major competitive resource. We argue how employee participation in corporate decision-making augments organizational performance and limits corporate excesses, and further highlight the significance of codetermination in the context of the knowledge-based economy.

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