ESOPs, CEO Entrenchment and Corporate Social Performance

Abstract

The purpose of this study is to examine whether employee stock ownership plans (ESOPs) and CEO entrenchment affect social performance. Our central question: does employees’ participation in the system of corporate governance (shareholding and presence in the boards of directors and supervisory boards) influence social performance in the context of manager’s active behavior? One important result of the multi-varied analyses (logistic regression) is that on the whole employees, if they exert an influence on the determination of social performance in the context of non-financial French firms, are relatively powerless, on their own to explain this complex phenomenon. The findings contribute to explain the social performance and they have implications for firms that decide to engage in ESOP plans in French context.