Trust and Ethics in Employee-Owned Companies

Abstract

Employee-owned companies have ethical and trust issues that differ from other companies. Employee ownership provides a structure that aligns a corporation's private self interest with public goals such as distributing wealth and providing retirement benefits. This alignment promotes ethical conduct. All corporations strive to promote long-term trust between the enterprise and its key constituencies such as shareholders, employees, customers, suppliers and directors. Major corporate transactions highlight the importance of trust issues and sometimes trust can be more important than economics. With em ployee-owned companies, the enterprise's trust relationship with employees and shareholders is crucial. However, if the relationship is properly developed and maintained, the enterprise can avoid the conflicts between the short-term perspectives of some shareholders and the longer-term perspectives of employees. Employee ownership can enhance both ethical behavior and trust relationships. In this paper, we will consider ethical and trust issues in employ ee-owned companies using a practical business approach to these issues. First, we will discuss the conceptual framework for the ethical