Employee Shareholders Research Articles

Sustainable Finance and Economical Profitability in Africa

African continent is facing a considerable demonstration of financial institutions and especially bank group which are dominating the banking environment. In the absence of developed financial markets, these bank organisations are at the centre of the economic activity. They are even the main financing source for companies, States, households and represent about 80% of African continent assets. This situation is encouraged by the organisational structure of those banks (subsidiary companies, representative offices, affiliated banks and branches) which permit a better representatively at the level of the continent. This research analyses the influence of sustainable finance principles on the economical profitability of 42 banking groups implanted in African continent between 2010 and 2020. Thus, data used are extracted from annual reports and were analysed through a time cross-sectional regression corrected for any latent heteroscedasticity and serial autocorrelation. At the end, the findings of this research are plural. firstly, green credits and transparency have a non-considerable impact on economical profitability. secondly, employee shareholding and gender diversity have a negative influence on economical profitability. thirdly, corporate environmental responsibility is negatively and highly correlated to bank economic profitability. Finally, philanthropy positively and highly affects economical profitability. One can therefore conclude that the profitability of sustainable finance is mitigated in Africa.

The key to organizational democracy and corporate sustainability?—The role of employee shareholder associations in German listed companies

AbstractEmployee shareholder associations (ESAs) have emerged as a novel, and widely underestimated actor in the European corporate arena, established to collect and pool the shares and voting power held by a company's employees. As such, they parallel existing institutions for employee representation, potentially empowering employees in their role as shareholders and possibly even providing a counterweight to traditional company owners. Unfortunately, we know little about the actual functioning, the inner workings, and, particularly, the ESAs' contributions to date. To address these shortcomings this paper explores the limitations but also the potential of ESAs in large, German listed companies to contribute to employee share ownership (ESO), to organizational democracy (OD), and to corporate sustainability (CS). Our findings show that, as far as ESOs and OD are concerned, in the specific German context, ESAs usually do not offer alternatives to (or even to compete with) existing employee representation but are instead rather dependent on cooperation with them. Regarding CS, any contribution here is closely linked to the ESAs' own principles and depends on the extent to which the ESA management takes them seriously and prioritizes them over other objectives.

Does employee ownership improve labour investment efficiency? Evidence from European firms

This paper studies the impact of non-executive employee ownership on labour investment efficiency for a sample of European firms. It empirically documents a negative association between employee ownership and labour investment inefficiency, which serves an inverse measure of labour investment efficiency. This negative association is notably more pronounced for firms reporting higher discretionary accruals in their financial statements (i.e. firms with higher information asymmetry) and for those with a lower percentage of independent directors (i.e. firms with greater agency problems). As such, this paper offers evidence that employee shareholding enhances employment decisions through two channels: reduced information asymmetry and improved management monitoring.

Diagnostic Discordance Among Histopathological Reviewers for Difficult-to-Diagnose Melanocytic Lesions

Purpose: Histopathological examination is adequate for most melanocytic neoplasms. However, there is a subset of lesions with uncertain malignant potential that are difficult-to-diagnose where utilization of ancillary tests may be considered to aid in providing a more definitive diagnosis.
 Study design: Under an IRB-approved protocol, 3,317 melanocytic lesions underwent independent diagnostic review by up to 9 unique board-certified dermatopathologists. Each lesion received ≥ 3 diagnoses via electronic whole slide images with zoom-in capability as benign, malignant, or unknown malignant potential (UMP). Lesions were subsequently binned according to the results of dermatopathology review in the following manner: concordant (all diagnoses of the same designation); conflicting (both benign and malignant designations); majority (a single designation with the highest number of diagnoses); and equivocal (equal number of different designations). Here we describe the identification of lesions suitable for ancillary testing.
 Results: 30% of lesions were concordant benign and 46.3% were concordant malignant, indicating 76.3% of all lesions were not difficult-to-diagnose. 23.7% of lesions had some level of diagnostic difficulty and/or ambiguity defined by disagreement between reviewers and would be suitable for ancillary testing. Within these ~24%, 7.3% of lesions were majority benign, 4.8% of lesions were majority malignant, 2.7% were majority UMP, 6.9% of lesions were conflicting, and 1.6% of lesions were equivocal.
 
 Conclusions: We demonstrate that in a large cohort of suspicious pigmented lesions, ~24% were difficult-to-diagnose, supporting the need for additional objective diagnostic tools. Patient care would benefit from ancillary testing to aid the diagnosing pathologist in identification of the most appropriate diagnosis to optimize patient management.
 Potential conflicts of interest: This study was supported by Castle Biosciences, Inc. GAH and JAP have served as consultants for Castle Biosciences, Inc. MSG is an employee shareholder of Castle Biosciences, Inc. SIE is a consultant and shareholder for Castle Biosciences, Inc. Editorial assistance was provided by Brooke H. Russell, PhD, and Jason H Rogers, MSc, both employee shareholders of Castle Biosciences, Inc.

Employee share ownership and human resource management: between shareholder and partnership approaches to governance

Using a novel dataset built from the REPONSE 2017 and the FEAS databases, this article highlights the links between employee ownership, HRM practices and industrial relations in French listed companies. We explore the effects of employee ownership intensity (proportion of capital held) and extent (proportion of employee shareholders), as well as the effects of their interaction. Our results suggest contrasting governance logics depending on whether we consider the intensity or the extent of employee ownership, between a shareholder approach on the one hand and a partnership approach on the other.

The Contribution of Employee Financial Participation to the Governance of the SME in Algeria

Corporate governance aims to control management decisions and determine their general lines. Thus, the application of the governance system must take into account the nature of the company itself, the conditions in which it operates, its organizational structure and the administrative culture of its actors. While good governance remains the result of good practices. The objective of this article is to demonstrate the contribution of employee financial participation in governance, through the governance regime, the rights to decide and control, the characteristics of employee shareholders in Algeria and thus on performance financial of companies with employee shareholding, based on mechanisms applicable to SME contexts. We will address in a synthetic manner the reality of this contribution of the financial participation of PFS employees through a discussion of the empirical results drawn from a questionnaire survey carried out among employee shareholders working in Algerian SMEs. The results show a low percentage of share capital held by employees with low female participation, an absence of association for employee shareholders, employee shareholding was a financial means to safeguard the activity of public sector companies with critical financial situations. Employee ownership is essential for businesses, promoting employee trust and participation. However, this role is only fully understood by a few companies. It serves as both a collective incentive and a control mechanism. Benefits include better management, financial benefits, business sustainability and job preservation. Despite this, 56.8% of employee shareholders prefer to sell their shares, raising questions about their motivations. A lack of voting rights in the shareholders’ council, which requires a review of the regulations to promote employee shareholding in Algeria, in particular for SMEs.

Subtype performance of the ancillary diagnostic 23- and 35-gene expression profile (GEP) tests for difficult-to-diagnose melanocytic lesions

Background: Histopathological examination is adequate for most melanocytic neoplasms; however, there is a subset of lesions that are difficult to diagnose. The 23- and 35-gene expression profile (GEP) tests deliver results of suggestive of benign neoplasm, suggestive of malignant neoplasm, or intermediate (cannot exclude malignancy). They are intended to provide clinicians with objective results to be interpreted in the context of clinical, laboratory, and histopathological features to achieve a definitive diagnosis. Both GEPs are stand-alone tests that are independently validated and clinically available. Greater than 99% benign or malignant reporting is achieved clinically when the 23-GEP test is processed first, and if an intermediate result or test failure occurs, the 35-GEP is utilized.
 Methods: The performance of the 23- and 35-GEP tests using this methodology was tested on unequivocal cases from a variety of subtypes (101 benign, 249 malignant). Lesions were included if 2/3 dermatopathologist diagnoses were concordant. Subtype designation was determined by the dermatopathologist that submitted the lesion for the study.
 Results: The overall accuracy metrics in this cohort were 96.0% sensitivity and 87.8% specificity. The results demonstrated 100% sensitivity in several melanoma subtypes including acral lentiginous (n=15), desmoplastic (n=20), melanoma in situ (n=16), and nevoid (n=16). Other melanoma subtypes showed sensitivity metrics of: lentigo maligna, 96.7% (n=31); nodular, 95.1% (n=81); superficial spreading, 97.7% (n=42); and spitzoid, 85.0% (n=20). Subtypes of benign nevi showed a specificity of: blue, 96.7% (n=30); compound, 85.7% (n=42); junctional, 77.8% (n=18); and Spitz, 100% (n=7).
 Conclusions: Overall, we demonstrate that use of the 23- and 35-GEP diagnostic test workflow results in high accuracy across many subtypes of benign and malignant melanocytic neoplasms.
 Financial Disclosures: JAP has served as a consultant for Castle Biosciences, Inc. SIE is a consultant and shareholder of Castle Biosciences, Inc. BHR, JJS, JHR, JKW, SJK, and MSG are employee shareholders of Castle Biosciences, Inc. KM has served as a consultant and investigator for studies supported by Castle Biosciences, Inc. This study was supported by Castle Biosciences, Inc.

Research on the Path of Improving Enterprise Performance through Employee Stock Ownership Plan in Technological Enterprises

In the period of rapid development of the knowledge economy, human capital plays a very prominent role in technology-based enterprises. Technological enterprises have characteristics such as high R&D investment, intensive technological talent, and significant impact of human capital on their competitiveness. Employee stock ownership plans can stimulate innovation vitality and improve innovation efficiency. The research on employee stock ownership in technology-based enterprises is still a relatively new field, and there are still some challenges. Employee stock ownership in technology-based enterprises is an incentive mechanism that can effectively improve corporate performance. This article elaborates on the characteristics of employee stock ownership plans, analyzes the process of their impact on corporate performance, and proposes countermeasures and suggestions. Employee shareholding in technology-based enterprises is not a panacea for all problems, and its successful implementation requires specific design and adjustment based on the company’s own situation. In addition, the implementation of employee stock ownership plans may also face some challenges, such as equity allocation, liquidity management, etc., which require rational allocation of resources and handling of interest relationships.

Research on the Effectiveness of Deep Learning−Based Agency Cost Suppression Strategy: A Case Study of State−Owned Enterprises in Mainland China

The mixed ownership reform aims to improve the property rights structure of the state−owned enterprises (SOEs) and reduce agency costs, and the current mixed reform strategies mainly include equity blending by introducing external non−state capital, executive assignments, and employee stock ownership. In this paper, 953 valid data of A−shares listed in Shanghai and Shenzhen from 2008 to 2020 are used as samples to construct the indicators of mixed reform strategy by the literature statistics method. After obtaining multiple impact indicators, the regression impact model of corporate agency cost suppression strategy is constructed by MATLAB software using a machine learning algorithm. On this basis, the performance of multiple machine learning algorithms is compared, and it is found that the integrated optimization−based bag−boosting model is used to study the effect of hybrid reform strategy to reduce the agency costs of SOEs, and the proportional setting of indicators when the effect is optimal is also explored. Finally, the laws of different influencing factors on the agency costs of enterprises are explored separately by the eigenvalue method. The results of the study show that the proportion of shareholding of the first largest non−state shareholder is sin−functional with the agency costs of SOEs when non−state majority shareholders are introduced into SOEs’ equity mix, and the agency costs tend to decrease after SOEs become privately held enterprises. The greater the number and proportion of supervisors appointed by non−state shareholders, the greater the supervisory restraint effect on SOE managers and the better the effect of suppressing agency costs. The participation of non−state−owned shareholders in the company’s business decisions by appointed executives and the special resource advantages of SOEs intensify the occurrence of the self−interest of appointed executives and the increase of agency costs of SOEs. The implementation of an employee stock ownership plan plays the role of employee supervision and restraint on SOE managers, which reduces the agency costs of SOEs. Based on this, it can provide support for the government to improve the hybrid reform policy and promote the process layer by layer, and also provide theoretical reference for SOEs to deepen the equity mix, incentivize employee shareholding, and empower non−state shareholders to govern and thus reduce agency costs.

The impact of employee shareholding on corporate governance: the employee shareholder director in France

The impact of employee shareholding on corporate governance: the employee shareholder director in France

Non-executive employee ownership and financial reporting quality: evidence from Europe

This paper examines the association between non-executive employee shareholding and financial reporting quality. The analysis is conducted using a sample of non-financial firms listed in eleven European countries between 2006 and 2017. We find a positive association between non-executive employee ownership and financial reporting quality. Furthermore, we find this positive association to be more pronounced for firms operating in the following settings: higher labour union density, more industry peer firms and more flexible labour market regulations. Overall, these findings support the view that employee shareholding enhances the quality of financial reporting by aligning the interests of employees with those of shareholders through two channels: reduced agency problems and enhanced employee retention. Our study contributes to the research on the impact of ownership characteristics on financial reporting incentives. It underscores the role non-executive employee ownership can play in improving a firm’s corporate governance and therefore the quality of financial reporting.

What the PACTE law changes for employee savings and participation?

France has a one of the longest- and best-established employee financial participation system in the world with 3.5 million employee-owners, the largest number of employee-owners of any European country (EFES, 2019). It has also been the first country in 1967 to have compulsory profit-sharing schemes in firms employing 50 or more. The PACTE law (action plan for the growth and transformation of companies) has been promulgated in France in 2019. The PACTE law introduces new measures that support employee financial participation through profit-sharing, gainsharing and employee ownership and, second, employee participation in decision-making through labor representation in corporate governance and social dialogue. First, gainsharing and profit-sharing bonuses are promoted in small businesses by decreasing the social tax. Second, the law introduces developments relating to the representation of employee shareholders and employees, first in corporate governance and, second, in the supervisory boards of company savings funds (CSF). The objective of this paper is to present the new measures of the PACTE law that will affect the development of employee financial participation.

Huawei's Employee Shareholding Scheme: Who Owns Huawei?

This paper aims at empirically analyzing Huawei’s employee shareholding scheme behind its rapid growth to make it the leading Chinese communication manufacturer, with a particular focus on its governance aspect, which the literature has not revealed in depth. With a research question as “Who owns Huawei?”, it sheds light on the background and mechanism of the firm’s employee shareholding scheme and its role in the firm’s governance, drawing on publicly available sources including corporate databases, the preceding literature, information provided by Huawei upon request whenever necessary. As a result, the following points are revealed: (1) Huawei Technologies is wholly owned by its holding company named Huawei Investment & Holding, which implements an employee shareholding scheme through its trade union and it is owned approximately 99 % of the share by employees. (2) As stipulated by the regulations, the firm concentrates all employees’ share to its trade union. Under the restriction from issuing regular stock to its employees, the shares held by the employees are designed as phantom stocks, which come with shareholder rights, including dividends, voting and property rights, as articulated in the Company Law of the People’s Republic of China. (3) Employees’ stocks are legally registered in the name of The Huawei Investment & Holding Co., Ltd. Trade Union Committee, but are effectively owned by employees and controlled separately from the assets of the trade union. (4) Huawei's highest decision-making body is the Employee Shareholders' Representative Commission, which represents the employee shareholders and exercises their rights through the elected Representatives. The employee shareholders vote one vote per share and Representatives vote one vote per person. Although Ren Zhengfei, as the founder, has a veto, its exercise is limited to the extent specified by internal regulations. (5) Based upon the above findings, this paper concludes that Huawei is owned and controlled by its employees, despite the fact their stocks are registered in the name of the firm’s trade union, which is not only made public, but also internally disseminated and practiced. This paper, as the first research in English to the best knowledge of the author, the firm is employee-owned and controlled. It contributes to understand its Scheme in the context of the Chinese legal system, and discover the reality concealed under the constraints due to the Chinese legal system and discuss in real terms, as one of the first comprehensive investigation of Huawei’s Scheme from the governance perspective. Further contributions are anticipated through the comparative studies, adopting a similar program, with other Chinese firms adopting a similar program, and concentrating employee shares to their trade union committees. The author presumes this paper serves as the first step toward series of global comparative studies to enrich our findings not only about the similarities and differences among the countries with different economic and legal systems, but also about the principles of the relevant program suited to the firms with global operations. The rest of the paper is composed of introduction, literature review, discussion, and implications before arriving at the Conclusions. The discussion covers the legal background, employees’ ownership and trade union’s involvement, governance structure, and related subjects.

The Design Path of the Employee Stock Ownership Scheme of the Conventional Holding and Mixed Ownership Enterprises

Employee stock ownership is one of the common medium and long-term incentive methods for state-controlled mixed ownership. As the current state-controlled mixed-ownership enterprise employee shareholding is still in the pilot stage, the State-owned Assets Supervision and Administration Commission of the State Council is still relatively strict on the implementation of relevant conditions for enterprises. Based on the analysis and research on the relevant policies and corporate practices of employee stock ownership, this paper puts forward the implementation path of state-controlled mixed ownership enterprises to carry out employee stock ownership, and gives reminders and early warnings of common risks in the implementation process.

Le rôle de l'administrateur actionnaire salarié dans la gouvernance de l'entreprise : entre dualité et légitimité

L’actionnariat salarié (AS) octroie une participation des actionnaires salariés à double titre : par le partage du profit et par le partage du pouvoir. La première (participation financière) a été largement étudiée dans la recherche académique. La deuxième, lorsqu’elle suppose la présence d’un administrateur représentant l’AS à la gouvernance, est encore peu étudiée. Cette étude, menée dans dix entreprises françaises ayant mis en place ce dispositif en confirme la nature duale. Si elle contribue à l’amélioration de la gouvernance par son rôle disciplinaire, partenarial, cognitif et comportemental, elle est aussi source d’enracinement, plaçant le mandat au centre de tensions de rôles spécifiques.

Huawei’s Employee Shareholding Scheme:

Huawei’s Employee Shareholding Scheme:

The ESG–financial performance relationship: Does the type of employee board representation matter?

AbstractResearch Question/IssueWe examine the impact of two differing types of employee board representation (i.e., labor board representation and employee shareholder board representations) on environmental, social, and corporate governance components of ESG performance and the moderating role of each type of employee board representation on the relationship between ESG performance and the firm's market value.Research Findings/InsightsUsing a propensity score matching approach on a sample of French firms listed in the SBF 120 index from 2007 to 2017, our findings reveal that labor board representatives act in the opposite direction to employee shareholder board representatives by focusing exclusively on improving social performance and reducing environmental and corporate governance performance. The way employees are represented on the board of directors also moderates the corporate ESG–financial performance relationship differently.Theoretical/Academic ImplicationsEmployee directors are not a homogenous group. The differentiation between the two types of employee directors (i.e., labor board representatives and employee shareholder board representatives) brings a deeper understanding of the effect of stakeholders' representation on the board.Practitioner/Policy ImplicationsOur results are of interest to governance policymakers because they provide them with a fresh understanding of the key role of employee board representation. A meaningful inference to be drawn from our findings is that employee ownership and the representation of employees on the board as employee shareholders may bring about fundamental changes in employees' attitudes and behavior on the board and may, in this regard, be considered as a credible way of generating social harmony and constructive relationships between employees and shareholders.Video Abstracthttps://youtu.be/GqB_6GxtH2A

Behavioral effects of employee stock ownership: French case

The present work scrutinizes the effects of the employee-stock-ownership practice on the organizational performance through its impact on the employees’ behavior at work. This study sheds light on the role and contribution of this practice to the corporate governance mechanisms. This article uses a sample of 30 French-listed companies during the period 2008-2012. The empirical approach is a regression of panel data. The results indicate the shrinkage of absenteeism and turnover of the employee shareholders. This work is to show that the ESO and the delegation of power are not only responsible for the improvement of the financial performances but also for a more effective management of human resources: lower absenteeism and turnover.

Friend or foe? Employee ownership and CEO dismissal

This paper examines 2 research questions. First, does the level of employee stock ownership impact the likelihood of dismissing poorly performing chief executive officers (CEOs)? Second, does the level of employee stock ownership affect the likelihood of appointing an outsider or an insider after the dismissal of an incumbent CEO? We suggest that employee stock ownership reinforces the firm performance—CEO dismissal link because employee shareholders' welfare consisting of fixed claims (wages, bonuses, etc.), residual claims (dividends, increase in stock value, etc.), and human capital (generic and idiosyncratic) are highly linked to their firm performance. Moreover, under conditions of poor performance, employee shareholders are likely to favor an outsider CEO because he or she is more likely to initiate and implement drastic changes to the strategy of the firm, and therefore, he or she is more likely to improve firm performance. Drawing on a longitudinal sample of French firms, we find that employee stock ownership strengthens the negative relationship between firm performance and CEO dismissal likelihood. We find also that the higher employee ownership, the more likely that the underperforming CEO is replaced by an outsider. In contrast, employee ownership has no moderating impact on the likelihood of insider CEO appointment.

Employee Shareholding and the Opportunity Cost of Lending Funds: An Empirical Study in the Context of French Companies in the SBF 250

Employee Shareholding and the Opportunity Cost of Lending Funds: An Empirical Study in the Context of French Companies in the SBF 250