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Significant Employee Share Ownership and Corporate Governance: Evidence From French Firms

Significant Employee Share Ownership and Corporate Governance: Evidence From French Firms
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Author(s): Oussama Moustabchir (University of Grenoble Alpes, France)
Copyright: 2025
Pages: 32
Source title: Integrating Governance and Corporate Social Responsibility in Employee Share Ownership
Source Author(s)/Editor(s): Zyed Achour (University of Carthage, Tunisia)
DOI: 10.4018/979-8-3693-7031-5.ch008

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Abstract

In France, over the years, employees have acquired an increasingly significant stake in the capital of their companies, often to the point of becoming a key shareholder group. French legislation has made it compulsory for employee shareholders to be represented on the board of directors once they collectively hold more than 3% of the capital. This chapter examines the effects of significant employee share ownership and the resulting board representation on the overall performance of the corporate governance system. The empirical results show that significant employee share ownership has positive effects on corporate governance. The results also show that employee shareholding representation on the board of directors has negative effects in terms of governance. These results suggest a number of recommendations that could help companies in their choice of ownership structure, and that could enlighten regulators about good governance practices.

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