Employee representation on boards of directors and corporate long-term orientation

초록

Although scholars have recognized and increasingly researched the importance of the role of secondary stakeholders, such as employees, there is still a limited understanding of their potential impact on value creation and, specifically, corporate decision-making. This study examines whether the presence of employee representatives on boards of directors is associated with higher firm value over an extended period. The findings indicate that having employee representatives on boards correlates positively with the enhancement of long-term value for investors. Additionally, the investigation covers the extent to which various internal and external organizational factors impact the effectiveness of these employee board members. The findings indicate that the positive association is stronger where local communities and corporate governance frameworks support a long-term perspective. Furthermore, we find firms with such representation are associated with more extensive environmental disclosures, consistent with disclosure as a plausible channel. This finding aligns with social movement theory, which indicates that social initiatives can encourage firms to adopt more responsible corporate practices, ultimately enhancing longterm firm value.

키워드