Corporate Governance and the Role of Labor

Labor is an important corporate stakeholder and crucial to a company’s wealth and long-term productivity. Yet the investment of human capital in a corporation is not diversified and depends on the company’s profitability. If the corporation collapses and layoffs follow, employees not only suffer from a loss of their investment and future income but must also find new jobs.  While numerous studies have examined how employees try to influence firms’ decisions, there is limited direct evidence on whether labor has a voice in corporate governance.

In a new study, we examine whether labor plays a governance role in curbing unethical … Read more