This document discusses the role of employees as stakeholders in corporate governance. It outlines two main models of corporate governance - the outsider/shareholder model and insider/stakeholder model. The insider model, which prioritizes stakeholders over shareholders, is more common in Eurasian countries due to the mass privatization that gave employees ownership stakes. The document also examines various forms of employee participation, such as collective bargaining, financial participation through stock options or profit sharing, information and consultation rights, and board-level co-determination.
THE ROLE OF EMPLOYEES ON THE BOARD OF DIRECTORScamilla529973
The document discusses the role of employees as stakeholders in corporate governance. It outlines two main models of corporate governance - the outsider/shareholder model and insider/stakeholder model. It also describes various forms of employee participation in corporate governance, such as collective bargaining, information and consultation procedures, financial participation through equity sharing and profit sharing, and codetermination through employee representation on boards. The importance of employee participation through these various forms is discussed in the context of corporate governance in Europe and Eurasian countries.
The document discusses various perspectives on employee involvement and participation in decision making, including unitarist, pluralist, and Marxist views. It also examines different levels of control workers may have, forms of participation, factors pushing for greater participation, and mechanisms used for direct and indirect participation. Barriers to effective participation are also outlined.
The document discusses corporate social responsibility and sustainability. It mentions several international frameworks for CSR like the UN Guiding Principles on Business and Human Rights, and OECD guidelines for multinational enterprises. It also discusses domestic CSR policies in countries like India and the EU. Overall, the document advocates for respecting human rights, transparency, sustainability, and partnerships to promote responsible business practices globally.
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The document proposes an Inclusive Participative Company Model (IPCM) with the following key aspects:
1. It aims to provide a framework for an inclusive and participatory business model that can be adapted to individual companies. It draws on experiences like Mondragon cooperative model and other companies with participatory practices.
2. The model focuses on four main axes: a cooperative culture and concern for workers, prioritizing a shared collective project and sustainability over short-term profits, worker participation in management, profits and ownership, and consideration of community needs.
3. Specific characteristics include transparency, training, reasonable pay ratios, profit sharing, participatory management, enabling worker ownership, promotion from within, gender inclusion
This document provides an overview of employee relations and international labor organizations. It defines employee relations and discusses factors that influence it such as institutional, economic, technological, political/legal, and global factors. It then evaluates international labor organizations like the WFTU, ICFTU, ITUC, and ETUC. Alternative forms of worker representation are described, including work councils, co-determination, and worker cooperatives. Work councils and co-determination systems in different countries are defined. Finally, litigation risks in international employee relations are mentioned.
This is a pre-publication version of a paper that was accepted for presentation at the British Academy of Management 32nd Annual Conference on the 5th September, 2018.
The latest European Union’s (EU) guiding policies are encouraging big businesses and state-owned organisations to disclose their environmental, social and governance (ESG) performance. Many European member states have transposed the EU’s directive 2014/95/EU on non-financial reporting. This directive has presented a significant step forward toward the as its “comply or explain” approach has encouraged organisations to disclose a true and fair view on their organisations’ financial and ESG capitals. Hence, this paper makes specific reference to some of the corporations’ best practices as it identifies areas for improvement in corporate governance issues. It explains how three major European banks are following the recommendations of their national regulatory institution, as they have reviewed the roles and responsibilities of the corporate boards and management. In many cases, they have anticipated the regulatory, legal, contractual, social and market-driven obligations. This contribution contends that there are significant implications for financial services corporations who intend following the right path toward responsible corporate governance and ethical behaviours.
Labour relations FINAL 0312-2016 by Zoltan JuhaszZoltán Juhász
This document outlines an agenda and objectives for a course on labour relations. The course will introduce key concepts in labour relations including social partnership models, forms of employee representation, and collective bargaining processes. It will analyze discrimination issues and provide business case studies. The agenda includes sessions on introduction and foundations, general models in EU countries, collective bargaining toolkits, diversity, and an essay assignment. Literature required and recommended for the course is also listed, covering topics like trade unions, works councils, and the right to strike.
THE ROLE OF EMPLOYEES ON THE BOARD OF DIRECTORScamilla529973
The document discusses the role of employees as stakeholders in corporate governance. It outlines two main models of corporate governance - the outsider/shareholder model and insider/stakeholder model. It also describes various forms of employee participation in corporate governance, such as collective bargaining, information and consultation procedures, financial participation through equity sharing and profit sharing, and codetermination through employee representation on boards. The importance of employee participation through these various forms is discussed in the context of corporate governance in Europe and Eurasian countries.
The document discusses various perspectives on employee involvement and participation in decision making, including unitarist, pluralist, and Marxist views. It also examines different levels of control workers may have, forms of participation, factors pushing for greater participation, and mechanisms used for direct and indirect participation. Barriers to effective participation are also outlined.
The document discusses corporate social responsibility and sustainability. It mentions several international frameworks for CSR like the UN Guiding Principles on Business and Human Rights, and OECD guidelines for multinational enterprises. It also discusses domestic CSR policies in countries like India and the EU. Overall, the document advocates for respecting human rights, transparency, sustainability, and partnerships to promote responsible business practices globally.
cooperation economy and the inclusive participative company modelFundacinArizmendiarr
The document proposes an Inclusive Participative Company Model (IPCM) with the following key aspects:
1. It aims to provide a framework for an inclusive and participatory business model that can be adapted to individual companies. It draws on experiences like Mondragon cooperative model and other companies with participatory practices.
2. The model focuses on four main axes: a cooperative culture and concern for workers, prioritizing a shared collective project and sustainability over short-term profits, worker participation in management, profits and ownership, and consideration of community needs.
3. Specific characteristics include transparency, training, reasonable pay ratios, profit sharing, participatory management, enabling worker ownership, promotion from within, gender inclusion
This document provides an overview of employee relations and international labor organizations. It defines employee relations and discusses factors that influence it such as institutional, economic, technological, political/legal, and global factors. It then evaluates international labor organizations like the WFTU, ICFTU, ITUC, and ETUC. Alternative forms of worker representation are described, including work councils, co-determination, and worker cooperatives. Work councils and co-determination systems in different countries are defined. Finally, litigation risks in international employee relations are mentioned.
This is a pre-publication version of a paper that was accepted for presentation at the British Academy of Management 32nd Annual Conference on the 5th September, 2018.
The latest European Union’s (EU) guiding policies are encouraging big businesses and state-owned organisations to disclose their environmental, social and governance (ESG) performance. Many European member states have transposed the EU’s directive 2014/95/EU on non-financial reporting. This directive has presented a significant step forward toward the as its “comply or explain” approach has encouraged organisations to disclose a true and fair view on their organisations’ financial and ESG capitals. Hence, this paper makes specific reference to some of the corporations’ best practices as it identifies areas for improvement in corporate governance issues. It explains how three major European banks are following the recommendations of their national regulatory institution, as they have reviewed the roles and responsibilities of the corporate boards and management. In many cases, they have anticipated the regulatory, legal, contractual, social and market-driven obligations. This contribution contends that there are significant implications for financial services corporations who intend following the right path toward responsible corporate governance and ethical behaviours.
Labour relations FINAL 0312-2016 by Zoltan JuhaszZoltán Juhász
This document outlines an agenda and objectives for a course on labour relations. The course will introduce key concepts in labour relations including social partnership models, forms of employee representation, and collective bargaining processes. It will analyze discrimination issues and provide business case studies. The agenda includes sessions on introduction and foundations, general models in EU countries, collective bargaining toolkits, diversity, and an essay assignment. Literature required and recommended for the course is also listed, covering topics like trade unions, works councils, and the right to strike.
This document compares corporate governance and public governance at the European level. It discusses how both fields aim to restore trust and enable participation through transparency, checks on decision-making, and stakeholder input. However, corporate governance focuses on profitability while public governance aims for cohesion. Still, modern democracy and companies both require representation of economic and social interests. The document also notes calls for corporate governance to address short-termism and how public governance could improve European citizenship and responsible lobbying.
Corporate governance and financial reporting disclosuresAlexander Decker
This article examines the influence of corporate governance on corporate financial reporting disclosures in Bangladesh. The researchers measured the overall disclosure index of 20 non-financial companies and found that corporate governance is significantly associated with the extent of financial reporting disclosures. In particular, external auditors, multi-listing status, and profitability were significantly associated with higher overall financial reporting disclosures. The article argues that improving corporate governance practices, such as strengthening board oversight and external controls, can help enhance the reliability of financial reporting and restore investor confidence in Bangladesh's volatile capital markets.
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This document discusses a stakeholder management model for improving ethical decision making in organizations. It presents key concepts from stakeholder theory and analyzes the implications for management. Stakeholder theory defines stakeholders broadly as any group or individual affected by or able to affect the organization. The paper introduces the concept of a "stakeholder corporation" whose management has fiduciary duties to all stakeholders, not just shareholders. It also discusses instrumental and normative approaches to stakeholder management and presents a ten-step model for identifying and responding to stakeholder interests to improve organizational decision making.
Worker participation in management involves workers and management sharing information and participating in decision making. There are various levels and forms of participation, from informative to consultative to administrative to decision-making levels. Effective worker participation can increase productivity and industrial harmony through mutual understanding between workers and management. However, participation in management programs in India have had limited success due to lack of initiative, ideological differences, and management's reluctance to share power.
The corporate governance framework should promote transparent and fair markets to efficiently allocate resources. It should be consistent with the rule of law and enable effective supervision and enforcement. An effective framework requires a sound legal, regulatory and institutional foundation that market participants can rely on. The framework comprises elements of legislation, regulation, self-regulation and voluntary commitments that vary between countries based on circumstances. Frameworks should be reviewed and updated as experiences and business environments change.
This document contains the G20/OECD Principles of Corporate Governance, which provide a framework for well-functioning corporate governance systems. The principles help policymakers evaluate and improve corporate governance rules and regulations to support economic efficiency, sustainable growth, and financial stability. They address issues such as shareholders' rights, equitable treatment of shareholders, institutional investors' role, disclosure and transparency, and board responsibilities. The principles were first published in 1999 and updated in 2015 following a review involving G20 countries, international organizations, experts and stakeholders.
This chapter discusses key issues in international industrial relations and policies and practices of multinational companies. It outlines how industrial relations systems differ across countries due to historical and societal factors. Trade unions can constrain multinational strategies by influencing wages, employment levels, and integration across countries. Unions are concerned with multinationals' resources, ability to relocate, control, and potential "investment strikes." Unions respond through international coordination and lobbying for restrictions. The European Union standardizes some policies through information sharing and works councils.
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This research proposal aims to explore the impact of codetermination, a form of corporate governance involving worker representation, on firm performance metrics like total factor productivity, efficiency, and growth. While previous research has found mixed results, the proposal will focus on analyzing codetermination's effects within the automotive industry using econometric techniques. The analysis is motivated by debates around balancing employee and shareholder interests through participation models and ensuring sustainable long-term growth.
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The document discusses workers' participation in management in organizations. It defines workers' participation as workers having a say in economic, personnel, and social decisions that affect them through appropriate sharing of decision-making power. It outlines various ways workers can participate, such as through ownership, control, councils, committees, bargaining, job design, suggestion schemes, quality circles, empowered teams, and total quality management. The objectives, importance, limitations, and evolution of workers' participation in India are also discussed.
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This document provides an overview of corporate governance. It defines corporate governance as the system by which companies are directed and controlled, focusing on promoting fairness, transparency and accountability. The key stakeholders in corporate governance are identified as shareholders, board of directors, management and other external parties like regulators. Several principles of corporate governance are outlined, including equitable treatment of shareholders, integrity and ethical behavior. The document also discusses concepts like the principal-agent relationship in corporate governance and different models of the corporation.
This document deals with the Corporate Governance standards in Germany. The evolution of corporate governance norms, development of the German Code of Corporate Governance, Effectiveness of internal controls, issues like Self Dealing, external controls and financial reporting standards are the topics discussed here.
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This study examines the roles of corporate governance, dividend policy, and capital structure on ownership structure and their impact on firm value. The study analyzes manufacturing firms listed on the Indonesia Stock Exchange from 2008-2011. The results show that institutional majority ownership can cause agency problems but corporate governance and dividend policy can mitigate these issues, increasing firm value. Capital structure can also reduce agency problems but does not affect value when good governance increases debt usage. Dividend policy and capital structure are not substitutes or complements in reducing agency problems.
The role of corporate governance, dividend policy, and capitalAlexander Decker
This study examines the roles of corporate governance, dividend policy, and capital structure on ownership structure and their impact on firm value. The study analyzes manufacturing firms listed on the Indonesia Stock Exchange from 2008-2011. The results show that institutional majority ownership can cause agency problems but corporate governance and dividend policy can mitigate these issues, increasing firm value. Capital structure can also reduce agency problems but does not affect value when good governance increases debt usage. Dividend policy and capital structure are not substitutes or complements in reducing agency problems.
A lecture given by Professor Isabel Vidal at the University of Edinburg Business School, the 2nd of February, 2012.
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Mapping key dimensions of industrial relationsEurofound
industrial relations, social justice, competitiveness, job quality, employment quality, decent work, employment quality, autonomy, participation, representation, equality, equity, influence, fundamental rights, social cohesion, entrepreneurship, market, capitalism, non-discrimination, HRM, strategic choice, industrial relations in Europe, labour relations, employment relations, social dialogue, trade, unions, crisis, cross-sector, employers, european company, european framework agreements, european works council, industrial action, industrial action, industrial relations, law, minimum wage, sectoral social dialogue, social dialogue, trade unions, wages, working time, bargaining in the shadow of the law, collective agreements, European commission, EU law, EU treaties, decentralization of collective bargaining, single employer bargaining, multi-employer bargaining, extension of collective agreements, favourability principle, opt-out, opening clause, erga omnes, commodity, ILO, dispute settlement, varieties of capitalism, coordinated market economy, liberal market economy, bi-partite, tri-partite, Val Duchesse, macro-economic dialogue, tri-partite social summit, social dialogue committee, working time, labor productivity, labor cost, trade union density, collective bargaining coverage, pay, autonomous agreements, telework, parental leave, BUSINESSEUROPE, ETUC, CEEP, UEAPME, mega trends, information and consultation, open method of coordination, mutual learning,
This document compares corporate governance and public governance at the European level. It discusses how both fields aim to restore trust and enable participation through transparency, checks on decision-making, and stakeholder input. However, corporate governance focuses on profitability while public governance aims for cohesion. Still, modern democracy and companies both require representation of economic and social interests. The document also notes calls for corporate governance to address short-termism and how public governance could improve European citizenship and responsible lobbying.
Corporate governance and financial reporting disclosuresAlexander Decker
This article examines the influence of corporate governance on corporate financial reporting disclosures in Bangladesh. The researchers measured the overall disclosure index of 20 non-financial companies and found that corporate governance is significantly associated with the extent of financial reporting disclosures. In particular, external auditors, multi-listing status, and profitability were significantly associated with higher overall financial reporting disclosures. The article argues that improving corporate governance practices, such as strengthening board oversight and external controls, can help enhance the reliability of financial reporting and restore investor confidence in Bangladesh's volatile capital markets.
A Stakeholder Management Model For Ethical Decision MakingGina Brown
This document discusses a stakeholder management model for improving ethical decision making in organizations. It presents key concepts from stakeholder theory and analyzes the implications for management. Stakeholder theory defines stakeholders broadly as any group or individual affected by or able to affect the organization. The paper introduces the concept of a "stakeholder corporation" whose management has fiduciary duties to all stakeholders, not just shareholders. It also discusses instrumental and normative approaches to stakeholder management and presents a ten-step model for identifying and responding to stakeholder interests to improve organizational decision making.
Worker participation in management involves workers and management sharing information and participating in decision making. There are various levels and forms of participation, from informative to consultative to administrative to decision-making levels. Effective worker participation can increase productivity and industrial harmony through mutual understanding between workers and management. However, participation in management programs in India have had limited success due to lack of initiative, ideological differences, and management's reluctance to share power.
The corporate governance framework should promote transparent and fair markets to efficiently allocate resources. It should be consistent with the rule of law and enable effective supervision and enforcement. An effective framework requires a sound legal, regulatory and institutional foundation that market participants can rely on. The framework comprises elements of legislation, regulation, self-regulation and voluntary commitments that vary between countries based on circumstances. Frameworks should be reviewed and updated as experiences and business environments change.
This document contains the G20/OECD Principles of Corporate Governance, which provide a framework for well-functioning corporate governance systems. The principles help policymakers evaluate and improve corporate governance rules and regulations to support economic efficiency, sustainable growth, and financial stability. They address issues such as shareholders' rights, equitable treatment of shareholders, institutional investors' role, disclosure and transparency, and board responsibilities. The principles were first published in 1999 and updated in 2015 following a review involving G20 countries, international organizations, experts and stakeholders.
This chapter discusses key issues in international industrial relations and policies and practices of multinational companies. It outlines how industrial relations systems differ across countries due to historical and societal factors. Trade unions can constrain multinational strategies by influencing wages, employment levels, and integration across countries. Unions are concerned with multinationals' resources, ability to relocate, control, and potential "investment strikes." Unions respond through international coordination and lobbying for restrictions. The European Union standardizes some policies through information sharing and works councils.
Workers co-determination and industrial productivityserena boccardo
This research proposal aims to explore the impact of codetermination, a form of corporate governance involving worker representation, on firm performance metrics like total factor productivity, efficiency, and growth. While previous research has found mixed results, the proposal will focus on analyzing codetermination's effects within the automotive industry using econometric techniques. The analysis is motivated by debates around balancing employee and shareholder interests through participation models and ensuring sustainable long-term growth.
This report develops a methodology for assessing the enabling environment for cooperatives across countries. It defines the enabling environment as the degree to which nations support cooperative firms according to cooperative principles. The report finds that the enabling environment is highly complex and multidimensional, influenced by historical, cultural, social, legal, policy and economic factors. It determines that constructing a single comparable enabling environment indicator is impossible due to differences between countries. However, the report develops a framework to analyze relationships between quantitative data on cooperative performance and proxies for elements of the enabling environment, in order to identify which factors correlate with higher or lower cooperative development.
Governance Rules For Executive Pay – The EU and G20 Perspectives By Leonardo ...MSL
Leonardo Sforza discusses governance rules for executive pay from both an EU and G20 perspective in the November 2013 edition of Benefits & Compensation International.
Chapter 8 international industrial relations (iir)Preeti Bhaskar
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The document discusses workers' participation in management in organizations. It defines workers' participation as workers having a say in economic, personnel, and social decisions that affect them through appropriate sharing of decision-making power. It outlines various ways workers can participate, such as through ownership, control, councils, committees, bargaining, job design, suggestion schemes, quality circles, empowered teams, and total quality management. The objectives, importance, limitations, and evolution of workers' participation in India are also discussed.
Corporate Governance a conceptual frameworkVineet Murli
This document provides an overview of corporate governance. It defines corporate governance as the system by which companies are directed and controlled, focusing on promoting fairness, transparency and accountability. The key stakeholders in corporate governance are identified as shareholders, board of directors, management and other external parties like regulators. Several principles of corporate governance are outlined, including equitable treatment of shareholders, integrity and ethical behavior. The document also discusses concepts like the principal-agent relationship in corporate governance and different models of the corporation.
This document deals with the Corporate Governance standards in Germany. The evolution of corporate governance norms, development of the German Code of Corporate Governance, Effectiveness of internal controls, issues like Self Dealing, external controls and financial reporting standards are the topics discussed here.
The role of corporate governance, dividend policy, and capitalAlexander Decker
This study examines the roles of corporate governance, dividend policy, and capital structure on ownership structure and their impact on firm value. The study analyzes manufacturing firms listed on the Indonesia Stock Exchange from 2008-2011. The results show that institutional majority ownership can cause agency problems but corporate governance and dividend policy can mitigate these issues, increasing firm value. Capital structure can also reduce agency problems but does not affect value when good governance increases debt usage. Dividend policy and capital structure are not substitutes or complements in reducing agency problems.
The role of corporate governance, dividend policy, and capitalAlexander Decker
This study examines the roles of corporate governance, dividend policy, and capital structure on ownership structure and their impact on firm value. The study analyzes manufacturing firms listed on the Indonesia Stock Exchange from 2008-2011. The results show that institutional majority ownership can cause agency problems but corporate governance and dividend policy can mitigate these issues, increasing firm value. Capital structure can also reduce agency problems but does not affect value when good governance increases debt usage. Dividend policy and capital structure are not substitutes or complements in reducing agency problems.
A lecture given by Professor Isabel Vidal at the University of Edinburg Business School, the 2nd of February, 2012.
This lecture gives an interesting insight into the corporate governance of social enterprises in Europe with a focus on Spain, combining a theoretical approach with the results of an empirical study.
Mapping key dimensions of industrial relationsEurofound
industrial relations, social justice, competitiveness, job quality, employment quality, decent work, employment quality, autonomy, participation, representation, equality, equity, influence, fundamental rights, social cohesion, entrepreneurship, market, capitalism, non-discrimination, HRM, strategic choice, industrial relations in Europe, labour relations, employment relations, social dialogue, trade, unions, crisis, cross-sector, employers, european company, european framework agreements, european works council, industrial action, industrial action, industrial relations, law, minimum wage, sectoral social dialogue, social dialogue, trade unions, wages, working time, bargaining in the shadow of the law, collective agreements, European commission, EU law, EU treaties, decentralization of collective bargaining, single employer bargaining, multi-employer bargaining, extension of collective agreements, favourability principle, opt-out, opening clause, erga omnes, commodity, ILO, dispute settlement, varieties of capitalism, coordinated market economy, liberal market economy, bi-partite, tri-partite, Val Duchesse, macro-economic dialogue, tri-partite social summit, social dialogue committee, working time, labor productivity, labor cost, trade union density, collective bargaining coverage, pay, autonomous agreements, telework, parental leave, BUSINESSEUROPE, ETUC, CEEP, UEAPME, mega trends, information and consultation, open method of coordination, mutual learning,
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1. The Role of Employees
as Stakeholders in
Corporate Governance
Roustem Davletguildeev
Trade Unions Advisory Committee to the OECD
Third Eurasian Roundtable on Corporate
Governance, 29-30 October, 2003, Bishkek
2. The Preamble to the OECD
Principles on Corporate
Governance
“… Employees and other stakeholders
play an important role in contributing to
the long-term success and performance
of the corporation, while governments
establish the overall institutional and
legal framework for corporate
governance”.
3. Essential points for the
presentation
what is the difference between insider and
outsider models of the Corporate Governance
in application to the Eurasian needs
the importance of the Corporate Social
Responsibility’s concept for the present
situation in Europe
which are the essential forms of the
employees’ participation
conclusions
5. Two models of
Corporate Governance
Outsider (shareholders) model
Insider (stakeholders) model
6. The outsider model
A priority to market regulation
the owners of firms tend to have a transitory
interest in the firm
The absence of close relationships between
shareholders and management
the existence of an active `market for corporate
control´ - takeovers, particularly hostile ones
the primacy of shareholder rights over those of
other organisational groups
7. The insider model
The priority to stakeholders control
The owners of firms tend to have an enduring
interest in the company
They often hold positions on the board of
directors or other senior managerial positions
The relationships between management and
shareholders are close and stable
There is little by way of a market for corporate
control
the existence of formal rights for employees to
influence key managerial decisions
8. Insider model in Eurasian
countries
The mass privatisation with favourable conditions for
employees in Eurasian countries has created
prerequisites for the insider model of corporate
governance
The Russian tendency that the employees’ shares
pass to other holders is also present in Eurasian
countries but not so sharp
Particularity for some countries is the high
concentration of share’s capital at the management
Nevertheless, employees continue to play important
role as shareholders in Armenia, Azerbaijan, Georgia,
Kazakhstan, Kyrgyzstan, Moldova, Ukraine and
Uzbekistan
9. International private
initiative in CG
The role of employees in corporate governance has an
important place in widespread corporate governance
guidelines and codes of conduct as, for example, in
Corporate Governance Forum Principles (1998), Bosh
Report, General Motors Board Guidelines, Dey Report
and others (Holly J. Gregory, International comparison
of board “Best practices” in developed markets, 1999 )
As said in Corporate Governance Forum Principles:
“…Without stable cooperation between employees and
management, shareholders’ value will never be
maximised…”
10. The European Union’s
concept of CSR
Green Paper “Promoting a European Framework for
Corporate Social Responsibility” (2001) defined CSR
as “a concept whereby companies integrate social and
environmental concerns in their business operations
and in their interaction with their stakeholders on a
voluntary basis”
As indicated in Communication of Commission (2002)
“Within a business CSR relates to quality employment,
lifelong learning, information, consultation and
participation of workers, equal opportunities, integration
of people with disabilities anticipation of industrial
change and restructuring. Social dialogue is seen as a
powerful instrument to address employment-related
issues”
11. Corporate Social
Responsibility in Russia
Voluntary initiative for the reporting system on
corporate social responsible conduct within the
Russian managers association (more than 180
companies’ reports)
Creation by Alfa-group, Interros, Ukos and BP,
Shell, Cisco Systems of the Russia partnership
for action on corporate governance and social
responsibility
12. Employees’ involvement in
Corporate Governance
Strengths the system of human resource
management
Increases the labour motivation
Raises legitimacy and authority of the
decision making
Improves the corporate culture
Contributes to economic grow and social
stability
13. Forms of the Employees’
Participation
Collective bargaining
Information and consultation procedures
Financial participation: equity sharing and
profit sharing
Co-determination: employees’
representation on boards of directors and
works councils
14. Collective bargaining
Traditional channel for the social dialogue
Trade union as a main employees’
representative
Mainly non-acceptance in the corporate
governance framework in Eurasia
High potential in European Union
Need of advanced level corporate culture in
relationships between management and trade
union
15. Employees’ financial
participation
Equity sharing means employee share
ownership:
Employee Share Ownership Plan (ESOP)
Stock bonus plans
Stock option plans
Employee buyout
Worker Cooperatives
Profit sharing is the distribution of share profit
among employees:
Cash-based sharing of annual profits
Deferred profit-sharing
16. Employee stock options
Motivation and productivity - creation of
entrepreneurial spirit within the firm by aligning the
interests of employees and shareholders.
Personnel recruitment and retention - usually stock
options cannot be exercised for several years after
grant and become void if an employee leaves the
company. Thus the options tie employees to their
employers which is important for companies that invest
in human capital.
Capital and liquidity-related reasons - a possibility
for the company to remunerate employees without an
immediate drain on liquid assets
17. Employee stock options
(Cont.)
Measures to promote employee stock options
will be most beneficial if they are part of
consistent national approaches to employee
participation
18. The case of the USA
employee stock options have become a regular and
widely used instrument for the compensation of
employees, in particular the higher management
Over 80% of the 500 biggest quoted companies have
introduced employee stock option plans
In the late 1990s between 7 and 10 million employees
annually received stock options, several times more
than in the early 1990s when the number of recipients
of options was estimated at around a million.
86% of employers offer stock options to employees
and that in 2000, 19% of all employees were eligible for
stock options compared to only 12% in 1998 (Watson
Wyatt Worldwide, 2000).
19. The case of the EU
In Belgium since 1999 between 70,000 and 75,000
employees have received stock options. Today almost
all of the 20 largest Belgian companies (BEL20)
operate stock option plans.
In Germany in 1997 ten employee stock option
programmes were introduced in German companies,
today over two-thirds of companies included in the
German stock index (DAX) run such plans.
In France approximately 50% of all quoted companies
and 95% of the quoted companies have introduced
stock option plans.
(PricewaterhouseCoopers (2002). )
20. The case of Eurasian
countries
Big proportion of employees as shareholders
within joint stock companies created by the
mass privatisation usually doesn't mean their
involvement in corporate governance
Employee financial participation exists mainly
for high managers in multinational companies
21. Information and
Consultation
Employees’ representatives have the right to be
informed before the decision on issues such as the
restructuring of the workforce, the relocation of plants,
reduced working hours, vocational training schemes,
systems of organizing and monitoring work, time
studies, the setting of bonuses and pay incentives, job
evaluation, or a change in the legal status of the
enterprise which would affect staffing levels
They have the right to be consulted before decisions
are actually taken on matters of collective relevance (
transfers, major changes in conditions, cases of
suspension of the contract of employment or collective
dismissal/redundancy).
22. Co-determination
In a majority of EU countries, there is a
statutory system for some form of
employee representation on the board of
directors or supervisory boards of some
types of company.
Statutory works councils systems based
on legislation or widely applicable
collective agreements exist in 12 EU
members (primary is the German model
of the betriebsrat)
23. EU Directives on employees’
participation
The European Works Councils (EWCs) Directive (94/45/EC) has
introduced pan-European structures for the information and consultation
of employees and their representatives on a range of business and
employment issues in multinational companies over a certain size
operating in the EU;
The recent Directive (2002/14/EC) establishing a general framework
for informing and consulting employees will require all undertakings
with at least 50 employees (or establishments with at least 20
employees) to provide employee representatives with information and/or
consultation on a range of business, employment and work organisation
issues.
Directives (2001/86/EC and 2003/72/EC), adopted in October 2001 and
in July 2003, provide for employee involvement (through both
information and consultation structures or procedures and board-level
participation) in 'European Company' (Société Européenne) and in
European Cooperative Society – the new optional form of Europe-wide
company set up under the European Company Statute; and
various Directives have guaranteed information and/or consultation on
specific issues, notably collective redundancies , business transfers and
health and safety
24. The case of Eurasian
countries
The Soviet Labour Law has contained detailed
provisions on workers’ participation in the
governance of the socialistic enterprise
Actually only Kyrgyz Labour Code 1997
remains the notion “labour collective” and
provides the creation of works councils
(chapter 3)
All Eurasian countries have the possibility to
obtain the employees’ participation in dialogue
with trade unions
25. What should be doing
Provide inclusion into the labour legislation of
the norms on employees’ participation taking
into account the particularity of the mentality
Obtain the coordination between norms of
commercial, civil and labour law concerning
corporate governance
Give the possibility de-jure and de-facto to
trade unions present employees in CG
Promote the voluntary initiative on CSR