Employees, performance and corporate governance.

Summary The development of forms of employee participation in the firm since the post-war period has raised new issues in terms of employee behavior. Whether they are shareholders, directors or simple employees without capital and voting rights, employees are no longer observed as a factor of production as in the classical microeconomic literature but, from now on, as a real stakeholder in the firm, acting on both the performance and the governance of firms. In terms of employee��shareholding, we show that its importance encourages firms to maintain stock prices at lower levels. Moreover, we observe that capital increases reserved for employees are essentially carried out by firms familiar with this type of operation and that the secure nature of the offer is a source of greater subscription of shares. Regarding employee representation on boards of directors and supervisory boards, our results show that directors elected by employees significantly reduce the amounts paid to shareholders in the form of dividends and share buybacks, and sit on larger boards that require more meetings. Directors representing employee shareholders, on the other hand, have a positive influence on operational and stock market performance. Finally, we show that labor relations are more consensual in family firms, which translates into less frequent, less intense and shorter conflicts.