Employee governance and the ownership of the firm
Employee governance, which includes employee ownership and employee participation in decision making, is regarded by many as morally preferable to control of corporations by shareholders. However, employee governance is rare in advanced market econo- mies due to its relative inefficiency compared with shareholder governance. Given this inefficiency, should employee governance be given up as an impractical ideal? This article contends that the de- bate over this question is hampered by an inadequate conception of employee governance that fails to take into account the difference between employees and shareholders. It offers a different, more ad- equate conception of employee governance that recognizes a sense in which employees currently have some ownership rights. The argu- ment for this conception of employee governance is built on an expanded understanding of the ownership of a firm. The article also suggests new strategies for strengthening the role of employees in corporate governance.