Keeping them honest? Broad-based employee ownership and earnings management

IF 4.6 3区 管理学 Q1 BUSINESS Corporate Governance-An International Review Pub Date : 2023-08-03 DOI:10.1111/corg.12554
Colin Birkhead
{"title":"Keeping them honest? Broad-based employee ownership and earnings management","authors":"Colin Birkhead","doi":"10.1111/corg.12554","DOIUrl":null,"url":null,"abstract":"<div>\n \n \n <section>\n \n <h3> Research Question/Issue</h3>\n \n <p>Does broad-based employee ownership limit accrual earnings management?</p>\n </section>\n \n <section>\n \n <h3> Research Findings/Insights</h3>\n \n <p>I run a series of random effect and fixed effect models on a sample of S&amp;P 1500 firms between 2008 and 2019 to show that managers at employee-owned firms manipulate earnings less than managers at nonemployee-owned firms. My findings suggest that employee ownership enhances financial transparency and limits the opportunities for managers to misrepresent firm performance.</p>\n </section>\n \n <section>\n \n <h3> Theoretical/Academic Implications</h3>\n \n <p>This study develops and tests theory on employee ownership as a form of internal corporate governance. Equity incentives for executives are typically thought to reduce agency costs. The findings here suggest awarding equity incentives broadly, in which the majority of employees receive equity stakes, may be a more effective method of reducing agency costs.</p>\n </section>\n \n <section>\n \n <h3> Practitioner/Policy Implications</h3>\n \n <p>Earnings management and intentional financial misreporting are often a result of siloed information within firms. Broad-based employee ownership is generally associated with enhanced information flows through greater mutual monitoring and information sharing. Corporate governors interested in reducing managerial malfeasance may find that widely awarding equity to employees is more effective than financially incentivizing individual managers to act in the firm's interests.</p>\n </section>\n </div>","PeriodicalId":48209,"journal":{"name":"Corporate Governance-An International Review","volume":null,"pages":null},"PeriodicalIF":4.6000,"publicationDate":"2023-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Corporate Governance-An International Review","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/corg.12554","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}
引用次数: 0

Abstract

Research Question/Issue

Does broad-based employee ownership limit accrual earnings management?

Research Findings/Insights

I run a series of random effect and fixed effect models on a sample of S&P 1500 firms between 2008 and 2019 to show that managers at employee-owned firms manipulate earnings less than managers at nonemployee-owned firms. My findings suggest that employee ownership enhances financial transparency and limits the opportunities for managers to misrepresent firm performance.

Theoretical/Academic Implications

This study develops and tests theory on employee ownership as a form of internal corporate governance. Equity incentives for executives are typically thought to reduce agency costs. The findings here suggest awarding equity incentives broadly, in which the majority of employees receive equity stakes, may be a more effective method of reducing agency costs.

Practitioner/Policy Implications

Earnings management and intentional financial misreporting are often a result of siloed information within firms. Broad-based employee ownership is generally associated with enhanced information flows through greater mutual monitoring and information sharing. Corporate governors interested in reducing managerial malfeasance may find that widely awarding equity to employees is more effective than financially incentivizing individual managers to act in the firm's interests.

查看原文
分享 分享
微信好友 朋友圈 QQ好友 复制链接
本刊更多论文
让他们保持诚实?广泛的员工所有权和收益管理
广泛的员工所有权是否限制了应计收益管理?我在2008年至2019年间对标准普尔1500指数成分股公司的样本进行了一系列随机效应和固定效应模型,以表明员工所有制公司的经理操纵收益的程度低于非员工所有制企业的经理。我的研究结果表明,员工所有权提高了财务透明度,并限制了经理歪曲公司业绩的机会。本研究发展并检验了员工所有权作为公司内部治理形式的理论。对高管的股权激励通常被认为可以降低代理成本。研究结果表明,广泛授予股权激励,其中大多数员工获得股权,可能是降低代理成本的更有效方法。盈余管理和故意的财务误报往往是公司内部孤立信息的结果。广泛的员工所有权通常与通过加强相互监控和信息共享来增强信息流有关。对减少管理渎职行为感兴趣的公司董事可能会发现,将股权广泛授予员工比在财务上激励个别经理为公司利益行事更有效。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 去求助
来源期刊
CiteScore
7.00
自引率
11.30%
发文量
79
期刊介绍: The mission of Corporate Governance: An International Review is to publish cutting-edge international business research on the phenomena of comparative corporate governance throughout the global economy. Our ultimate goal is a rigorous and relevant global theory of corporate governance. We define corporate governance broadly as the exercise of power over corporate entities so as to increase the value provided to the organization"s various stakeholders, as well as making those stakeholders accountable for acting responsibly with regard to the protection, generation, and distribution of wealth invested in the firm. Because of this broad conceptualization, a wide variety of academic disciplines can contribute to our understanding.
期刊最新文献
ESG Ratings and Dividend Changes: Evidence From the Initiation of Nonfinancial Agency Coverage Issue Information Government as a Source of Equity Capital for Entrepreneurs: Evidence From Entrepreneurial Exits The Role of Employee Ownership, Financial Participation, and Decision‐Making in Corporate Governance: A Multilevel Review and Research Agenda CEO Compensation Contracts in Family Versus Nonfamily Firms: The Use of Nonfinancial Performance Measures
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
现在去查看 取消
×
提示
确定
0
微信
客服QQ
Book学术公众号 扫码关注我们
反馈
×
意见反馈
请填写您的意见或建议
请填写您的手机或邮箱
已复制链接
已复制链接
快去分享给好友吧!
我知道了
×
扫码分享
扫码分享
Book学术官方微信
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术
文献互助 智能选刊 最新文献 互助须知 联系我们:info@booksci.cn
Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。
Copyright © 2023 Book学术 All rights reserved.
ghs 京公网安备 11010802042870号 京ICP备2023020795号-1