Shared Capitalism and Corporate Sustainability: Broad-Based Employee Share Ownership, CEO Ownership, and Corporate Environmental Performance

Abstract

This research proposes that broad-based employee share ownership (ESO) affects corporate environmental performance (CEP). Drawing upon corporate governance literature, social exchange theory, and stakeholder utility theory, we propose that employees as owners adopt more favorable attitudes toward beneficial outcomes for CEP, and that the broad-based impact of ESO overwhelms the impact of CEO ownership. Also, we propose that these relationships are contingent upon trade union presence as a form of worker voice that amplifies the ESO influence on CEP. The empirical results from U.S. publicly traded companies from 2009 to 2016 indicate that broad-based ESO is linked to positive CEP by companies, and provides some support for all proposed hypotheses. This study provides scholarly and practical implications for the effects of shared capitalist modes of ownership and employee engagement on corporate sustainability.