The Role of Employee Ownership, Financial Participation, and Decision‐Making in Corporate Governance: A Multilevel Review and Research Agenda

Research Question/IssueThe allocation of return and control rights to employees has been somewhat overlooked in governance literature, but it has garnered interest from scholars across various fields. Our analysis of five decades of research integrates and juxtaposes theory and evidence from three independent yet intertwined domains: employee ownership, financial participation, and decision‐making. Our work synthesizes an extensive body of past and current findings and introduces a multilevel contingency framework to formulate novel theoretical, methodological, and contextual remedies.Research Findings/InsightsWe conducted a multilevel analysis of 184 articles published in reputable journals. Our results reveal complementary and substitutive relationships between employee financial participation and decision‐making and show that various contextual variables operating at different levels (i.e., individual, company and country) jointly impact employees behaviors and firm outcomes. Our findings help explain the mixed or ambiguous results of previous studies and offer novel theoretical and methodological pathways for future research.Theoretical/Academic ImplicationsOur study invites scholars to further investigate the antecedents and consequences of employee ownership, financial participation and decision‐making. Specifically, we recommend adopting theories and methods that illuminate the complex nature of the employee ownership construct, develop a multilevel understanding of the phenomenon, and analyze the moderating effects of various contextual variables.Practitioner/Policy ImplicationsInsights from our review can assist practitioners and policymakers in designing plans that allocate either one or both of ownership rights to employees, enhancing their understanding of the role and impact of diverse contextual factors operating at various levels.