Corporate Disclosure by Publicly Traded ESOP Companies

Francesco Bova, an assistant professor of accounting at the University of Toronto and a Kelso Fellow for research in employee ownership, drew on lists provided by the NCEO to track the disclosure practices of 279 public companies with varying degrees of employee ownership. He found that ESOPs have a positive impact on the quality and quantity of disclosure among unionized companies, but no measurable impact among non-union companies. He concludes that "employee ownership appears to benefit the firm not only by aligning goals between the firm and its employees but also by increasing disclosure from the firm to all of its stakeholders.... [E]mployee ownership, through its ability to improve disclosure quality, appears to generate market outcomes that benefit shareholders." The study is available in Employee Ownership and Shared Capitalism, edited by Edward J. Carberry (Cornell University Press, 2011).