What We Do and Don’t Know About Worker Representation on Boards

Appointing workers’ representatives to company boards is becoming a trending topic. But what do we know about it? For one thing, There is no one model for worker representation on boards. Instead, corporate governance is just one part of a “package” of economic institutions. We do know that poor relations between labor and management lead to higher unemployment, and that employee representation on boards is neither hugely positive or negative for corporate performance. Does this mean that having workers on corporate boards is a good or a bad idea? The evidence suggests that it’s not a silver bullet and that we should should keep our expectations in check when considering reforms that require it.