Corporate Governance and the Role of the Employee

PARTNERSHIP AT WORK: THE CHALLENGE OF EMPLOYEE DEMOCRACY: LABOR LAW ESSAYS, Patmore, Gollan (eds), Pluto Press: Australia, p. 110, 2003

17 Pages Posted: 1 Mar 2006

See all articles by Jennifer G. Hill

Jennifer G. Hill

Monash University - Faculty of Law; European Corporate Governance Institute (ECGI)


Employees have traditionally been viewed as "outsiders" to the corporation. Discussion of their role and responsibilities within the enterprise rarely occupies much space, or concern, in US, UK and Australian corporate law texts. This is replicated in modern theories of the corporation, where the dominant paradigm of corporate governance adopts a narrow approach, which is restricted to the relationship between directors and shareholders.

Comparative corporate governance, however, provides a different perspective on the position of employees vis-à-vis the corporation. One of the benefits of comparative corporate governance has been to show us a range of possible governance solutions to different problems. The paper examines ways in which the interests of the employee could be integrated within the enterprise. First, it discusses the position of the employee under both corporate and labor law principles. Secondly, it examines how the position of the employee might be treated differently through the lens of corporate law, by expanding the scope of directors' fiduciary duties, as contemplated by Professor Dodd in the classic Berle-Dodd debate. Finally, the chapter considers several recent legal developments and reform proposals outside corporate law, which affect both the status of employee interests and employee participatory rights in corporate governance. These recent developments target, and attempt to redress, specific areas of employee vulnerability and social concern, which, it can be argued, result directly from employees' "outsider status" under contemporary corporate law principles.

Keywords: Corporate governance, comparative corporate governance, corporate theory, shareholders, employees, enterprise bargaining, industrial democracy, workers, fiduciary duties, corporate crime

JEL Classification: D70, G30, G 34, J 38, J 44, K22, K 31, K 33, M 14

Suggested Citation

Hill, Jennifer G., Corporate Governance and the Role of the Employee. Available at SSRN:

Jennifer G. Hill (Contact Author)

Monash University - Faculty of Law ( email )

Wellington Road
Clayton, Victoria 3800

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

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