When Labor Has a Voice in Corporate Governance Conclusion:Labor uses its corporate governance voice to maximize the combined value of its contractual and residual claims,and that this often pushes corporate policies away from,rather than toward, shareholder value maximization. Literature Review-pros and cons of strong labor voice in corporate governance Arguments in favor of employee stock ownership Employee equity ownership leads to a convergence of employees'interests with those of shareholders,empowers employees,and lengthens workers'time horizons. Giving labor a role in corporate governance might mitigate labor market imperfections and improve overall economic welfare.(morality/justice-based argument) 0 Counter-argument Entrenched labor,like entrenched management,can destroy value as it strives to maximize its own utility.When Labor Has a Voice in Corporate Governance • Conclusion: Labor uses its corporate governance voice to maximize the combined value of its contractual and residual claims, and that this often pushes corporate policies away from, rather than toward, shareholder value maximization. • Literature Review – pros and cons of strong labor voice in corporate governance • Arguments in favor of employee stock ownership • Employee equity ownership leads to a convergence of employees' interests with those of shareholders, empowers employees, and lengthens workers' time horizons. • Giving labor a role in corporate governance might mitigate labor market imperfections and improve overall economic welfare. (morality/justice-based argument) • Counter-argument • Entrenched labor, like entrenched management, can destroy value as it strives to maximize its own utility