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 Impact of employee share ownership on bank risk

A team of researchers from the Universities of Limoges and Bourgogne Franche-Comté in France (Professors Laetitia Lepetit, Phan Huy Hieu Tran and Thu Ha Tran) has just published its results.

To examine the impact of both executive and non-executive employee ownership on bank risk, as well as to explore the different underlying channels, they used information in the European Federation of Employee Share Ownership (EFES) database.

Using data from 2005 to 2019, they find that both executive and non-executive ownership are associated with lower bank risk, depending on employee ability and incentives to take risks.

They find that an increase in executive and non-executive employee ownership leads to a decrease in insolvency risk and overall bank risk.

Therefore, the results provide evidence that holding shares incentivizes executive and non-executive bank employees to pursue strategies that reduce risk.

The conclusion of the work is clear:
"Our results indicate that policymakers should encourage broad-based employee ownership plans in the banking industry."

Full publication:
Executive and non-executive employee ownership and bank risk: Evidence from European banks

Press review
We have a selection of 26 remarkable articles in 9 countries in December 2023: Bulgaria, Canada, Czechia, France, Italy, Poland, Tunisia, UK, USA.
Bulgaria: Advocating for employee share ownership in startups.
Canada: The new federal tax exemption for employee ownership trusts will spur retiring business owners to sell their companies to workers.
Czechia: Here is finally the long-awaited tax reform to facilitate employee share ownership in startups.
France: Successful new employee share plans for Vallourec, for Veolia, for Spie, for Stellantis, for Air France-KLM.
Italy: Employee ownership is finally coming to Canada! Successful employee share plans for Mediobanca and for Stellantis.
Poland: Solidarnosc Union calls for increasing employee share ownership in Poland.
Tunisia: First employee share plan for Attijari Bank.
UK: Thanks to the Employee Ownership Trust scheme, every day a new SME is transferred to employees. This month, among others, the case of: Hudgell Solicitors, TBM Marketing Group, Ellwood Atfield Head-hunters, Charity People Recruitment, Interact Contact Centres, Thomas Carroll Insurances, Optagon Roofing Supplier.
USA: The ESOP plan, how does it work? Unpacking the myths of employee ownership. Employee ownership is more often figuring into private equity value-creation strategies.

The full press review is available on:


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   With best regards



Marc Mathieu
Secretary General
Avenue Voltaire 135, B-1030 Brussels
Tel: +32 (0)2 242 64 30 - Fax: +32 (0)2 791 96 00
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EFES' objective is to act as the umbrella organization of employee owners, companies and all persons, trade unions, experts, researchers, institutions looking to promote employee share ownership and participation in Europe.