This symposium piece responds to an article by Kenneth G. Dau-Schmidt titled "Promoting Employee Voice in the American Economy: A Call for Comprehensive Reform." Professor Schmidt argues in favor of increasing employee voice in corporate governance. In this reply, Professor Bagchi distinguishes between "hard voice," "soft voice" and information rights as three variants of employee voice. She casts doubt on the material benefits from Professor Dau-Schmidt's proposals, which focus on hard and soft voice, to either employees or corporate stakeholders more broadly. The present focus of corporate governance on the relationship between shareholders and managers, to the exclusion of employees, may have distributional outcomes that need to be redressed. But while strengthening unions may improve workers' share of firm revenue, it cannot be expected to consistently improve corporate performance. Mandatory rules that give workers direct representation in management have been successful in Europe but are likely to fare less well in the American institutional context. Without strong unions, representatives will either be ineffective or illegitimate. Although not without its own problems, giving workers rights to information about their employers and industries may be a more promising way for workers to exercise agency in the workplace. Information will help workers make good decisions about their own choices where they have limited opportunity to affect corporate policy.
Bagchi, Aditi, "Who Should Talk? What Counts as Employee Voice and Who Stands to Gain" (2011). Faculty Scholarship at Penn Law. 381.