THE TYPE OF CORPORATE GOVERNANCE AND EMPLOYEE OUTCOMES

1. THE TYPE OF CORPORATE GOVERNANCE AND EMPLOYEE OUTCOMES Menthor: dr. Robert Kaše Co-menthor: mag. Aleksandra Gregorič Grigory Druzhinin Vanja Erjavec Darja Leskovec Luciano Santini Miha Senčar (Team leader) Ljubljana, December 2008

2. CONTENTS Goals of the project Theoretical model Conceptual model Research design Conclusion Type of corporate governance and employee outcomes

3. GOALS OF THE PROJECT • construct a research model • prepare a research design Type of corporate governance and employee outcomes

4. THEORETICAL MODEL BUILDING Type of corporate governance and employee outcomes 4

5. CM: TYPE OF CORPORATE GOVERNANCE Type of corporate governance and employee outcomes

6. CM: MANAGEMENT ACTIONS Organizational structure Leadership style Communication Motivation Performance evaluation Type of corporate governance and employee outcomes

7. CM: EMPLOYEE OUTCOMES Productivity Value-added per employee Commitment Turnover/turnover intentions Emlpoyee satisfaction Type of corporate governance and employee outcomes

8. Type of corporate governance and employee outcomes

9. RESEARCH DESIGN formed on basis of a theoretical model. Main purpose of the research: An explanatory study of different corporate governance’s effect on employee outcomes. Type of corporate governance and employee outcomes 9

10. RESEARCH QUESTION • Does employee co-determination affect employee outcomes? • How do goals affect the management’s leadership style, communication, motivation approach, organizational structure and performance? • How do management actions affect productivity, value-added per employee, commitment, turnover, employee satisfaction and awareness of vision and mission? Type of corporate governance and employee outcomes

11. DATA COLLECTION • Primary data: • Questionnaires • leadership stylequestionnaire • climate research … • Secondary data: • annual reports • public statistic reports, financial publications • previously conducted climate researches • companies’ homepages • iBon, Gvin, Bizi and Statistical Office of Republic of Slovenia data bases. Type of corporate governance and employee outcomes

12. MEASUREMENT • Productivity • Average profit per employee = Total Profit / Number of Employees • Value-aded per employee • VAPE = Total added value in a company / Number of employees • Commitment • Employees’ assessment of different attributes on 5 level Likert scale. • Turnover, turnover intention • Turnover Rate = Total number of employees leaving in the past 12 months / Average number of employees • Employees’ assessment of their turnover intention on 5 level Likert scale. • Turnover intentions is a part of corporate climate researches. • Employee satisfaction • Employees’ assessment of different attributes on 5 level Likert scale. • Part of corporate climate researches. Type of corporate governance and employee outcomes

13. SAMPLING • Companies: • ten Slovenian companies • Type of CG, company, industry • Management: • 2 members of the board • Employees: • actual employee structure for each company • at least 70% of employees Type of corporate governance and employee outcomes

14. RESULTS • Model limitations • dispersion of shareholders stakes • manager’s personalities • managers are all acting rationally? • predictions from small sample of literature and practical cases • Results limitation • relatively small number of companies • one-tier corporate governance Type of corporate governance and employee outcomes

15. CONCLUSION • There is a correlation between type of corporate governance and employee outcomes – a direct and indirect one. • Outputs: • Theoretical model • Research design • Necessary tools to conduct a research • Next step Let’s test if it holds in practice! Type of corporate governance and employee outcomes

16. THANK YOU FOR YOUR ATTENTION! DITIM wishes you a merry christmas and a succesful and healthy year 2009! Ljubljana, December 2008