Aleksandra Gregoric

Block trades and the benefits of control in Slovenia

Ownership and control have been concentrating in most transition countries. The consolidation of control introduces changes in the power distribution within privatized firms and, most importantly, redirects the corporate governance problem to a conflict between large and small shareholders. In this study, we evaluate the ownership changes in Slovenian privatized firms through an analysis of stock price reactions to the entrance of a new blockholder (the shared benefits of control) and through an estimation of the premiums paid for large blocks (the private benefits of control). We provide evidence of and discuss the reasons for the failures of the privatization investment funds in implementing control over firm managers and in promoting the restructuring of firms in the first post-privatization years.

From Social to Private Ownership: Multiple Blockholders in Slovenian Unlisted Firms

This paper studies the ownership structures of unlisted privatized firms in Slovenia. On the basis of official ownership records for all nonfinancial firms over a six-year period (1999-2004), we explore the factors responsible for the concentration of ownership and for the dissolution of the multiple blockholder structures that these firms were assigned at privatization. We observe significant path dependence: patterns of ownership and control are in part determined by the persistence of the initial privatization owners (state funds, privatization investment funds, employees, and managers) as firm blockholders. We also find that ownership concentrates less in larger, riskier, and better-performing firms. Multiple blockholders remain present in the firms in which the two largest owners are of the same type, which presumably makes it easier for them to control in coalition.

The Power of Non-Controlling Stake: Below-Parity Representation of Employees on Corporate Boards

We discuss the potential for below-parity employee representation in the board of directors by analyzing the workers’ choice to adopt this mechanism of employee voice when employee board representation is optional and employees are granted only a minor share of board seats. Combining the stakeholder and institutional theory we reason that, under shareholder supremacy, the effectiveness of this mechanism and, consequently, the utility that the employees gain from board representation will be higher when workers hold firm-specific human capital, and in the presence of institutions that legitimize employees’ voice and consequently corroborate their influence on board. We conjecture how these factors vary with region, firm and worker characteristics. We test our propositions using the Danish employer-employee linked data for public and private firms.

Women’s Path to the Boardroom: The Case of Denmark

The representation of women in corporate directorships in Denmark has only been improving slowly over the last few years. Despite the slow progress at home and more active policies in neighboring countries and at the EU level, the Danish government has thus far resisted implementing board gender quotas. This chapter reviews the rules, trends and main debates surrounding board gender diversity in Denmark. We describe the main features of the country’s corporate governance system and overview the gender composition of Danish boards and the country’s efforts with regard to women’s representation in the top positions. We suggest that the low incidence of Danish women on boards is due to both the shortage of female candidates, especially women with leadership skills, as well as the persisting preferences of firms for “traditional” types of director characteristics and skills. We argue that further efforts in Denmark need to be directed toward facilitating women’s promotion to leadership positions, and also toward increasing firms’ (owners’) awareness of the benefits of gender-diverse boards.

Changing the Corporate Elite? Not so Easy: Female Directors’ Appointments onto Corporate Boards

Scholars have previously investigated country and organizational-level factors associated with the incidence of female directors on boards. These studies, however, cannot explain why, in countries with strong gender equality and pressure for female directorships, firms are still hesitant to promote new women to their boards. To address this issue we – in this study – introduce the cognitive and affective processes related to directors’ identification with the traditional corporate elite as an explanation for the slow organizational response to pressure for gender diversity on boards. We bridge the social identity and critical mass theory to further show how these responses may vary with the current composition of the board. Viewing the board as a locus for the maintenance of the positive distinctiveness of the established corporate elite, we conjecture that new female appointments will not only depend on the current share of women on board but also on the current (minority) share of board positions held by male directors who are not prototypical of the established elite. We also uncover how this relationship is moderated by the share of institutional investors’ ownership. We test and support these propositions on a sample of 387 publicly traded Nordic corporations during 2001–2008.