Government As A Shareholder In Listed Companies: Consequences On Performance, Governance And Repartition Of Power Between Stakeholders

This paper studies the consequences of having a government in the shareholding of a company, in term of performance, governance structure and firms objectives. In an empirical part, it compares listed firms owned by the French government to comparable private companies. It focuses on four dimensions: financial performance, financial policies, corporate governance and the repartition of power between three main stakeholders of the firm: shareholders, top managers and employees. Results show that performance and financial policies of public firms are close to private companies ones. However, the government induces a different governance structure and repartition of power and wealth between managers and employees. Thus, employees appear to capture a larger part of profit and power to the detriment of top managers. They are better paid and participate more to the decision process than in equivalent private firms. However, shareholders do not seem to suffer from this different sharing out. The French government treats himself as any private shareholder who seeks profit: dividend policy and stock price performance do not differ from a private company.