ESOP Governance Collaborators: The Board of Directors  - CLEO Skip to main content


In pure governance terms, the board of directors’ role in any corporation is central to the growth and development of the business. It is the board’s role to ensure, to every extent possible, the development of value for the shareholders of the corporation. Many closely held company boards only meet in the virtual world of corporate counsel’s template minutes and perform their important functions without much more thought than what is required to make a signature.

In ESOP-owned companies (or any structure that provides for broad ownership among employees of the company) the landscape changes, and the independent role of the board of directors as well as its oversight function become significantly more important. We describe the governance structure of an efficiently governed ESOP company as a collaboration because in most cases, the group of three entities that make up the governance group for any company may have adverse interests and must work through them with each role fully and aggressively represented.

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