Worker-directors can help businesses beat the market: study

New York

GIVING board seats to employees familiar with factory floors can help businesses beat the market, sometimes by huge margins.

That's the finding in a Bloomberg review of countries where worker-directors are common but not required by law. Indices of companies with employees on their boards in Norway, Sweden and Austria each beat benchmark indices in those nations by 30 per cent or more since July 2011.

In Denmark and France, the experiment has gone the other way: Companies with worker representatives have underperformed benchmarks by 8 per cent and 5 per cent. All the indices were weighted by market capitalisation.

The practice, widespread in Germany, has been floated in Britain by Prime Minister Theresa May as a way to make corporate capitalism more egalitarian. In Germany, long the European Union's economic workhorse, the DAX Index has returned 9 per cent…