"Employees' participation is an important tool to ensure a good Corporate Governance system in an organization". Discuss and highlight the role played by the employees in ensuring a good Corporate Governance in a company

There is a growing belief that capital contributed by shareholders alone cannot do miracle and labour is also an equally important factor of the production. Employee participation in Corporate Governance system is also playing an important role by ways of the following: Right to consultation - where employees must be consulted on certain management decisions. This right increases transparency of management decisions and allows employee opinion to ameliorate the asymmetry of information between management and the market. Right to nominate/vote for supervisory board members - In many cases employee participation on the board is mandated. This right creates a check and balance system between management and the supervisory board, which in turn creates the perception of greater fairness. Compensation/privatization programs that make employees holders of shares, thereby empowering employees to elect the board members, which, in turn holds management responsible. Participation in the capital: Employees may be partner in the capital contribution. They may be given the shares under the ESOP scheme. This will create the belongingness of the ownership concept among the employees meaning thereby owner as well as employee. This will lead to the improved employee commitment and buy-in to management's goals side by side the alignment of interest between employees and shareholders. It may support the emergence of more transparent and effective corporate governance. Profit sharing: The profit-sharing plans should be broad-based (all or most employees) rather than for executives only. This can be done in a variety of ways like: Cash-based sharing of annual profits, deferred profit-sharing. The advantages of this are: it encourages employee involvement, improves motivation, improves distribution of wealth and wage flexibility and can improve firm performance. Whistle Blower Policy: A whistle blower is the one who exposes wrongdoing, fraud, corruption or mismanagement in an organization. A whistle blower is a person who publicly complains/discloses the concealed misconduct on the part of an organization or body of people, usually from within that same organisation. Whistle blower may be an employee, former employee, vendor, customer or other stakeholder. Whistle blowers are important stakeholders as they can work as a tool for authorities to get information of deviant behaviour or practices in organizations.