Worker representation on corporate boards of directors, also known as board-level employee representation (BLER) refers to the right of workers to vote for representatives on a

board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit orga ...

in corporate law. In 2018, a majority of

Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...

, and a majority of countries in the

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are located primarily in Europe, Europe. The union has a total area of ...

, had some form of law guaranteeing the right of workers to vote for board representation. Together with a right to elect work councils, this is often called "

codetermination In corporate governance, codetermination (also "copartnership" or "worker participation") is a practice where workers of an enterprise have the right to vote for representatives on the board of directors in a company. It also refers to staff having ...

Overview

The following is a list of 35 countries in the

and their practices of worker representation on corporate boards of directors.

History

Some of the first codetermination laws emerged in

universities in the UK Universities in the United Kingdom have generally been instituted by royal charter, papal bull, Act of Parliament, or an instrument of government under the Further and Higher Education Act 1992 or the Higher Education and Research Act 2017. ...

during the 19th century, such as the

Oxford University Act 1854 The Oxford University Act 185417 & 18 Vict c 81, sometimes called the Oxford University Reform Act 1854 or the University Reform Act 1854,Sabine Chaouche. Student Consumer Culture in Nineteenth-Century Oxford. Palgrave Macmillan. 2020p 231 Assoc ...

and the

Cambridge University Act 1856 The Cambridge University Act 1856The citation of this Act by this short title was authorised by the Short Titles Act 1896, section 1 and the first schedule. Due to the repeal of those provisions it is now authorised by section 19(2) of the Inte ...

. Further Acts included the

South Metropolitan Gas Act 1896 South is one of the cardinal directions or compass points. The direction is the opposite of north and is perpendicular to both east and west. Etymology The word ''south'' comes from Old English ''sūþ'', from earlier Proto-Germanic ''*sunþaz' ...

and the

Port of London Act 1908 The Port of London Act 1908 (8 Edw 7, c 68) was an Act of Parliament of the United Kingdom, which established the Port of London Authority and regulated corporate governance at the Port of London. It merged numerous inefficient and overlapping p ...

. In Germany, there were experiments with worker representation through work councils over the late 19th century, after the first attempts to introduce worker voice by an ex-member of the

Frankfurt Parliament The Frankfurt Parliament (german: Frankfurter Nationalversammlung, literally ''Frankfurt National Assembly'') was the first freely elected parliament for all German states, including the German-populated areas of Austria-Hungary, elected on 1 Ma ...

named Carl Degenkolb. At the end of

World War I World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was List of wars and anthropogenic disasters by death toll, one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, ...

, the German trade unions made an historic

collective agreement A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with an ...

with representatives of German business for full partnership in economic management throughout the country. This was put into the

Weimar Constitution The Constitution of the German Reich (german: Die Verfassung des Deutschen Reichs), usually known as the Weimar Constitution (''Weimarer Verfassung''), was the constitution that governed Germany during the Weimar Republic era (1919–1933). The c ...

article 165, and resulted in a work council law in 1920, and a board representation law in 1922. The fascist government abolished codetermination in 1934, but after

World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the World War II by country, vast majority of the world's countries—including all of the great power ...

, German unions again made collective agreements to resurrect work councils and board representation. These agreements were codified in law in 1951 and 1952. In most countries around Europe, different forms board representation law spread slowly, especially from the 1970s. In the UK there were repeated experiments from iron and steel to the post office, with worker directors. However, after the

Bullock Report The ''Report of the committee of inquiry on industrial democracy'' (1977) Cmnd 6706, also the Bullock Report for short, was a report proposing for a form of worker participation or workers' control, chaired by Alan Bullock. The idea was seen by s ...

of 1977 failed to pass and

Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the first female British prime ...

won the 1979 election, almost all worker participation was ended. Germany recast and extended its laws in 1972 and 1976. The

European Commission The European Commission (EC) is the executive of the European Union (EU). It operates as a cabinet government, with 27 members of the Commission (informally known as "Commissioners") headed by a President. It includes an administrative body ...

did propose a

Draft Fifth Company Law Directive The Draft Fifth Company Law Directive (1972–2001) was a European Union proposed directive for a right of co-determination in large companies, i.e. for employees to vote for boards of directors. The draft went through several major revisions, but ...

, but it did not complete passage. In the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...

, growing interest in worker "involvement" through Scanlon plans led to unions such as the

United Steelworkers The United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, commonly known as the United Steelworkers (USW), is a general trade union with members across North America. Headquar ...

Chrysler Stellantis North America (officially FCA US and formerly Chrysler ()) is one of the " Big Three" automobile manufacturers in the United States, headquartered in Auburn Hills, Michigan. It is the American subsidiary of the multinational automotiv ...

, or at

United Airlines United Airlines, Inc. (commonly referred to as United), is a major American airline headquartered at the Willis Tower in Chicago, Illinois.

to negotiate board representation, although usually this was forcibly linked to employee share schemes. Notably, the share scheme at

Enron Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth, both relatively small regional compani ...

failed in 2003. Almost all modern worker representation laws enable votes without any requirement to invest money. In 2013, France became the largest country to create a modern board representation law to mandate workers with equal rights to all other directors to be on boards.

Theoretical explanation

There are three competing interpretations regarding the participation of employees: *''Unitarian'': The idea that the interests of

employees Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any ot ...

and employers are fully compatible and there may be a

cooperation Cooperation (written as co-operation in British English) is the process of groups of organisms working or acting together for common, mutual, or some underlying benefit, as opposed to working in competition for selfish benefit. Many animal a ...

industrial relations Industrial relations or employment relations is the multidisciplinary academic field that studies the employment relationship; that is, the complex interrelations between employers and employees, labor/trade unions, employer organizations, ...

*'' Pluralistic'': Pluralists think that while searching for mutual benefit, both sides can look for

compromise To compromise is to make a deal between different parties where each party gives up part of their demand. In arguments, compromise is a concept of finding agreement through communication, through a mutual acceptance of terms—often involving va ...

s and common solutions; however, they cannot lean solely on the initiative of employers. The followers of such standpoint adheres to the notion, that the best form of employee participation in

is the operation of

trade unions A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...

in the companies and negotiations on the basis of

*''Critical'': It is interpreted that the interests of employees and employers differ radically, due to the fact that industrial relations in essence are exploitable and inhumane.Civinskas, R.; Dvorak, J. In Search of Employee Perspective: Understanding How Lithuanian Companies Use Employees Representatives in the Adoption of Company’s Decisions. Adm. Sci. 2019, 9, 78
/ref>

Notes

{{Reflist, 2

References

*J Waddington (ed.), 'European board-level employee representation: national variations in influence and power' (2018), Kluwer Law international edition

*J Waddington, A Conchon, 'Board-level employee representation in Europe: priorities, power and articulation' (2016), Routledge editio

*I Ferreras, ''Firms as Political Entities: Saving Democracy through Economic Bicameralism'' (2017) *TH Hammer, SC Currall and RN Stern, ‘Worker Representation on Boards of Directors: A Study of Competing Roles’ (1991) 44(4) Industrial and Labor Relations Review 661-680 *LW Hunter, ‘Can Strategic Participation be Institutionalized? Union Representation on American Corporate Boards’ (1998) 51(4) Industrial and Labor Relations Review 557-578 *E McGaughey, 'Democracy in America at Work: The History of Labor's Vote in Corporate Governance' (2019
42 Seattle University Law Review 697
*E McGaughey, 'The Codetermination Bargains: The History of German Corporate and Labour Law' (2016
23(1) Columbia Journal of European Law 135
*E McGaughey, 'Votes at Work in Britain: Shareholder Monopolisation and the ‘Single Channel’' (2017
46(4) Industrial Law Journal 444
*RB McKersie, ‘Union-Nominated Directors: A New Voice in Corporate Governance’ (1 April 1999) MIT Working Paper *RB McKersie, ‘Labor's voice at the strategic level of the firm’ (2001) 7 Transfer: European Review of Labour and Research 480 * Hans Jürgen Teuteberg, HJ Teuteberg, ‘Zur Entstehungsgeschichte der ersten betrieblichen Arbeitervertretungen in Deutschland’ (1960) 11 Soziale Welt 69 * Hans Jürgen Teuteberg, HJ Teuteberg, ''Geschichte der Industriellen Mitbestimmung in Deutschland'' (1961) *S Webb and B Webb, ''

Industrial Democracy Industrial democracy is an arrangement which involves workers making decisions, sharing responsibility and authority in the workplace. While in participative management organizational designs workers are listened to and take part in the decisi ...

'' (1920) *S Webb and B Webb, ''

The History of Trade Unionism ''The History of Trade Unionism'' (1894, new edition 1920) is a book by Sidney and Beatrice Webb on the British trade union movement's development before 1920. Outline First published in 1894, it is a detailed and influential accounting of the ...

'' (1920) Appendix VIII

External links

worker-participation.eu
*Z Adams, L Bishop and

S Deakin Simon Deakin (born 26 March 1961) is Professor of Law at the Faculty of Law, Cambridge, and a Fellow of Peterhouse, Cambridge. He is regarded as the leading expert in the field of employment law and labour law and is the programme director in t ...