Boardroom battles

It's Time to Rethink Co-Determination

Boardmembers generic Wavebreak Media
Is co-determination good for the company's health?
  • Why it matters

    Why it matters

    Having inexperienced but powerful worker representatives on supervisory boards could hold back modernization at large German companies.

  • Facts

    Facts

    • Co-determination gives workers the right to participate in a company’s senior management.
    • German firms with more than 2,000 employees must appoint workers to their supervisory boards.
    • Critics question whether workers now have sufficient skills to contribute to modern, expert boards.
  • Audio

    Audio

  • Pdf

 

Bernd Osterloh is an important man. As the chairman of the General and Group Works Council of the Volkswagen Group, he represents the interests of 600,000 auto workers across the globe.

He also derives great power from his seat on the company’s supervisory (non-executive) board. Together with Berthold Huber, the former chairman of the influential IG Metall union, Mr. Osterloh leads the ten-person bloc of employees on the board. He is also a member of the immediate decision-makers’ circle, the supervisory board presidium.

This makes him a power player in the current battle over the future of Volkswagen, which has seen CEO Martin Winterkorn and chairman Ferdinand Piëch fall out royally in the past few days. No board member can be removed without his support, and no new one can be installed.

But should a works council member have so much influence over company decisions?

The simple answer is yes, because the law wants it so. The goal is a balance between the interests of capital and labor. There are just as many representatives of the owners sitting across from the employees. In large companies, an employees’ representative is often the deputy supervisory-board chairman – at Volkswagen, it is Mr. Huber.

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