In 18 of the 28 countries that make up the European Union, employees of a company are legally granted the right to be represented on the corporate board. Usually it is Germany that is presented as the main defender of this system, which is called “co-determination.’’
Germany was the first country in Europe to broadly mandate employee representatives on the supervisory boards that hire CEOs and set company policy in 1976.
To this day, Germany grants its employees more far-reaching, board-level representation than do other European countries. In companies with more than 2,000 employees, half of the seats on a German supervisory board are occupied by employee representatives.
Deadlocked votes are sometimes decided by the chairperson of the supervisory board, whose vote is counted twice. But most German boards strive for consensual decisions and this remedy is only used as a last resort. In fact, it is very rare that decisions are taken against the unanimous wishes of employees.