This is the only way for employees to stay well-informed about what’s happening in the company. It’s the only way they can consult with their works council and have a voice in dealing with company management.
Both forms of co-determination—worksite co-determination and corporate co-determination—ensure democratic and fair cooperation within companies. The extent to which co-determination rights can be expanded is a matter of debate, particularly regarding the participation of employee representatives on corporate supervisory boards. We are committed to preserving and expanding democratic co-determination in both areas.
Workshop-Level Co-determination
The Works Constitution Act was enacted in 1972. It governs cooperation between employers, employees, the works council, labor unions, and employer associations in the private sector. Among other things, it sets forth the duties, rights, and election of the works council, as well as the employer’s obligation to provide information to employees. Under the law, a works council is elected in companies that employ at least five employees.
Corporate Co-determination
In Germany, co-determination in corporations with more than 500 employees is regulated by the supervisory board. This board is composed of employees and shareholders. Corporate co-determination governs, among other things, the representation of employees through elections to the supervisory board. It appoints, advises, and oversees the executive board and audits the corporation’s annual financial statements, but may not directly intervene in day-to-day management. The proportion of seats on the supervisory board depends on the number of employees at the company. In simple co-determination, the management side holds a majority; in parity-based co-determination, the employee side accounts for 50 percent of the supervisory board members.
694 Companies with Parity-Based Supervisory Boards
A recent analysis by Dr. Roland Köstler, an expert in corporate law at the Hans Böckler Foundation, shows that just under 700 companies in Germany have equally represented supervisory boards. Of these, 463 have a supervisory board with 12 members: Six representatives of the shareholders sit alongside six employee representatives, one of whom represents senior executives. 96 companies have a supervisory board with 16 members, and 135 have a 20-member supervisory board.
90 Percent of Supervisory Board Compensation Goes to the Hans Böckler Foundation
Employee representatives retain only a small portion of the supervisory board compensation for themselves. Our members who serve on a supervisory board as employee representatives must account for the proper remittance of their bonuses. If they receive more than 3,500 euros per year for their role as a regular supervisory board member, or more than 5,250 euros as a vice chair, they must contribute 90 percent of their supervisory board compensation to the union-affiliated Hans Böckler Foundation. Those who receive less must still contribute 10 percent of their total. In its member magazine “metallzeitung,” IG Metall regularly publishes the bonus list, which shows which supervisory board members have complied with the contribution requirement.
