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Board-level Representation

Arrangements for employee representation at board level in the 28 EU countries plus Norway can be divided into three groups. There is a group of ten countries where there is no board level representation and a further group of five, where board level representation is limited to state-owned or privatised companies. However, the biggest group of 14 states provides for employees to be represented on the boards of private companies, once they have reached a certain size. These thresholds vary greatly as do other elements of the national arrangements.

Employee representatives at board level

A majority of the 28 states of the EU plus Norway provide for employee representation at board level, although in some this is limited to companies owned in whole or part by the state or privatised companies.

There are only ten countries without legislation or other agreed arrangements providing for board level representation. These are Belgium, Bulgaria, Cyprus, Estonia, Italy, Latvia, Lithuania, Malta, Romania and the United Kingdom. This does not mean that there are absolutely no employee representatives at board level in these countries. In Belgium, in a handful of publicly-owned companies unions have an advisory role at board level; in Cyprus, trade union representatives have been appointed to the boards of two banks, and, even in the UK, there is at least one quoted public limited company, with an employee director. However, these are individual rather than generalised arrangements.

There are a further five countries, where board level representation is limited to some state-owned or municipally-owned companies. These are Greece, Ireland, Poland (where partially-privatised companies are also covered), Portugal and Spain (where local savings banks plus some publicly owned companies have board level representation).

This leaves 14 countries, the largest group, where employee representation at board level extends to private companies, although, in some of them, there are different arrangements or different employment thresholds for state-owned companies. The countries in this group are: Austria, Croatia, the Czech Republic (although new legislation will make this optional from 2014), Denmark, Finland, France (where legislation in 2013 introduced a universal right to board level representation in very large companies for the first time), Germany, Hungary, Luxembourg, the Netherlands, Norway, Slovakia, Slovenia and Sweden. The thresholds for representation range from 25 employees in Sweden to 5,000 in France.

As well as the thresholds, there are differences in the proportion of board seats taken by employee representatives, ranging from one in 12, in very large private sector companies in France, and one out of an undefined number in Croatia, to a half, in some companies in Germany and Slovenia. There are also differences in whether the representatives take their seats on a supervisory board, as in Austria and Slovakia, or on a single tier board, as in Norway or Sweden.

These differences are examined at greater length is the country sections, as well as other differences. These include the limits on the powers of employee members (in Denmark, Finland and Sweden, for example, they cannot deal with collective bargaining issues), and the arrangements for their appointments (in the Netherlands neither employees nor those who bargain with the company are eligible, while the German rules specifically provide for the election of external union officials in the case of larger companies).

Country

Type of companies covered

Extent of representation

Austria

From 300 employees (limited companies); no employee threshold for public limited companies

A third of supervisory board

Belgium

No general board level representation, but a very small number of publicly-owned companies have employee representatives at board level.

Bulgaria

No board level representation but employees have some right to be heard at shareholders’ general meetings

Croatia

From 200 employees (limited companies); no employee threshold for public limited companies

One member of the board

Cyprus

No statutory board level representation

Czech Republic

State-owned companies and currently private companies from 50 employees. However, the obligation for private companies will end in January 2014

A third of supervisory board (can be increased to half voluntarily)

Denmark

From 35 employees

Between two members and one third of board

Estonia

No board level representation

Finland

From 150 employees

A fifth of members of board or other decision making body

France

Currently state-owned and privatised companies but in future all private companies with 5,000 or more employees in France (10,000 worldwide)

A third of board in state-owned companies, around a fifth in privatised companies; at least one or two board members in private companies with 5,000 or more employees in France (or 10,000 or more worldwide)

Germany

From 500 employees

A third of supervisory board in companies with more than 500; half in companies with more than 2,000; special arrangements including management board member in coal, iron and steel companies

Greece

State-owned companies

One or two board members

Hungary

From 200 employees

A third of members on supervisory board (fewer rights in single tier board system)

Ireland

State-owned companies

A third of board (less in some smaller companies)

Italy

No board level representation

Latvia

No board level representation

Lithuania

No board level representation

Luxembourg

From 1,000 employees or with state involvement

A third of board in companies with 1,000 plus employees, up to a third in others

Malta

No board level representation other than in companies owned by the union or Labour Party

Netherlands

From 100 employees

Up to a third of the board

Norway

From 30 employees

One director in companies with 30 to 50 employees; one third of the seats in companies with more than 50, with the possibility of an extra seat in companies with more than 200

Poland

State-owned and partially privatised companies

A workers’ council has substantial powers in state-owned companies; in partially privatised companies employees have between 40% and about a third of seats on supervisory board and a seat on management board

Portugal

State-owned companies

Right to be present in constitution and in legislation but rarely realised and only have consultative role

Romania

No board level representation but unions can be invited to meetings of the board to discuss specific issues

Slovakia

State-owned companies and private sector companies from 50 employees

Half supervisory board in state-owned companies; a third in private sector (can be increased to half voluntarily)

Slovenia

Companies with supervisory board; and companies with single tier board from 50 employees

Between a third and a half of seats in companies with supervisory board plus management board member if more than 500 employees; around a third in companies with single tier board

Spain

Some state-owned companies and local savings banks

Two members in state-owned companies; between 5% and 15% in savings banks

Sweden

From 25 employees

Around a third of single tier board

United Kingdom

No board level representation

MAP: Board-level representation in the European Economic Area

In 19 of the 31 members states of the European Economic Area countries there exists legislation on employee board-level representation. Even in countries that have no legal regulations, such as Italy and Belgium, instances may be found (albeit exceptional) of workers’ representatives sitting on the company’s board as the result of a collective agreement. Available in EN, DE and FR.

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TABLE: Worker board-level participation in the 31 European Economic Area countries

The table comprises information on board-level representation in the 28 EU member states and Norway. It is available in ENGLISH, GERMAN and FRENCH.

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References - Employee participation and corporate governance

An overview on transversal and national studies on employee participation at board level and corporate governance.

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L. Fulton (2013) Worker representation in Europe. Labour Research Department and ETUI. Produced with the assistance of the SEEurope Network, online publication available at http://www.worker-participation.eu/National-Industrial-Relations.