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In focus: the Europeanisation of board-level employee representation

What do we know about board-level employee representatives in SEs? The EWPCC has identified at least 156 worker representatives on the supervisory and administrative boards of SEs. Their share ranges from a single member to up to half of the board seats. The most fundamental innovation brought about by the SE legislation was the possibility to internationalise the composition of the employee representation on company boards. In many cases, the SE has indeed led to an internationalisation of the boardroom; experience with board-level employee representation has in this way been indirectly spread to countries in which such representation does not exist in the domestic corporate governance system.

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News on European Companies: Slowdown or new dynamics?

The April 2014 edition of the SE News provides the latest SE data available from the ETUI's European Company (SE) Database. As of 21 March, a total of 2,125 SEs were registered in 25 countries of the European Economic Area (EEA), an increase of 159 SEs in the past five months. The current dynamics may look contradictory: on one hand, the number of new SE registrations in the Czech Republic – the country with by far the highest number of SEs – slowed down significantly. On the other hand, there have never before been so many firms on our ‘planned SE’ list. Among others, such famous names as Airbus Group N.V. in the Netherlands and in France Christian Dior S.A., Schneider Electric SA and LVMH Moët Hennessy Louis Vuitton S.A. have announced their intention to transform into an SE.

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BLER map 2017 corrected

Board-level employee representation in Europe: map (2017)

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 six, where board level representation is limited to state-owned or privatised companies. However, the biggest group of 13 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.

 

MAP: Board-level representation in the European Economic Area

Board level representation in Europe: overview in 2017

In 19 of the 31 members states of the European Economic Area countries there exists some 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.

The situation in 2017 slightly changed from that of 2015, since board-level employee representation rules were reintroduced in the Czech Republic for the private sector in January 2017. Thus, this country is now back to the group of countries where regulations have a wider scope, covering both state-owned companies and the private sector. The updated situation is presented on the below map.

Depending on the company structure in the respective member state, the workers’ representatives may either sit on the board of directors (in a monistic system with only an administrative board) or on the supervisory board (in a dualistic system with a management board and a supervisory board). In every country a specific system has evolved and (board-level) representation is always embedded in the wider context of the national industrial relations system. Consequently, the situation differs significantly among the member states.

Previous versions of the map reflecting the state of national industrial relations in the area of board-level representation are available for 2015 and 2013:

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Board-level employee representation: state of play in 2017

Board-level employee representation: state of play in 2017

The ETUI has recently published (January 2017) an updated map of board-level regulations in the EEA countries. The original map by N. Kluge, M. Stollt and A. Conchon (2013) was updated by the ETUI expert in the field, Sara Lafuente Hernandez.

In 19 of the 31 members states of the European Economic Area countries there exists some 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.

The situation in 2017 slightly changed from that of 2015, since board-level employee representation rules were reintroduced in the Czech Republic for the private sector in January 2017. Thus, this country is now back to the group of countries where regulations have a wider scope, covering both state-owned companies and the private sector. The updated situation is presented on the below map.

Depending on the company structure in the respective member state, the workers’ representatives may either sit on the board of directors (in a monistic system with only an administrative board) or on the supervisory board (in a dualistic system with a management board and a supervisory board). In every country a specific system has evolved and (board-level) representation is always embedded in the wider context of the national industrial relations system. Consequently, the situation differs significantly among the member states.

board meeting

board meeting

Belgian political parties favour co-determination of employees in company boards

board meeting

board meeting

Mid-November 2017, the Flemish Green party of Belgium (Groen) approved a text calling for, among other things, employee representatives in company boards. The approval is mostly symbolic as the Green party has no detailed plan of how this form of co-determination should be organized. The congress text mentions the need for employee representatives to sit in company boards in order to foster the democracy and participation in organizations and as a means to support constructive relations between employers and employees on strategic company issues.

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The Grigor Gradev Scholarship: Call for Applications - 2018

31 October 2017: In memory of Grigor Gradev and to continue his work, the ETUC and the ITUC have set up a scholarship to promote the thinking behind promoting workers’ rights and dignity in a Europe in circumstances of deep transformation and dire economic conditions. Grigor Gradev invested a lot in building the capacities of European unions, particularly in those countries that transitioned from a planned to a market economy; in promoting workers’ interests in challenging reform processes; and in encouraging and helping unions from different parts of Europe to cooperate and work together. Grigor Gradev did this by engaging in the political work, but also by contributing substantially to the intellectual thinking behind that work.

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