European Company Law and Corporate Governance
In recent years the issue of corporate governance has become a highly politicized policy area with great relevance for employees and society as a whole. At stake is the issue of who runs our companies and what strategies and goals these companies pursue. Since the 1990s corporate governance reform in Europe has been dominated by the ‘shareholder value’ model of the firm, which prioritizes the interests of shareholders. However, in the wake of the financial crisis, increasing dissatisfaction with this model is leading to the search for an alternative which gives stakeholders a stronger ‘voice’ in company affairs and focuses on long-term sustainability.
This section provides an overview of the European company law directives which have been passed to date. It also provides a more detailed discussion of those directives with provisions for worker information, consultation and participation, as well as current proposals for directives which would have particular significance for worker involvement. It also contains information on other issues in European company law, such as the European Cooperative Society or the European Private Company (SPE). Both have significant implications for employees’ rights.
The concept of corporate governance is defined in different ways. The narrow definition focuses on the control of management by shareholders. The broader definition looks at the role of stakeholders in making and implementing strategic decisions in the company. Corporate governance must be understood as a system in which there is an interplay of different regulations and market forces. Therefore corporate governance deals with multiple issues in the field of corporate law, securities regulation, corporate finance and industrial relations. In 17 of the 27 EU member states and in Norway employees are represented in the companies' supervisory or administrative board.
In recent years the European Court of Justice has, in a series of decisions, established some principles of law in the context of freedom of establishment (Art. 43, 48 EC Treaty) and the transfer of a company’s de facto head office to other member states that have had a profound impact on national regulation of legal conflicts (incorporation theory and seat theory). The leading cases in this context are the following: Daily Mail, Centros, Überseering, Inspire Art and Cartesio. The main outcome of these decisions is the possibility for companies to transfer their de facto head office to the member state of their choice.
GoodCorp is a network of researchers and trade unionists concerned with corporate governance issues. It was established in 2005 by the ETUI and has a threefold mission.
New book: 'Takeovers with or without worker voice: workers’ rights under the EU Takeover Bids Directive'
In its Workers’ rights in company law series the ETUI has just published (October 2016) a new book on takeovers and workers' rights, edited by Jan Cremers (University of Amsterdam) and Sigurt Vitols (ETUI).
This book presents the results of a study of workers’ rights during company takeover situations in Europe. Takeovers are extremely important for workers because a change in ownership frequently leads to restructuring in the firm, including replacement of management, changed working conditions, increased work intensity and/or mass redundancies. It is therefore crucial that workers have strong rights to receive timely and full information about the planned takeover and to intervene at an early stage of the takeover process to protect their interests. The major conclusion of the book is that the EU Takeover Bids Directive needs to be revised, as it does not provide an adequate level of workers’ rights in its current form.
The study was carried out by the ETUI’s GOODCORP network of academic and trade union experts on corporate governance and company law. The book includes case studies of takeovers as well as analyses of national legal frameworks regulating takeovers and of transversal issues related to takeovers. The book is the first in a new ETUI book series on workers’ rights in company law.
The full version of the book is available for free download.
Individual chapters can be downloaded freely from the ETUI website.
ISBN 978-2-87452-421-9 (pdf)
On 24 January 2017, the European Court of Justice heard what could turn out to be a landmark case (C-566/15 Erzberger) conce
rning workers’ board-level participation.
Mr Erzberger, a minority shareholder of TUI AG – a multinational travel and tourism company headquartered in Hannover, Germany -- had brought a case before a Berlin court challenging the composition of the company’s Supervisory Board. According to German rules, the employees working for the group but outside German territory are not counted and therefore excluded from the election of board-level employee representatives since they have neither active nor passive election rights. The applicant argues that such geographical rules restrict the right to free movement of workers and also constitute discrimination on the basis of nationality, both of which would be contrary to EU law.more ...
Associate Researcher ETUI and Researcher at the Social Science Research Center Berlin (WZB).
Sara Lafuente Hernandez
Research Officer ETUI
Tel. 0032 (0)2 2240590