What is Board-level Employee Representation?
Board-level employee representation is a formalised and indirect form of worker participation, via worker representatives, within a company’s governance structures which take strategic and financial decisions. With this form of representation, workers can in principle express their collective voice and interests at the highest level of decision-making in a company. Most European countries have legal provisions for worker representation on boards of directors, management boards or supervisory boards, with representatives usually having a right to vote. Worker representatives on boards are either elected by the workforce or appointed in some other way, by works councils or trade unions, and they provide input on company discussions and decision-making at transnational or national levels, depending on the scope of their board’s decisions.
How many countries apply Board-level Employee Representation?
The number of countries regulating Board-level employee representation rights in their legal framework has evolved over time. Until 2015, 19 European countries were reported to have Board-level employee representation rights regulated by law (Conchon, 2015) - 13 countries applied them to both public and private sector companies; six applied them only to some public sector or privatised companies, and 12 did not have Board-level employee representation regulations or only a very limited application. Between 2015-17, legal changes occurred in the Czech Republic, Lithuania, and Spain. Due to this and a reassessment of Board-level employee representation application, it seems accurate to now say that 13 countries have active legislation allowing for worker representation in company boards in the public and private sector (the Netherlands is a specific outlier, as workers’ rights towards the board only consist in recommending some external members that cannot be workers or trade unionists), while only three countries (Ireland, Poland and Lithuania) still have some applicable legislation for the public sector or privatised enterprises. The remaining countries have no regulation or only very limited scattered practice of participation rights, mostly reliant on isolated company collective agreements (Lafuente, 2024), so there is much scope for development.
How many Board-level Employee Representatives are active in the European Economic Area?
As there are no official registries about Board-level employee representation or companies that fall under Board-level Employee Representation regulations, it is difficult to know exactly how many companies should have Board-level employee representation, actually have it, and/or how many representatives sit on boards across Europe. However, based on an extensive Board-level Employee Representation survey conducted between 2009-12, recognising the use of different methodologies in individual countries, ETUI research estimates that there are circa 20,000 employee representatives who sit on company boards of directors or supervisory boards across the EU and Norway (Waddington and Conchon 2016).
How do trade unions support Board-level Employee Representatives?
Trade unions support employee representatives on boards in different ways. They can provide individual expertise and assessment on technical and political aspects of the role, outside board meetings, but also within them in some countries such as Germany where external trade union officers can have a formal seat in the board. Trade unions can commission expertise and publications to disseminate and contribute to knowledge of the state of play, rights, practice and challenges of the Board-level Employee Representation role at national, comparative and European level. They can also establish groups and networks among their representatives sitting in boards, organising regular meetings with them so that they can connect, exchange experiences and improve their capabilities. Specific training programmes can be tailor-made for board-level employee representatives, sometimes involving other role-holders in the company such as worker representatives with observer or advisory functions in the board, or (European) Works Councils in order to improve strategic cooperation between the roles. Finally, trade unions can lobby national and European authorities so that policy can be improved to strengthen Board-level employee representation rights and the rights of representatives within. Trade unions themselves can put forward policies and procedures to help the role of Board-level employee representation representatives become more transparent, inclusive and Europeanised in multinational companies.
What is the European Worker Participation Fund?
The European Worker Participation Fund (EWPF) is a Fund located at the ETUI, by unanimous resolution of the ETUC in 2008, to set up a European Worker Participation Competence Centre (EWPCC) within the Institute. The Fund is financially fed by the transfer of (part of) the remuneration of workers' representatives on the board of directors and supervisory boards of European Companies (SEs). The EWPCC coordinates and organises activities to support and promote the representation of employees at different levels in multinational companies.
How does the European Company (SE) relate to Board-level Employee Representation?
Worker participation rights on company boards are not yet harmonised at the EU level. However, using for the first time its competence to regulate codetermination rights, the EU legislator adopted the European Company (SE) Directive 2001/83/EC after 30 years of political struggle towards the adoption of a European Company EU framework. The main point of contention was precisely how workers should be involved in the corporate governance structures of the future European Company. The Directive complements the SE Regulation on workers involvement, with the aim of safeguarding pre-existing national codetermination rights and also, when these were kept, to favour their Europeanisation. The SE Directive thus introduced an EU reference in terms of what the SE Directive calls ‘participation’, referring to the right for workers to elect, appoint, recommend, and/or oppose some or all of the members of the company’s supervisory or administrative organs. The Directive’s compromise solution is based on: 1) a ‘before-after’ principle, which makes any Board-level Employee Representation rights in the SE dependent on their previous application to the company before SE transformation or establishment; 2) compulsory negotiations at company level, between a Special Negotiating Body representing employees and the management, on the workers’ involvement rights in the future SE, which concerns information and consultation rights, but also board-level participation rights in the SE, if these are to exist; and 3) fall-back provisions applicable in the absence of an SE agreement or setting minimum standards when SEs are established by transformation. These principles were taken as the basis for other EU corporate law instruments, including the European Cooperative Society (SCE) Directive 2003/72/EC and the Cross-Border Merger (CBM) Directive 2005/29/EC.