Board-level employee representation in Europe : challenging commonplace prejudices

Abstract

However, the mainstream literature on corporate governance – represented by the shareholder-value oriented approach – says little on the subject of board-level employee representation (henceforth BLER). Focused on the regulation of the relationship between agents (managers) and principals (shareholders), supporters of agency theory neglect the possibility for employees to be represented on the board of directors or supervisory board (Jensen and Meckling 1976; Fama 1980; Fama and Jensen 1983a, 1983b, 1985). In doing so, they ignore (or, at least under-appreciate) existing provisions for and practices of BLER. For instance, the European Commission’s 2010 Green Paper on corporate governance in financial institutions does not touch on BLER a single time (European Commission 2010). Only a careful reading of the 2005 Commission recommendation on non-executive or supervisory directors (2005/162/EC) helps discover a brief mention of such a ‘system of workers’ representation’ in the annex. A final illustration is that, whereas BLER is widespread in Denmark, Norway and Sweden, BLER rights are only mentioned in a brief footnote in the 2009 code of corporate governance in the Nordic countries (2009:8). Such observations fuel the idea that BLER is a marginal phenomenon in Europe. This idea is so widespread that it can even lead some proponents of the stakeholder-

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 6 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.