Lessons from Europe: Employee representatives at board level
Rachel Sharp, July 10, 2018
The UK, together with nine other European Union (EU) countries, has no legislation requiring companies to have board level employee reps
In the other 18 EU countries, plus Norway, there are varying rules and regulations about levels of representation. Here’s how it works in some of those countries:
Sweden – In companies with 25 employees or more around one-third of the single-tier board of directors must be employee representatives.
Czech Republic – For state-owned firms employees must account for a third of the supervisory board. In 2014 the country removed the obligation for employee board-level representation within private sector firms.
France – Private companies with 1,000-plus employees in France or 5,000-plus worldwide must have at least one or two employee board members.
Germany – With a two-tier board system in Germany, made up of the supervisory board and management board, employee representatives are required to account for one-third of the supervisory board in companies with 500-plus employees, or half in companies with 2,000-plus employees.
In practice: Nils-Peter Daetz, VP HR regions, Nokia
“Nokia has a legal entity in Germany, so that entity must have a board with an even split of employer and employee representatives on it as that follows the local legal requirements. This means we have a board with six members on the employer side and six members on the employee side, and the chair.
The six employee representatives are all elected by fellow employees and are made up of two union members (so not Nokia employees), three Nokia employees, and one manager representative who speaks on behalf of and is elected by management-level staff, as they’re not really represented by the wider employee reps.
On the board the employee reps get a top-down view of how the company is doing. So for example if they see the company results are good but that employees feel they aren’t getting anything, this is raised. They represent the company interests through the lens of the employee. A board usually represents shareholders and so the worker reps push us to look at the capital of employees, not just the capital of money – this is the balance of discussions on the board.
The board meetings are driven by the chair and, if done well, they will have discussed the topics on the agenda – which are very high-level and strategic – with both the employee side and employer side in separate meetings beforehand.
As well as the employee representatives on the board, every Nokia site across Germany also has a works council that is elected every five years and is responsible for representing and fighting for the benefit of employees at that site on a local level. The three employee board members are usually also works council members so they have a double role.
For me it’s a tough job dealing with the works councils as I get ugly questions and need to answer them well. But the benefit is that we hear complaints employees are raising.”