Employee roles in governance: contrasting the UK and German experience

Abstract

The paper examines the role of employees in governance. The paper highlights from a theory basis that employee and shareholder utilities can be coincident. However, it shows that corporate practice with respect to employee involvement in governance and decision‐making is diverse. The paper draws out the contrast in approaches between the Anglo‐American and the German approach to employees by detailing differences in employee power, career patterns, ownership patterns and legal obligations. These lead to enactment of a different structural and cultural governance systems; which are encapsulated in the unitary board structure of the UK and the two‐tier German approach. The strengths and limitations of the unitary board and two‐tier boards are highlighted, and the case for convergence examined.

Citation

Lewis, T.J., Machold, S., Oxtoby, D. and Ahmed, P.K. (2004), "Employee roles in governance: contrasting the UK and German experience", Corporate Governance, Vol. 4 No. 4, pp. 16-28. https://doi.org/10.1108/1472700410558853