Codetermination At The Managerial Level : Germany

The Works Constitution Act also enables employees to influence company policy through their members on the supervisory board. Employee participation in company affairs is one of the mainstays of the social order of the Federal Republic. It is based on the conviction that democratic legitimation cannot be confined to government but must apply in all sectors of society. The Works Constitution Act applies to medium-sized or large companies which have the legal form of stock corporations, limited liability companies, partnerships limited by shares, profit-oriented and trading cooperatives, or mutual insurance companies.

Codetermination in the supervisory board extends to all company activities. Thus the supervisory board, for instance, appoints the members of the management board. It may also revoke their appointment, demand information on all company matters, and have the last word on important business decisions, e.g. with regard to major investments or rationalization measures.