Why German Corporate Boards Include Workers
A brief history of “co-determination,” which Elizabeth Warren now wants to bring to U.S. corporations.
Volkswagen’s supervisory board includes representatives of “works councils.”
Photographer: Matthias Doering/Bloomberg
U.S. Senator Elizabeth Warren unveiled legislation last week that would, among other things, require large American corporations to let employees elect 40 percent of their boards of directors. This evoked some fun reactions. At Vox, Matthew Yglesias wrote that Warren’s proposals could “save capitalism.” At the National Review, Kevin Williamson described them as “the largest seizure of private property in human history.”
Wherever on that spectrum your views lie, it does seem important to acknowledge that one of the world’s most successful capitalist nations, Germany, currently requires 50 percent employee representation on the supervisory boards of large corporations, and that most countries in the European Union now also encourage or require some such form of employee “co-determination.”