Having employee representatives at the highest level in a company – on the board or, in some countries, on the supervisory board – gives employees a chance to have some influence on strategic decision-making. There is board-level employee representation in both the private and public sectors in 14 of the 30 states examined and another four, where this only exists in parts of the public sector. The national thresholds, above which board-level employee representation is required, range from 25 to 1,000, and the number of board-level seats held by employee representatives ranges from just one to half the total. There are also differences in how employee representatives are chosen, and in one country, the Netherlands, the board members chosen are far removed from the interests of the employees.
A majority of the 30 states of the EU provide for some form of employee representation at board level, although in some this is limited to companies owned in whole or part by the state (see Figure 1 below). There are 14 states, Austria, Croatia, the Czech Republic, Denmark, Finland, France, Germany, Hungary, Luxembourg, the Netherlands, Norway, Slovakia, Slovenia and Sweden, where legislation provides that companies in both the private and public sectors must have representation at board level chosen by employees. In a further five countries, Greece, Ireland, Lithuania, Poland (where partially privatised companies are also covered) and Portugal, board-level representation is limited to publicly owned companies. In all of them, privatisation and other developments, such as changes in then legal status of the entities concerned, mean that the number of companies involved is now small. This leaves 11 states countries without legislation or other agreed arrangements providing for obligatory board level representation employees. These are Belgium, Bulgaria, Cyprus, Estonia, Italy, Latvia, Malta, Romania. Spain, Switzerland and the UK. This does not mean that there are no employee representatives at board level in these countries. However, these are individual rather than generalised arrangements.
The employment threshold at which board-level employee representation is required ranges from 25 in Sweden and 35 in Denmark to 1,000 in Luxembourg and France, which has a 5,000 threshold for employees worldwide, where there are not 1,000 domestically. The proportion of board members who are employee representatives varies between a single member (in Croatia and in France – in boards with eight or fewer members) and half the total (in Germany in companies with 2,000 or more employees). However, the most common arrangement is that they make up a third of the board.
There are also important differences between countries in terms of who can be an employee representative on the board. In most countries, they are employees, often with another important representative role in the company, but this is not the case in France, where they cannot have any other elected position, and not the case in the Netherlands, where they neither can be employees of the company nor employees of a union involved in collective bargaining with it. These rules make board-level employee representation in the Netherlands very different from most other countries as the representatives, while nominated by the works council, have no direct connection with the employees or the unions that represent them.
Other aspects of board-level employee representation, such as the way they are nominated and elected, their period of office and the impact of efforts to increase women’s representation on boards, are covered in the national reports and in the board-level employee representation section of this website.
Figure 1: Board-level employee representation in the 27 EU Member States, Norway, Switzerland and the United Kingdom