What is corporate governance?
Corporate governance concerns the system of rules, processes, and practices through which an organisation is directed, led, and managed towards attaining its objectives. It involves balancing the interests of workers, shareholders, management, customers, suppliers, government, and the community. Corporate governance spans internal control of the development of strategies, action plans and work policies and programmes, as well as externally oriented corporate disclosure.
What does company law do?
Company law addresses corporate governance, which concerns the relationships between a company’s management, board, shareholders, and other stakeholders (including workers), and therefore, on the ways the company is managed and controlled. Company law also addresses issues such as the formation, capital and disclosure requirements, and operations (mergers, divisions) of companies. Related legal areas include insolvency law and corporate reporting standards.
Why is company law important for workers?
Company law regulates the rights of workers in corporate governance, most clearly in the rules for representing workers in the board (Board-level Employee Representation). Company law also defines ad hoc rights for workers, for example information and consultation rights in the case of takeover bids and cross-border conversions, mergers, and divisions. Finally, workers are affected by the rights that company law grants to other parties, such as voting rights for shareholders.
What does ETUI do on company law, corporate governance, and worker participation?
The ETUI work in this area relies on the GoodCorp pan-European network of trade union and academic experts, which was initiated in 2005 following the European Commission’s publication of an action plan for company law and corporate governance. In addition to providing policy advice to the European trade unions, GoodCorp has coordinated a number of publications and the development of the European Participation Index, a national-level measure of the strength of worker participation in corporate affairs. Within GoodCorp, a new network of national correspondents called Monaco was established in 2022, which focuses on monitoring the transposition of company law and related directives which involve worker participation. Finally, an overview of EU company law relevant for worker participation is provided on this worker-participation.eu website.
GoodCorp, a pan-European network of trade union and academic experts, was initiated in 2005 following the European Commission’s publication of an action plan for company law and corporate governance. The activities of the GoodCorp network include:
- the exchange of information and opinions on current issues on the European corporate governance and company law agenda, as well as on key developments in EU Member States
- advice and support for the European trade union movement on these issues
- research and publications on policy options
ETUI Monitoring and Assessing Company Law Transposition (Monaco) Network
Within the framework of the GoodCorp Project, the Monaco network was established in 2022 to monitor and analyse the transposition of key EU Company Law and related Directives with relevance for worker participation. The network is composed of correspondents from the different Member States with a background in the analysis of legislation. The Monaco Network is coordinated by Progressive Policies on behalf of the ETUI.
Every month, these correspondents report on the state of transposition of the Directives in their respective countries. Where relevant, they also provide a qualitative assessment of national implementation, in particular on provisions that are important for workers’ rights. In addition to a regular monitoring reports, an overview report on the transposition will be compiled.
The network currently monitors the transposition of four Directives:
- Digital Tools and Processes Directive 2019/1151
- Cross-Border Conversions, Mergers and Divisions Directive 2019/2121
- Insolvency and Restructuring Directive 2019/1023
- Corporate Sustainability Reporting Directive 2022/2464
The 'state of play' of transposition can be accessed in the latest Monaco Network overview report.
For summaries of the Directives that Monaco monitors, as well as other relevant EU legislation, please see legislation and regulation.
The worker-participation.eu website houses short commentaries and links to key court cases concerning corporate governance and company law:
- European Court of Justice (ECJ) jurisprudence on the transfer of de facto company head offices
- Other (under construction)
European Participation Index
The European Participation Index (EPI) is a multidimensional measure of the strength of ‘workers’ voice’ in companies in different European countries. The inclusion of three components respects the variety of industrial relations systems in different countries, which provide information, consultation and participation rights at different levels of the company:
- The first component measures the strength of worker representation on company boards. Board level employee representation (BLER) is generally either widespread in both the public and private sectors, limited mainly to public and privatized companies, or only weakly supported or based on voluntary arrangements;
- The second component measures the percentage of the workforce with formal collective representation at the establishment (i.e. workplace) level; and
- The third component measures collective bargaining influence, which is an average of the percentage of the workforce covered by a collective agreement and the percentage of the workforce that are trade union members.
Countries receive a score between 0 (no worker voice) and 1 (strong worker voice) on the EPI. The EPI has been shown to have a high correlation with various economic and social indicators, including economic equality, the labour share in income, the employment rate, research and development spending (R&D), in-work poverty, and political participation.
Research using the EPI (including earlier versions) can be found in various editions of the annual ETUI Benchmarking Working Europe publication (2009: 55; 2011: 97-98; 2016: 69; 2016: 69; 2017: 58; 2018: 76; 2019: 73-75; 2020: 140-142, 155).
A dataset covering the EU28 (i.e. pre-Brexit) countries between 2009 and 2019 can be downloaded here: (under construction).