Trade unions are getting involved in the corporate governance discussion. Is this the start of real dialogue?

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Dear readers of the GermanBoardNews,

following the Wirecard scandal, everyone is (finally!) discussing corporate governance, and employee representatives have now also joined in: This week, the Mining, Chemical and Energy Industrial Union (IG BCE) called for a “readjustment of the conflict resolution in the supervisory boards”.

Behind this is the idea of making controversial strategic decisions “in a mediation process with a neutral arbitrator” – and no longer through the double voting rights of the chairman of the supervisory board. This is to apply, for example, to relocations abroad, mergers, plant closures or “mass redundancies”.

First: I expressly welcome the fact that the trade unions are getting involved in the #FutureGoodGovernance discussion. Because co-determination is one of the pillars of our governance system and the social market economy. Moreover, I am convinced that, after Wirecard, we need more urgently than ever an (open) dialog between all parties involved.

How realistic are quick settlements?

I therefore warn against reflex-like rejection, but allow me to ask the question: How great is the danger that mediation will prolong decisions of existential importance? Delays can have fatal consequences – especially in times of rapid technological and social change, when quick action is more important than ever.

When supervisory boards demand “agility” from management boards, I believe that they cannot and must not be allowed to cause delays even afterwards. In a dialogue at eye level, we would therefore have to discuss whether rapid arbitration is realistic, how to prevent blockades that threaten the company’s existence and how to preserve entrepreneurial freedom (see also our commentary on the Metro case).

In addition, trade unions should also be prepared to discuss proposals that they reflexively avoid. This includes promoting the business management competence of employee representatives as well as developing co-determination models into co-ownership models. The Association of Supervisory Boards in Germany is willing to engage in such a dialogue.

 

Cordially

Yours Peter H. Dehnen (Editor)