Codetermination
Legal rights of employees to take part in company decisions, especially by electing representatives to the board and through works councils; best known from Germany (Mitbestimmung).
In more detail
In Germany, companies with more than 2,000 employees have supervisory boards split equally between shareholder and employee representatives under the 1976 Codetermination Act, with the chair holding a casting vote in a repeated tie; firms with 500 to 2,000 employees have one-third employee seats. Works councils have rights to information, consultation and co-decision on matters such as working time. Many other European countries have board-level representation. Evidence from a 1994 German reform suggests that one-third board representation had no detectable effect on wages and, if anything, increased investment. Critics argue it slows decisions and protects insiders.