Transnational representation at company boards

Inger Marie Hagen, Fafo Institute for Labour and Social Research, Oslo

Board level employee representation is well established in a number of European countries. In some countries, the arrangement is anchored in company law, while in others the provisions are found in either labour law or in collective agreements. The different arrangements have however one important feature in common: the arrangements are part of national law and thus – the right to representation is given to employees working in the country in question only. Employees in foreign-based subsidiaries have no right to representation at group board level (‘konsern’) even if national legislation might provide for representation in the subsidiary in the country at hand. However, three countries make up the exception to this rule:  France, Denmark and Norway. In addition, in Germany and Sweden, the legal situation might be interpret as permitting transnational representation if the trade unions comply and in both countries, examples of transnational representation exist.

This paper looks at this transnational arrangement with a Nordic perspective. So far 29 groups have been identified, 24 in Norway, 2 in Denmark and 3 in Sweden. Three key questions are addressed.

First, why transnational representation established? There is no mandatory provision on representation in neither country and thus, the workers need to organize a demand for representation. The next step is to transform the arrangement into a transnational arrangement. Did the employees, the management, the shareholder elected board members or the trade union take the initiative?

Secondly, how was the representatives elected? All three countries are characterize by a ‘single channel system’, e.g. at company level the trade union representatives (from the local branch of the national trade unions) represent the employees in relation to the management. Never the less, BLER election methods varies. E.g., when to elect a Swedish representative from the Swedish subsidiary to the board of a Norwegian group – does Swedish (appointed by the trade union) or Norwegian rules (elected by all employees in company) apply?

Thirdly, how do the representatives evaluate the arrangement and especially the role of their foreign colleagues? If – and how - do the representatives cooperate and what is the role of the trade union (if present in company)?

The data is mainly qualitative (interviews with BLERs in different groups) supplemented by two quantitative survey, one by the European Trade Union Institute (ETUI) and one by Fafo.  The paper argues that in order to understand the role of BLERs at different level, the analysis need to include both an industrial relation framework as well as insight from corporate governance. The paper is based on a project is funded by ETUI.

Key words: co-determination, board level employee representation, transnational representation, trade unions, qualitative analysis