Labour co-determination and corporate governance in Germany: The economic impact of marginal and symbolic rights
For decades, some governments have fiercely opposed any statute of the Societas Europaea that foresaw German-type co-determined supervisory boards. Considering firms as pools of specific investors, we ask about the conditions that are necessary to secure the interests of specific human capitalists in an efficient way, if the real capital owners' right to residual control does not solve the ex-post bargaining problems over the sharing of quasi-rents. We disregard contract-theoretic approaches as solutions to the ex-post bargaining conflicts and suggest a constitutional approach to this major problem in the theory of the firm. From a constitutional perspective, the (non-executive) board members of the German Aufsichtsrat (Supervisory Board) - unlike the Betriebsrat (Works Council) - essentially dispose only of marginal, extremely symbolic, i.e., non-enforceable rights to represent worker investors. Legally, however, these rights are to be used first in the interests of the corporation and only secondarily in the interests of partial investors. Marginal and symbolic rights as well as fiduciary duties will make a difference in distributive bargaining, if they are legally imposed. Who is to be heard and to be involved in decision-making and what is counted as a legitimate argument or action - these are basically questions of political culture that in principle leave room for efficient international diversity. Option rights in the European directive on the Societas Europaea should thus be considered as an apt and wise decision.
|Date of creation:||1999|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.iaaeg.de/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Larry W. Hunter, 1998. "Can strategic participation be institutionalized? Union representation on American corporate boards," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 51(4), pages 557-578, July.
- Armen A. Alchian & Harold Demsetz, 1971.
"Production, Information Costs and Economic Organizations,"
UCLA Economics Working Papers
10A, UCLA Department of Economics.
- Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December.
- repec:att:wimass:9714 is not listed on IDEAS
- Jensen, Michael C & Meckling, William H, 1979. "Rights and Production Functions: An Application to Labor-managed Firms and Codetermination," The Journal of Business, University of Chicago Press, vol. 52(4), pages 469-506, October.
- Larry W. Hunter, 1998. "Can Strategic Participation Be Institutionalized? Union Representation on American Corporate Boards," ILR Review, Cornell University, ILR School, vol. 51(4), pages 557-578, July.
- Andrei Shleifer & Robert W. Vishny, 1996.
"A Survey of Corporate Governance,"
NBER Working Papers
5554, National Bureau of Economic Research, Inc.
- Andrei Shleifer & Robert W. Vishny, 1995. "A Survey of Corporate Governance," Harvard Institute of Economic Research Working Papers 1741, Harvard - Institute of Economic Research.
- Reinhard H. Schmidt & Gerald Spindler, 2002.
"Path Dependence, Corporate Governance and Complementarity,"
Working Paper Series: Finance and Accounting
27, Department of Finance, Goethe University Frankfurt am Main.
- Schmidt, Reinhard H & Spindler, Gerald, 2002. "Path Dependence, Corporate Governance and Complementarity," International Finance, Wiley Blackwell, vol. 5(3), pages 311-33, Winter.
- Donald B. Hausch & Yeon-Koo Che, 1999.
"Cooperative Investments and the Value of Contracting,"
American Economic Review,
American Economic Association, vol. 89(1), pages 125-147, March.
- Williamson, Oliver E, 1991. "Economic Institutions: Spontaneous and Intentional Governance," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 159-87, Special I.
- Prescott, Edward C & Boyd, John H, 1987. "Dynamic Coalitions: Engines of Growth," American Economic Review, American Economic Association, vol. 77(2), pages 63-67, May.
When requesting a correction, please mention this item's handle: RePEc:zbw:iaaegq:60. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.