Make it impossible for a CEO to ignore the workers: put them on the corporate board

Current law requires all publicly traded companies to have a board of directors, which hold major responsibilities and powers over the company—including decisions over how it treats its workers.

put-workers-on-corporate-boardSo when corporate boards are dominated or entirely filled by management, it’s no surprise that the rank-and-file workers routinely get the shaft. Those board directors answer to the company’s shareholders, not to the regular folks who keep the business running.

One way to change that dynamic is to simply require all major corporations to open up their boardroom to their own employees and mandate worker representation on their board of directors.

Such a system of “co-determination” is already the practice in more than a dozen countries in Europe, particularly in Germany. And it’s working out quite well:

“These efforts to include employees in company governance are intended to embody norms of workplace democracy and economic fairness. German CEOs, for example, make less than their American counterparts; countries with co-determination have lower income inequality than countries with weak employee involvement. But they are also seen as an important component of economic success, and indeed Germany is now the economic powerhouse of Europe. The CEO of the German company Siemens argues that co-determination is a “comparative advantage” for Germany; the senior managing director of the U.S. investment firm Blackstone Group has said he believed board-level employee representation was one of the factors that allowed Germany to avoid the worst of the financial crisis.”

At a time when janitors and waitresses have less and less clout to band together against CEOs, making sure these ordinary Americans have a place in boardrooms could go a long way to empowering them in the workplace overall.

For more information, see “The Stakeholder Strategy,” Democracy (2012); “Should Workers Be Represented on Corporate Boards?” Slate (2012); and “Workers on boards: interviews with German employee directors,” High Pay Centre.