Abstract
How to involve employees in the running of companies is one of the most frequently discussed issues of corporate governance. In some countries, co-determination - employee representation on statutory, and more importantly supervisory boards, is mandatory.
Employee representatives are directly and solely elected by their colleagues with no involvement of shareholders at general meetings. Their voices are often strengthened through further legislation.
Companies may thus be required to record all dissenting opinions of employee representatives and communicate them at general meetings. However well-intentioned, it is debateable whether such involvement really strengthen the voice and involvement of employees? On joining the board, an employee representative may find themselves receiving a renumeration far in excess of their regular salary.
There is a perverse - but human - incentive in some cases that they want to hold onto this new role as long as possible. To do so they ensure that their views and votes do not deviate from those of the majority.
The value of such 'constructive' approach is then frequently emphasised by management, cementing the chances of the representative's re-election. However, the described rules initially designed to protect dissenting opinion conflict with this reality.
Mandatory recording of all dissenting opinions and further communicating of them can have a dampening effect. Rather than feeling safe to express strong opinions, there is the potential to tone-down comment, resulting in a passive, non-committal approach.
As well as suppressing personal opinions, it ultimately reduces the motivation to defend employee interests. Therefore, it seems more appropriate to record dissenting opinions only if the representative deems it appropriate.
For example, to be able to demonstrate in the future that they acted in the best interest of company, regardless of how this is perceived by different jurisdictions.