Employees on the Board: Theresa May’s Next Big Idea?

Reviewing corporate governance appears high on the new Government’s agenda. Along with executive remuneration and a greater role for shareholders in the nomination and appointment of directors, there are signs of a greater role for employees too. Introducing a requirement to have employees on company boards would represent a major structural change in the UK corporate governance regime, moving it closer to the German model where collaborative decision-making has been the norm for several decades. Mrs May has not yet brought forward any detailed plans to assist firms in understanding precisely what she intends to introduce. This note summarises the position in Germany, so that clients can begin to consider how employee participation might affect their businesses.