A New Standard for Governance: Reflections on Worker Representation in the United States

By Constain, Julian | Fordham Journal of Corporate & Financial Law, April 1, 2019 | Go to article overview

A New Standard for Governance: Reflections on Worker Representation in the United States


Constain, Julian, Fordham Journal of Corporate & Financial Law


INTRODUCTION

Over a century ago, Otto von Gierke warned that the working class was "threatened to be deprived of their economic personality by the development of the capitalist large enterprise."1 While von Gierke uttered those words in a different context, the message could not be more befitting to the contemporary state of the U.S. economy.

U.S. corporate law has developed in a manner that continually expands the rights afforded to corporate entities which, in turn, incentivizes corporate ownership.2 As a result, modern corporations exert an unprecedented level of influence on the global economy.3 Their products are cemented into the U.S. psyche and have become integral features of the most intimate facets of the culture and, thus, the economy.4 Corporate actions impact both stakeholders and society at large. For example, the opening of a new factory has a positive impact on a variety of groups-shareholders benefit from an increase in share value, the assets of new hires and their nuclear families multiply, and the local economy experiences a rise in activity.

Control over corporate decision-making, however, is reserved for shareholders and appointed directors.5 Accordingly, the fate of the many stakeholders affected by corporate actions rests in the hands of a select few who often have different interests.6 This discrepancy has not escaped the attention of contemporary legislators, as several have integrated corporate governance reform into their policymaking agenda.7 One such example is Senator Elizabeth Warren's Accountable Capitalism Act.8 In an effort to address corporate accountability, Senator Warren proposed a system of governance in which worker representation- codetermination-would be mandatory and the fiduciary duties of corporate directors would be expanded to include stakeholders other than shareholders.9

Through a comparative analysis of legal developments in Europe and the United States, this Note reflects on the legal and economic theories advanced by codetermination and, thus, evaluates its practical viability in the United States. Part I details the historical development of codetermination, which has occurred almost exclusively in Europe. Part II presents relevant arguments for the adoption of codetermination given its practicality, efficiency, and legality. Part III reflects on the goals that worker representation advances and, accordingly, suggests a course of action for its adoption in the United States.

I. ORIGINS

Codetermination was first conceived and adopted in Europe, and continues to exist primarily there.10 Germany was one of the first countries to consider implementing co-determination, having debated the topic at the country's first democratic assembly-the Frankfurt Parliament of 1848 and 1849. 11 Asa result, the vast majority of codetermination research has been conducted in the context of Germany's experience with the system.12 The most notable progress made outside of Germany has been in Scandinavia, where Norway, Sweden, and Denmark have each adopted a system of worker representation unique to their socioeconomic conditions.13

A.GERMAN ORIGINS

German codetermination operates in two distinct ways. First, it exists at the shop level through workers' councils; second, it exists at the corporate level through the representation of workers on supervisory boards.14 The workers' councils address standard collective bargaining matters, while supervisory boards oversee companies' policy-based strategic decision-making.15

Some form of worker representation has existed in Germany for well over one hundred years.16 As early as July 1891, the German legislature enacted laws allowing for the creation of workers' councils on a voluntary basis. 17 While the 1891 enactments only dealt with shop-level representation, representation soon rose into the upper levels of management. Germany first moved toward the current conception of codetermination in 1922, when the government passed legislation requiring that worker representatives be appointed to the supervisory boards of joint-stock companies. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

A New Standard for Governance: Reflections on Worker Representation in the United States
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.