Worker director

A worker director or employee-elected director is a member of a company's board of directors that is elected by the workforce of an organisation. Employees have a right by law to appoint directors to companies in most European Union member states. In the United States, trade unions have negotiated collective agreements, typically linked to employee stock ownership plans, to appoint board members.

History

S Webb and B Webb, Industrial Democracy and The History of Trade Unionism (1920)
Betriebsrätegesetz 1920, German law introducing the first widespread private sector requirement for worker directors, as of right. One third on supervisory boards.
Draft Fifth Company Law Directive
Codetermination Act 1976 in Germany, enabling one half of directors on a supervisory board, minus the chair person, to be elected by the workforce.

Arbeitsverordnung 1890, the first law enabling worker councils, but only on a voluntary basis, in Germany
Hilfsdienstgesetz 1916, war time requirement for worker councils in some industries
Montan-mitbestimmungsgesetz 1951
Mitbestimmungsergänzungsgesetz 1956
Betriebsverfassungsgesetz 1972, standardised law for one third employees on company boards with over 500 staff
Codetermination Act 1976 in Germany
Drittelbeteiligungsgesetz 2004, codified again, one third worker directors in companies with over 500 staff.

Henry Briggs & Son Co, incorporated 1865, had an employee share plan and a worker director
South Metropolitan Gas Act 1896,^[1] until abolition by the Gas Act 1948, enabling worker directors, combined with a share ownership plan.
Iron and Steel Act 1967 Sch 4, Part V, created a negotiation process with trade unions in British Steel Corporation to introduce workers, put into effect from 1968
Post Office Act 1977 s 1(2) created worker directors for the Post Office by amending the Post Office Act 1969
Bullock Report (1977) proposed worker representation, one half on a supervisory board.
Transport Act 1985, privatised the bus networks. Employee share ownership plans were created by Labour councils as this happened, as a way to protect workers, though shares were quickly bought up by ordinary business owners.
Transport Act 1968 allowed the secretary of state to appoint members of the British Railway Board. In 1997, John Prescott appointed a worker director overseeing some aspects of the now privatised industry.

TH Hammer, SC Currall and RN Stern, ‘Worker Representation on Boards of Directors: A Study of Competing Roles’ (1991) 44(4) Industrial and Labor Relations Review 661-680
LW Hunter, ‘Can Strategic Participation be Institutionalized? Union Representation on American Corporate Boards’ (1998) 51(4) Industrial and Labor Relations Review 557-578
RB McKersie, ‘Union-Nominated Directors: A New Voice in Corporate Governance’ (1 April 1999) MIT Working Paper
RB McKersie, ‘Labor's voice at the strategic level of the firm’ (2001) 7 Transfer: European Review of Labour and Research 480