At face value, the hierarchy within any company is clear: directors make the decisions and their employees have to implement them. In Germany, however, it is not so straightforward. In many companies, employees have a right in law to decide on important topics. From the perspective of a foreign investor, this system, known as “co-determination,” may seem a little strange, but it has been working well for decades, to the extent that even employers praise it.
“Employee participation has proved successful in difficult situations,” says Ingo Kramer, president of the employers’ association BDA, adding, “sometimes it also acts as a brake pad.” From checking the excesses of big business when decisions are made purely in the interests of shareholders and directors, to steering the company in the right direction from an employee perspective, co-determination promotes sustainable business.