Introduction

In early 2026, the Predistribution Initiative (PDI) commenced a project on Broadening Corporate Governance Participation (BCGP), viewing it as a critical element for restoring trust in private and public sector institutions. Worker participation provides a voice for stakeholders materially affected by business and enables companies to identify emerging risks and opportunities. Empirical evidence indicates that such participation is consistent with gains in productivity, wages, and job stability. While shareholder effects are mixed, studies do not establish a general trade-off between worker participation and shareholder value.

How worker participation varies

Worker participation is more widespread and institutionally diverse than often assumed. It is not confined to the German co-determination model but exists through various forms, including mandatory systems, exercisable rights, passive provision, and voluntary arrangements. Participation is concentrated in economically significant firms; OECD data shows that companies representing 11% of global market capitalisation have employee directors, compared to 4.8% by the number of companies. While most established in Europe, recent growth is driven by China, where 2024 law changes require representation in firms with at least 300 employees.

The form of participation

Employee representatives typically serve as full board members with the same formal voting rights and duties as other directors. Participation generally follows two models: unitary boards, which combine executive and non-executive directors in one governing body, and two-tier structures, where a separate management board is overseen by a supervisory board. In Norway, larger companies may also use a corporate assembly to oversee major corporate decisions and elect board members. Works councils exist separately for consultation but are not themselves corporate boards.

How participation is enacted

Mandatory models are usually tied to company size. Germany requires one-third representation for firms with over 500 employees, rising to parity for those with over 2,000. France mandates employee directors for large firms regardless of board structure. Exercisable rights models, such as those in Denmark and Sweden, allow the workforce or unions to actively trigger participation. Conversely, passive provision in Italy and voluntary models in the UK have resulted in significantly lower uptake, as adoption is left to board discretion.

Selection and appointment

Procedures for choosing worker directors vary from direct election by the workforce to nomination by trade unions or other bodies. In the Netherlands, works councils have the right to nominate one-third of the supervisory board, although these nominees sit as independent directors. Under the UK’s voluntarist model, some companies shortlist candidates from the workforce for selection. Mandatory models rarely require shareholder approval votes for worker directors, unlike some voluntary arrangements.

Sectoral effects

State-owned enterprises often exhibit higher levels of worker participation, particularly in Latin America’s energy sector, including firms like Brazil’s Petrobras and Colombia’s EcoPetrol. Participation is most common in large industrial, infrastructure, energy, and financial firms. However, the technology sector remains a striking exception, showing the lowest proportion of companies with worker participation despite its economic significance and the presence of concentrated founder control through dual-class share structures.

The technology sector

Major technology firms, largely listed in the US, lack a tradition of worker participation. These companies often use structures that entrench founder control and weaken the influence of both minority shareholders and workers. SpaceX is cited as an example where Elon Musk holds a minority of shares but a large majority of voting rights. Consequently, this sector remains one where both labour voice and independent shareholder influence are comparatively weak.

Choices for companies, workers, investors and policymakers

There is no single model for worker participation; it is expressed through different board structures and levels of representation. The Nordic examples offer an exercisable right that workers can enact if desired, serving as a mirror image of the UK’s voluntarist regime. Future reform efforts can draw upon these varied pathways, and US firms need not necessarily shift to two-tier structures to integrate meaningful worker voice.

Where support for worker voice comes from

Support for worker participation extends across the political spectrum. While historically championed by the political Left, recent advocacy has come from centre-right figures and conservative traditions. In the UK, former Conservative Prime Minister Theresa May proposed worker directors, and in Italy, the Meloni government supported laws driven by the Catholic union CISL. Support also stems from the doctrine of subsidiarity and Catholic social thought, which views workers as subjects of economic life with a claim to participate in governance.

Historical support for worker voice in governance

Catholic social thought has long advocated for workers to become sharers in management and profits. The 1931 document Quadragesimo Anno and John Paul II’s Laborem Exercens (1981) explicitly endorse worker participation. Additionally, the Christian Democratic Union’s Ahlen Programme of 1947 in post-war Germany called for co-determination rights in major companies to prevent concentrated, unaccountable economic power and to stabilise liberal democracy.

Investor support

Significant institutional investors support worker voice. Railpen established the Workforce Engagement Coalition to promote workforce directors, arguing that an engaged workforce is necessary for sustainable financial returns. French investors such as Amundi and ERAFP favour participation to align shareholder and employee interests over the long term. In the US, major pension funds have supported shareholder proposals at companies like Amazon seeking to include hourly employees as director candidates.

Workers in governance as a complement to unions

Participation in corporate governance is additive to collective bargaining and freedom of association. It creates a channel for workforce perspectives at a strategic level rather than extending bargaining into the boardroom. Workforce directors should undergo proper training to fulfil their duties and are bound by the same requirements as other directors. PDI argues that expanding these models can help restore trust and address community disenfranchisement.

Conclusions

Worker participation is more common and varied than assumed, but successful implementation depends on supportive regulatory and institutional structures. Systems based on voluntary adoption have produced far less extensive participation than mandatory or exercisable models. The technology sector’s lack of participation poses a challenge to board accountability. Strengthening worker voice remains a practical policy option for jurisdictions seeking to broaden participation, strengthen decision-making, and improve corporate accountability.