Democracy in the workplace: Spain leads the way, Europe dithers

On 6 February, a committee of international experts submitted a report on corporate democracy to the Spanish government. Commissioned a year earlier by the Minister of Labour and the Social Economy, Yolanda Díaz, the report sets forth ambitious proposals to give workers a say in companies’ strategic decisions and access to ownership, by means of a corporate democracy index and a bonus-malus system. 

Could this issue gain traction elsewhere in Europe? This is not the first time it has been debated. Without going as far as the Spanish committee’s proposal, codetermination – meaning employee participation in corporate governance through representatives on the board of directors or supervisory board – often comes to the forefront during times of crisis.

It has been seen as a solution for problems such as the chronic distrust plaguing representative democracy; the effects of the 2008 financial crisis; and the insufficient recognition given to essential workers during Covid-19. Worker participation is seen as a means of curbing the headlong rush of an increasingly authoritarian capitalist system. 

The leading example of corporate democracy is the German model, established after the Second World War. In Germany, large companies (with more than 2,000 employees) are required to set aside 50% of the seats on their supervisory board. This body must approve all strategic decisions, such as those involving restructuring. It therefore holds significant powers, even though the final say rests with the shareholders. Their representatives elect the chair of the board, who has the power to break a tie in the event of a split vote. 

Germany is not the only European country to have adopted codetermination. However, a 2009 study by the European Trade Union Institute (ETUI) found that, of 4,600 employee representatives in management bodies, 88% were in one of only five countries: Germany, Norway, Sweden, Denmark, and Austria. 

“In recent years, there has been no overwhelming enthusiasm for this idea”, says Dominique Méda, a French philosopher and sociologist. This labour specialist is also president of the Veblen Institute, a think tank that focuses on the green transition and a socially just economy. 

So how might we take the concept further? A recent report by the ETUI, “Revisiting worker representation on boards: The forgotten EU countries in codetermination studies” (2025), provides some answers by examining countries on the margins of codetermination. Led by researcher Sara Lafuente Hernández, the study looks at four groups of countries: those without laws on codetermination but where the debate is ongoing (Belgium, Italy); those where codetermination enjoys limited institutional recognition but remains inconsistent (Greece, Portugal, Spain); those where codetermination has recently been introduced or expanded (Czechia, Finland, Lithuania); and finally, countries where there is experience with codetermination in the public sector but where it is weakened by neoliberalism and privatisation (Ireland, Poland). What conclusions can be drawn? 

“Co-management is widespread in Europe”, stresses Sara Lafuente Hernández. The reason it is not more generally championed is that a number of countries, such as Ireland and the United Kingdom, prioritise entrepreneurial freedom. This implies a defence of shareholder freedom, since the company is considered to be the property of the shareholders. 

“In countries where there are no laws or enforcement mechanisms, unions use other tools to make their voices heard and to defend workers’ interests, whether collective bargaining (at the company or industry level) or collective action (strikes, general assemblies, etc)“, says Sara Lafuente Hernández. ”They may also have other priorities, such as wages or improving working conditions, rather than direct intervention in corporate governance.” That is the case in Belgium and Greece.

In other countries, such as Italy, a preference for mass-movement-based unionism may explain reluctance to take up the issue. France is in a comparable situation, says Dominique Méda: “It is clear that some unions have not previously wished to get involved in what could be described as co-management and instead wanted to leave employers in charge of organising work.”

Codetermination is clearly not a revolutionary project, argues Sara Lafuente Hernández. It is “a reformist response to the problem of workers’ lack of a voice in a capitalist economy”. In 1950s Germany, codetermination emerged as a means of pacifying revolutionary trade unionism. But this does not mean that workers have nothing to gain from it – quite the contrary. “In global financial capitalism, being able to discuss matters with the CEO and shareholder representatives in a setting where we receive the same information as they do, prior to a decision-making process regarding the company, can prove very useful for union action.”

In recent years, however, there has been growing interest in the subject from researchers, and “a number of companies might not be as opposed to it as one might think”, says Dominique Méda, citing France's Work & Democracy Workshops led by Thomas Coutrot and Alexis Cukier; the work of Olivier Favereau, who wrote a “Treatise on Codetermination” (PUL, 2025); the DODES Agora (a specialist think tank); and Christophe Clerc, who proposes to make codetermination a European issue. But, points out Dominique Méda, “it is clear that Medef [France's employers' organisation] is radically opposed, as is the Spanish employers’ organization”.

In general, representation on boards of directors or supervisory boards is “the icing on the cake of a well-established system of social dialogue and employee representation within companies,” says Sara Lafuente Hernández. The countries where this works are those where unions have acted as mediators and where there is a belief in the importance of worker participation for effectively managing the economy and business.

Finally, while co-management allows for better consideration of job security, structural challenges, and the company’s long-term development, it does not fix everything. In Germany, the example of Volkswagen showed that despite codetermination, employees did not prevent the circumvention of emissions regulations (see “Dieselgate”). Codetermination led them to give management a blank cheque in exchange for benefits granted to workers.

“It’s the exception that proves the rule”, argues Sara Lafuente Hernández. She nevertheless believes that corporate isolation and protectionism can be prevented through transparent nomination and accountability procedures, as well as better coordination of employee representation beyond the company itself. “But it’s always a challenge in transnational companies that are increasingly fragmented into long subcontracting chains.”

The European Commission recently unveiled a proposal for a “28th legal regime”. This simplification of company law amounts to a race to the bottom in order to achieve common rules across the 27 EU member states. As of today, it provides no safeguards for labour law. Indeed, the situation in Europe does not look promising for corporate democracy. In countries like Spain, where the government has committed to promoting a constitutional provision on corporate worker participation, things may be moving in the right direction.

But, stresses Sara Lafuente Hernández, for that to be true there must be “legal obligations applying to a large proportion of companies, and a genuine political will to prevent the measures from being stripped of their substance or watered down due to technical details” – the unfortunate scenario that has played out in France, Italy, and Lithuania. The time is ripe to make this topic a Europe-wide priority and, given the upcoming presidential election in France in 2027, a major campaign issue. To be continued.