The Economic Consequences of One-third Co-determination in German Supervisory Boards

2011 ◽  
Vol 231 (3) ◽  
Author(s):  
Franziska Boneberg
Keyword(s):  
Service Sector ◽  
Supervisory Board ◽  
Limited Liability ◽  
Special Kind ◽  
Economic Consequences ◽  
Strong Impact ◽  
Legal Form ◽  
Employee Representation ◽  
Supervisory Boards ◽  
Board Level

SummaryIn Germany, the establishment of supervisory boards and, therefore, the board-level employee representation are mandatory, depending on the legal form and size of a company. However, the empirical analysis reveals that the bigger part of the companies observed (Limited liability companies with 500 to 2000 employees active in the West-German service sector) does not satisfy the law. This fact has strong impact on research questions in the co-determination field: Many studies have tried to analyze the economic consequences of the German co-determination laws (all examining the 1976 Co-determination Act). However, as the regulations are compulsory, compelling results are difficult to obtain. The bigger part of the studies compares companies that fall into the scope of different co-determination laws. This implies that mainly big companies are contrasted to smaller ones. It is not difficult to see that a comparison of such kind entails further irregularities. The study presented allows better analysis. The data is taken from two sources: the commercial Hoppenstedt Database and official German statistics. Due to the special kind of data it is possible to compare companies of same size, same legal form, active in the same sector that only differ in the existence or non-existence of a supervisory board. Therefore, the study at hand provides more accurate evidence of the economic consequences of the German 2004 Co-determination Act.

scholarly journals German board-level employee representation in multinational companies: Patterns of transnational articulation

2019 ◽  
Vol 25 (3) ◽  
pp. 219-232 ◽  
Author(s):  
Sophie Rosenbohm ◽  
Thomas Haipeter
Keyword(s):  
Decisive Role ◽  
Multinational Companies ◽  
Corporate Structure ◽  
Works Councils ◽  
Employee Representation ◽  
Power Resources ◽  
Strategic Approach ◽  
Supervisory Boards ◽  
National Power ◽  
Board Level

We investigate codetermination on German supervisory boards of multinational companies and pose two questions. First, under what conditions does board-level representation constitute a power resource for employee representatives? Second, how does board-level representation articulate with European Works Councils? We conclude that factors related to corporate structure – head office location, the level at which supervisory boards are established – play a decisive role in determining the power resources available to employee representatives. Articulation with European Works Councils depends on the adoption of a strategic approach whereby German employee representatives deploy the power resources derived from national codetermination rights at the transnational level, or use the mechanisms of transnational employee representation to compensate where such national power resources are lacking.

Does gender diversity in supervisory boards affect gender diversity in management boards in Germany? An empirical analysis

2021 ◽  
pp. 239700222199714
Author(s):  
Dennis Fleischer
Keyword(s):  
Fixed Effects ◽  
Structural Equation ◽  
Gender Diversity ◽  
Supervisory Board ◽  
Board Members ◽  
Governance System ◽  
Management Board ◽  
Supervisory Boards ◽  
Gender Quota ◽  
The Impact

Social aspects like gender diversity in the boardroom are becoming increasingly relevant and are a popular topic of public debate in the context of gender equality in business. However, there is little clarity about the potential spill-over effects of gender diversity. Both theory and empirical results have led to ambiguous conclusions with respect to the effect of gender diversity in the supervisory board on gender diversity in the management board. In addition, it is not clear whether the German gender quota legislation positively affects this relationship. This study analyses whether gender diversity in the supervisory board supports the gender diversity of the management board, and whether this relationship is affected by the gender quota legislation, focusing on the unique case of Germany. To cope with endogeneity concerns, this study employs a cross-lagged panel model with fixed effects using maximum likelihood structural equation modelling. The results of the analysis of the impact of the number of female supervisory board members on the number of female management board members do not support the view of positive spill-over effects of gender diversity in the environment of the German two-tier corporate governance system. Furthermore, this study finds no evidence of an effect of the German gender quota on this relationship. JEL Codes G38, M12, M14, M51

Board-level employee representation in the Visegrád countries

2019 ◽  
Vol 25 (3) ◽  
pp. 261-273 ◽  
Author(s):  
Andrzej Zybała
Keyword(s):  
Economic Policy ◽  
National Level ◽  
The Political ◽  
Political Class ◽  
Employee Representation ◽  
Policy Paradigm ◽  
Labour Participation ◽  
Board Level ◽  
Practical Agenda ◽  
Visegrád Countries

This article addresses the complexity of trade-union approaches to board-level employee representation in the Visegrád countries, and the barriers it faces in particular national settings. Trade unionists in these countries accept the relevance of such employee representation in theory, but their practical agenda covers other issues which they perceive as more important as they struggle to survive at many levels of activity, and face growing existential uncertainty and risk. Unions also lack capacity to overcome obstacles such as reluctance on the part of the political class and managerial hostility to board-level representation; they cannot exert influence on major policy decisions at national level. They are operating in a more and more difficult environment, reflecting not merely a declining membership base, but also the recent economic crisis that failed to change the economic policy paradigm in the Visegrád countries: policies there still rely on a neoliberal approach and hence are not conducive to labour participation. What can still be seen as the predominant model is the traditional one of the market economy in which rights of ownership reign supreme.

scholarly journals SWOT analysis & privatization in Croatia

2006 ◽  
Vol 51 (168) ◽  
pp. 121-136 ◽  
Author(s):  
Ivo Druzic ◽  
Tomislav Gel
Keyword(s):  
Swot Analysis ◽  
Limited Liability ◽  
Transition Process ◽  
Legal Framework ◽  
Economic Consequences ◽  
Macro Level ◽  
Public Enterprises ◽  
Tax Havens ◽  
Holding Companies ◽  
Privatization Process

Legal framework for privatization in Croatia was based on two key laws: the Transformation Act of 1991, and the Privatization Act of 1993, amended in 1996. Early start of privatization process in 1990s in Croatia was marked by the transformation of socially-owned companies into stock holding companies or limited liability companies. The first step (1991-1993) of this process of almost 2700 companies which entered privatization was their evaluation and transformation into private ownership entities. The second step (1994- 1997) consisted of privatization of CPF portfolio. The portfolios change constantly, not only as a result of privatization but also because companies themselves change, as does their position in the market. The third step (1998) in the privatization process was voucher privatization. Privatization of large infrastructure and utility companies designated as public enterprises began in 1999 (Croatian Telecom) and INA in 2002 (public enterprises are privatized on the basis of separate laws). Attempts to discuss privatization in Croatia in terms of SWOT analysis have been motivated by the stark difference among Croatian professional economists in an appraisal of Croatia's performance during the transition process in general and of the privatization process in particular. Therefore we considered the elements of SWOT analysis to be an acceptable way to delve into the confusing world of bickering arguments on the state and perspective of the Croatia's privatization process. In this paper we have tried to provide an impartial approach by employing two criteria i.e. strength and weaknesses in judging the events and results of the privatization process in Croatia. Strength of the overall privatization process can be mostly ascribed to the institutional swiftness on micro as well as on macro level. On the micro level 80% of the companies were formally privatized in the first two years despite unfavorable external conditions comprising the economic consequences of war. On the macro level it took approximately three years to restructure and downsize CPF majority ownership in 2700 companies to majority ownership in just 70 companies. Overall weakness of the restructuring process is concentrated in a painfully slow emergence of sound business activity in market environment. The economic inefficiency of this model is reflected in the substitution of modern entrepreneurial capitalism, which was hoped for with retrograde rent seeking capitalism, typical of early capitalism in its transition from a feudal to an industrial environment two centuries ago. Instead of efficiency and development, it is characterized by the drain of liquid capital through inflated debts, false reserves and falsified claims and the tunneling of constant capital through "soft" loans into tax havens outside the country. Therefore, the solution is not to deal with the consequences, which are evident in various affairs that are treated as individual deviations of the more or less good model of privatization. The problem lies in the model itself.

scholarly journals The Mechanism of Corporate Governance, Financial Performance, and Social Performance in Baitul Maal Wat Tamwil (BMT)

2020 ◽  
Vol 3 (1) ◽  
pp. 1-17
Author(s):  
Hasan Mukhibad ◽  
Akhmad Nurkhin
Keyword(s):  
Financial Performance ◽  
Significant Influence ◽  
Social Performance ◽  
Supervisory Board ◽  
Equation Model ◽  
Education Level ◽  
Structure Equation Model ◽  
Supervisory Boards ◽  
Observation Period

This study aimed to empirically prove the influence of the number and education level of managers, supervisory boards, Sharia Supervisory Board (SSB) and the attendance of Baitul Maal wat Tamwil (BMT) members (owners) in annual member meeting towards on profitability (ROA and ROE), and social performance (zakat performance). The research sample was BMT in Semarang Regency selected by purposive sampling method with an observation period from 2013 to 2017. Data analysis used the Structure Equation Model with the WarpPLS tool. The results showed that the number and education level of managers did not influence financial performance. The education level of the supervisory board had a significant influence on financial and social performance. The number and the education level of SSB changed financial performance, but the education level of SSB did not affect social performance. The Attendance of BMT members at the annual member meeting did not have a significant influence on BMT's financial and social performance improvement. These results indicated the minimal role of members in evaluating BMT performance, both profitability and social performance.

scholarly journals AAOIFI governance standards: Sharia disclosure and financial performance for Islamic banks

2019 ◽  
Vol 8 (1) ◽  
pp. 19-37 ◽  
Author(s):  
Hesham Albarrak ◽  
Sherif El-Halaby
Keyword(s):  
Financial Performance ◽  
Financial Reporting ◽  
Islamic Law ◽  
Supervisory Board ◽  
Positive Influence ◽  
Economic Consequences ◽  
Annual Reports ◽  
Primary Study ◽  
Islamic Banks ◽  
The Impact

The uniqueness of Islamic banks (IBs) is shown through compliance with Islamic law (Sharia) which is approved through Sharia Supervisory Board (SSB) and presented for stakeholders by Sharia Supervisory Board Report (SSBR). This study seeks to achieve three main objectives as follows: (1) it identifies the degree of IBs’ transparency in compliance with Sharia and their commitment with the governance standards that issued by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI); (2) it aims to measure the impact of adoption AAOIFI on the degree of Sharia disclosure; and (3) it seeks to test the economic consequences of Sharia disclosure based on its impact on financial performance. We analyse content of annual reports and websites of 120 IBs across 20 different countries for year 2016. Regression analysis shows compliance level for Sharia disclosure based on our index for SSBR is 53% with higher level compliance for IBs that apply AAOIFI standards comparing with banks that adopting International Financial Reporting Standards (IFRS). Therefore, adopting AAOIFI has a positive effect on enhancing the degree of Sharia disclosure. Moreover, Sharia compliance has a positive influence on financial performance based on both Returns on Assets (ROA) and Tobin’s Q as a robustness test. This study adds value to Islamic accounting literature by being a primary study. There is a lack of research on the topic and this paper measures the consequences of Sharia disclosure over the financial performance of IBs as well as the role of Islamic standards (AAOIFI) in enhancing the image of Islamic banks through supporting their compliance with Sharia.

scholarly journals International Experts’ Influence on Company Internationalization

2021 ◽  
Vol 29 (4) ◽  
Author(s):  
Grygorii Kravchenko
Keyword(s):  
Stock Exchange ◽  
Random Effect ◽  
Supervisory Board ◽  
Generalized Least Squares ◽  
Foreign Ownership ◽  
Company Performance ◽  
Least Squares Regression ◽  
Foreign Markets ◽  
Supervisory Boards ◽  
International Experts

Purpose: The article evaluates the associative relationship between international supervisory board experts and foreign ownership, along with the experts’ influence on the financial and operating performance of firms. The study was based on data collected for 257 companies listed on the Warsaw Stock Exchange in 2010–2015. Methodology: The dataset was built as a panel, and then generalized least squares regression models with a fixed or random effect were employed to test hypotheses. Findings: The findings of the study clearly show that the presence of investigated firms in foreign markets positively affects company performance. Moreover, models with dependent variables ROA and ROS show that supervisory board members with foreign experience positively affect profitability indicators of firms that do not operate on foreign markets. The data analyses reveal that international experts are more effective advisors for companies that conduct no business activities on foreign markets. Furthermore, the results show a positive moderate association between the share of international experts in supervisory boards and the share of foreign ownership in the company. Originality: The article contributes to the understanding of determinants and consequences of the presence of international experts in supervisory boards and company internationalization.

scholarly journals BANKRUPTCY IN SMALL BUSINESS IN CONNECTION WITH THE PANDEMIC

2021 ◽  
pp. 229-239
Author(s):  
Vera Shumilina ◽  
Sergey Nikitin
Keyword(s):  
Small Business ◽  
Consumer Goods ◽  
Service Sector ◽  
Economic Consequences ◽  
Goods And Services ◽  
Social Contributions

The coronavirus pandemic has had serious economic consequences. As a result, the demand for consumer goods and services has fallen sharply, and the service sector is suffering huge losses. Accordingly, revenue also fell, while the mandatory costs remained unchanged: loan payments, rent payments, salaries, taxes and social contributions. The resulting cash gap is likely to lead to massive bankruptcies.

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