The topic of this year’s Böckler conference for supervisory boards is the role of codetermination in finance capitalism. Today, so-called ‘activist’ investors increasingly have the whip hand when executive boards and supervisory boards with codetermination try to get companies to be strategically successful, sustainable and socially-oriented for the digital age. In an interview given in the run-up to the conference, IMU director Norbert Kluge calls for the tried-and-tested instrument of codetermination to be strengthened, also at the European level, to safeguard balance between the social partners.
Question: The topic of this year’s Böckler conference for supervisory boards is codetermination in the age of finance capitalism. Do supervisory boards regard themselves as being in an entirely new situation? Finance capitalism has been around for a long time.
Kluge: Institutional investors and asset managers have been incessantly changing the rules of the game when it comes to company finances and investments. Making money out of money is a business model that has almost nothing to do with a sustainable future for companies, jobs, incomes and production sites.
What are the risks for companies and their employees under these circumstances?
Employees are at risk of being downgraded to mere inventory items when their company is restructured, dismembered into its individual parts and then passed from hand to hand in the market, before finally being shut down. The balance of interests between labour and capital in favour of the latter in this value chain can no longer be sustained. It is tilting ever more towards the rich and to the detriment of labour.
How can codetermination actors assert themselves in this situation?
The right to codetermination in the supervisory board establishes something of a level playing field when it comes to decision-making on fundamental company planning. Cooperation between trade union members, strong works councils and conscientious labour directors on the executive board can secure sufficient room for manoeuvre and leverage to realise alternatives instead of giving free rein to greed. But that does not fundamentally alter the balance of power in the company. All too often codetermination is reduced to the role of last barricade against the complete selling out of the workers.
One of the guests at the conference will be finance minister Olaf Scholz. Do we need the legislature to establish a different framework to strengthen our codetermination system?
Particularly in the age of digitalisation and globalisation there has to be a democratic effort to achieve compromise and bring about social solutions that are acceptable to all. Over decades now, codetermination has proven itself to be a tried and trusted approach. Policymakers need to recognise this benefit for democracy, the social state and the economy, defend it and expand it. The next German EU Council presidency will be in the second half of 2020. We call on the German government to acknowledge codetermination as the democratic design principle of the social market economy and to step up its efforts both domestically and in Europe to improve its legal basis. Otherwise the benefits of codetermination will go to waste.