German Law on joint stock companies, in conformity with that of nearly all other countries, has long provided that the organs of the joint stock company (Aktiengesellschaft) consist either exclusively of the shareholders themselves (i.e., the general meeting of shareholders) or are elected by them (i.e., the Aufsichtsrat or supervisory board), or that such an elected organ in turn appoint another organ (i.e., the Vorstand or executive board). Ever since the "old" Labor Management Relations Act (Betriebsverfassungsgesetz) of October 11, 1952, however, only two-thirds of the membership of the supervisory boards of the larger joint stock companies are elected by the general meeting of stockholders and one-third by the company's work force. Special legal dispositions were enacted for enterprises in the coal, iron, and steel industry by the act of May 21, 1951.
The essential element of so-called economic codetermination on the basis of parity (or simply "parity codetermination"), as found in the Codetermination Bill of 1974, is to change the existing law as follows: in the future, half the membership of the supervisory board of any joint stock company with a work force of more than 2000 is to be elected by the shareholders, and half by the company work force. Those board members not elected by the shareholders may include persons who are not working for the company but who are trade union functionaries. In case of tie votes within the board thus constituted, various procedural solutions are envisioned according to the Bill.
Under the proposed law members of the supervisory board not elected by the shareholders would have equal voting rights on all matters for which the board is competent, and not only for matters pertaining to the working conditions of the company's work force. In questions of special concern to the work force, the organs of the company are already required by existing laws, especially the "new" Labor Management Relations Act of January 15, 1972, to consult the works council--the elected representatives of the company's work force--or to obtain its approval before taking certain measures.
Parity Codetermination in West German Companies and International Law,
9 Vanderbilt Law Review
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