Employee representation and board size in the Nordic countries

Steen Thomsen, Caspar Rose and Dorte Kronborg ()
Additional contact information
Steen Thomsen: Center for Corporate Governance
Caspar Rose: Center for Corporate Governance
Dorte Kronborg: Center for Statistics

European Journal of Law and Economics, 2016, vol. 42, issue 3, No 4, 490 pages

Abstract: Abstract Several European countries have mandatory employee representation on company boards, but the consequences for corporate governance are debated. We use employee representation rules in the otherwise quite similar Nordic countries (Denmark, Finland, Norway, and Sweden) to elicit information on shareholder preferences for employee representation and board size. We find that shareholders tend to choose board structures that minimize the proportion of employee representatives. In Denmark and Norway employee representation depends on board size, and shareholders choose board sizes that minimize the number of employee representatives. However, many companies have more employee representatives than is mandatory. In Sweden, where the law mandates a fixed number of employee representatives (two or three depending on firm size), shareholders choose to have larger boards. In Finland, where employee representation is not mandatory,

Keywords: Codetermination; Board structure; Corporate governance; Company law; G30; G38; J54 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (9)

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DOI: 10.1007/s10657-015-9489-9

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